Lincoln National Corporation Reports Strong Q4 2025 Earnings
Lincoln National Corporation (LNC) reported impressive performance in the final quarter of 2025, with adjusted earnings per share reaching $2.21. This figure not only surpassed analyst expectations by 18.7% but also marked a 15.7% increase from the previous year's fourth quarter. Such results highlight the company's strategic positioning in the insurance industry and its effective risk management practices.
The company's adjusted operating revenues grew 5.7% year-over-year to $4.9 billion, exceeding projections by 1%. This accomplishment was driven by heightened insurance premiums, increased annuity deposits, and robust performance in the life insurance sector. Greater net investment income and improved mortality outcomes also contributed significantly, though were partly offset by reduced group protection sales and increased expenses related to regulatory compliance requirements.
Regulatory Capital and Revenue Breakdown
In terms of regulatory capital, LNC's risk-based capital (RBC) ratio improved, exceeding 420% by the quarter's end. Insurance premiums rose 5.4% year-on-year to $1.7 billion, surpassing expectations. Although fee income grew by 1.4% to $1.4 billion, it still fell short of projections. Net investment income rose impressively by 11%, reaching $1.6 billion.
Total expenditures increased by 35.2% year-over-year to $4 billion, influenced largely by a 10.8% rise in credited interest, totaling $984 million. Lincoln National's net income reported as $754 million, reflecting a decrease from $1.7 billion the previous year.
Segment Performance
Annuities: Operating income reached $311 million, showing a 2.6% year-over-year increase and surpassing expectations. Despite a 7% rise in operating revenues driven by investment income, insurance premiums slightly declined. Annuity deposits surged by 32.4% year-over-year.
Life Insurance: This unit shifted from a $15 million loss the previous year to a $77 million operating income. Improved mortality results and higher alternative investment income were major factors, with operating revenues increasing by 2.2%. Sales rose by 19.3% year-over-year.
Group Protection: The division's operating income saw a slight increase to $109 million, supported by positive long-term disability outcomes. Operating revenues rose 8.3%, despite a decline in sales.
Retirement Plan Services: Reported a 7% growth in operating income to $46 million, surpassing expectations due to favorable spread expansions and equity markets.
Financial Standing as of December 31, 2025
Lincoln National reported $9.5 billion in cash and invested cash, an increase from $5.8 billion at the end of 2024. Total assets rose to $417.2 billion from $390.8 billion, while long-term debt stood at $5.9 billion. Stockholder equity increased to $10.9 billion. The book value per share, excluding other comprehensive income, improved to $73.10.
The company distributed $85 million in dividends during the quarter, reinforcing its commitment to shareholder returns.
Year-End Summary and 2026 Outlook
For the year, Lincoln National's adjusted earnings per share rose by 16.4% to $8.23, alongside a 4.1% increase in adjusted operating revenues, totaling $19.1 billion. Looking forward to 2026, Lincoln National anticipates that the contribution to total operating income from Annuities, Life Insurance, Group Protection, and Retirement Plan Services will be 58-60%, 8-9%, 24-25%, and 8-9%, respectively. The aim is to maintain an RBC ratio above 420%, ensuring robust regulatory compliance.
Industry Comparison
Comparatively, industry peers like RenaissanceRe Holdings, MetLife, and Everest Group have published their results for the same quarter. While some surpassed expectations, others, such as Everest Group, fell slightly short, emphasizing the dynamic nature of payer and provider interactions and the challenges in regulatory compliance.
This financial overview offers a comprehensive perspective on Lincoln National's recent performance and strategic priorities for industry stakeholders.