Lincoln Financial Reports Dramatic Growth in Annuity Sales and Income
Lincoln Financial's fourth-quarter performance in the annuity segment surged with $4.9 billion in sales, marking a robust 33% increase compared to last year. This growth propelled a record-ending account balance of $175 billion and generated a significant $311 million in segment operating income. The spike in annuity sales was majorly driven by spread-based products, which comprised nearly two-thirds of the total sales, demonstrating strategic alignment with the company's financial goals.
Despite net outflows of $1.2 billion, an improvement from the $1.9 billion in the previous year, annuity sales for the year summed up to $17.163 billion, a 25% leap from 2024. The annual annuity operating income saw a slight rise to $1.198 billion. Such robust performance underscores the strategic importance of managing regulatory compliance and capitalizing on market opportunities, which are vital in an industry where regulatory and underwriting dynamics constantly evolve.
Financial Metrics and Market Dynamics
For common stockholders, the adjusted operating income for the fourth quarter increased to $434 million or $2.21 per diluted share. However, net income available to common stockholders dropped to $745 million due to non-economic impacts tied to market risk benefits. On an annual scale, net income dwindled to $1.086 billion from $3.187 billion, while adjusted operating income increased to $1.537 billion.
The pre-tax net unrealized loss on available-for-sale securities was $7.9 billion as of December 31, 2025. This figure represents an improvement from $10.3 billion a year earlier, reflecting market conditions and asset valuations. These financial metrics highlight the significance of effective risk management and regulatory compliance in navigating market fluctuations.
Strategic Partnerships and Business Division Growth
In 2025, Bain Capital's acquisition of a 9.9% equity stake in Lincoln Financial for $825 million reflects strategic alliances aimed at diversifying private asset investments. Furthermore, the collaboration with Partners Group to introduce the Lincoln Partners Group Royalty Fund offers individual investors a gateway to diverse private market strategies.
Lincoln’s life insurance division turned around with a fourth-quarter operating income of $77 million, a notable recovery from the previous year's loss. Sales rose by 19% to $142 million, and average account balances saw a 9.8% increase. Ellen Cooper, Lincoln’s CEO, emphasized strong execution across business segments, supported by effective capital management strategies.
Performance Across Other Segments
The group protection segment reported $109 million in operating income, with insurance premiums rising by 8%. However, a 16% decline in sales followed the prior year's record high. The retirement plan services segment reflected a healthy 7% increase in operating income and robust deposits growth, underscoring the importance of strategic risk management and regulatory compliance in fostering sustainable growth.
By the end of 2025, Lincoln Financial maintained strong liquidity with $655 million available, highlighting its solid financial resilience and efficient risk-based capital management with a ratio exceeding 420%. Such financial robustness positions Lincoln Financial to capitalize on future market opportunities while ensuring compliance with regulatory demands.