Lincoln National Corporation Reports Strong Financial Growth and Future Outlook
Lincoln National Corporation recently concluded a robust financial year, showcasing consistent growth across its diverse business segments. Strategic realignment and effective cost management were key contributors to this success, according to company executives.
Strong Financial Results
During the fourth-quarter earnings call, CEO Ellen Cooper highlighted a 31% rise in adjusted operating income compared to the same quarter last year. This marks the highest level in four years for annual adjusted operating income. Chief Financial Officer Chris Neczypor noted this quarter as Lincoln's sixth consecutive period of year-over-year growth, with the year 2025 solidifying its third straight year of improved performance.
The latest quarter revealed an adjusted operating income of $434 million, or $2.21 per diluted share, for common stockholders. Net income reached $745 million, or $3.80 per diluted share. The discrepancy between GAAP net income and adjusted operating income stemmed from favorable market risk benefits alongside a positive interest rate and equity market environment.
Sector-Specific Performance
Throughout the year, Lincoln's adjusted income from operations for common shareholders exceeded $1.5 billion, a notable 23% increase from 2024. This growth was due to strong underwriting results in both Life and Group Protection segments, coupled with expanding spreads and buoyant equity markets.
The Group Protection segment reported a slight increase in operating income to $109 million, with improvements in the disability loss ratio. Despite an increase in the group life loss ratio, the outlook remains positive. The segment posted full-year operating earnings of $493 million, a 16% improvement year-over-year.
Meanwhile, the Annuities segment recorded quarterly operating income of $311 million, adjusted slightly for mortality-related experiences to $303 million. This segment benefitted from increased spread income and account balances despite facing variable annuity outflows and heightened expenses.
Strategic Initiatives and Outlook
CEO Cooper announced a 25% increase in annuity sales volume for 2025, driven by spread-based return products. Future efforts will focus on aligning profitability with capital efficiency and reducing market sensitivity by decreasing variable annuity volumes. Lincoln anticipates further growth in fixed annuity account values, following the restructuring of an external reinsurance agreement.
The company will adjust its financial reporting by shifting net interest income from annuities to non-operating income, emphasizing that this change will not impact operational economics or cash flow.
Lincoln National, renowned for providing comprehensive financial solutions in retirement, insurance, and wealth management, continues to affirm its industry stronghold from its Radnor, Pennsylvania headquarters.