stockrowWhat it does
Lincoln National Corporation is a holding company that sells insurance and retirement products through subsidiaries under the Lincoln Financial name. It lists Fort Wayne as its headquarters and has principal executive offices in Radnor, Pennsylvania. Ellen G. Cooper is its president and chief executive officer.
Lincoln operates through four segments. Annuities sells contracts that can help individuals accumulate money for retirement and receive income, including for life. Life Insurance sells term and permanent coverage, as well as policies that combine life insurance with benefits for long-term care. Some policies also provide benefits for critical illness.
Group Protection serves employers with benefits such as disability and life insurance, dental and vision coverage, and leave administration. Employers can pay for the coverage, offer it to employees to purchase, or use Lincoln to administer certain self-funded plans. Retirement Plan Services provides investment products and services such as recordkeeping, compliance testing and participant education to employers sponsoring retirement plans.
Lincoln generally reaches individual customers through financial intermediaries rather than selling directly to them. Its group benefits are primarily distributed through employee-benefit brokers, administrators and other benefit firms. The company also serves banks and corporations with life insurance products covering employees.
How it makes money
Lincoln reported adjusted operating income available to common stockholders in the latest quarter.
Lincoln earns insurance premiums, investment income, account-based charges and service fees. Its costs include claims, interest credited to policyholders, reserves for future obligations, commissions and operating expenses. Different products generate revenue in different ways, and profitability depends on both the revenue collected and the obligations Lincoln ultimately pays.
In Life Insurance, sources of revenue include premiums, insurance assessments, expense and fee charges, and investment income. Lincoln pays death and long-term care claims, credits interest on certain policies and sets aside reserves for future claims. Results depend on factors including sales, mortality experience, policy retention and investment income.
For variable annuities, Lincoln charges assessments on customer account balances to cover insurance and administrative expenses. Some contracts also carry surrender charges when customers withdraw money early. For fixed annuities, Lincoln expects to earn a spread: the difference between returns on investments supporting the contracts and interest credited to customers. Investment risk on those fixed contracts rests with Lincoln.
Group Protection earns premiums on insured benefits and provides administration for some employer self-funded plans. Retirement Plan Services earns recordkeeping, administrative, asset-based and other service fees. It also expects to earn an investment spread on certain fixed accounts.
In the latest fiscal year, Group Protection revenue was $6.1 billion, Life Insurance revenue was $5.9 billion and Annuities revenue was $4.9 billion. Retirement Plan Services revenue was $1.3 billion. Lincoln continues to earn charges on existing policies and account balances, while the level of some fees changes with account values.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Group Protection | $6.1 billion | 33.5% | 6.79% |
| Life Insurance | $5.9 billion | 32.4% | −6.19% |
| Annuities | $4.9 billion | 26.7% | 3.34% |
| Retirement Plan Services | $1.3 billion | 7.32% | 4.15% |
Customers and how it sells
Lincoln serves individuals buying life insurance and annuities, employers providing workplace benefits, and employees participating in those benefit and retirement plans. The company also sells life insurance covering employees to banks and corporations. It serves employer groups ranging from small companies to large employers, and its retirement-plan clients include healthcare providers, educational institutions, corporations and public-sector employers.
Lincoln has more than 17,000,000 customers. Individual life and annuity products are distributed through Lincoln Financial Distributors and financial intermediaries, including financial advisers, planners, agents and financial institutions. Group Protection primarily uses employee-benefit brokers, third-party administrators and other employee-benefit firms.
Lincoln’s principal executive offices are in Radnor, Pennsylvania. Its U.S. insurance subsidiaries are regulated by state insurance departments, with principal insurance regulators in Indiana and New York. It also has reinsurance subsidiaries based in Bermuda and Barbados.
Retirement Plan Services focuses on employer-sponsored defined contribution plans, while also serving defined benefit plans and individual retirement accounts on a limited basis. Its offerings include investment vehicles and services for plan sponsors and participants.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Group Protection | $6.1 billion | 33.5% | 6.79% |
| Life Insurance | $5.9 billion | 32.4% | −6.19% |
| Annuities | $4.9 billion | 26.7% | 3.34% |
| Retirement Plan Services | $1.3 billion | 7.32% | 4.15% |
Suppliers and costs
Lincoln’s principal costs include insurance claims and benefits, interest credited to customers, reserves for future claims, commissions and general operating expenses. The timing and amount of claims, policy surrenders and withdrawals affect its cash needs. Its distribution model also relies on intermediaries, while some services are performed by outside administrators.
Most life insurance claims are handled in-house, but long-term care claims are handled primarily by a third-party administrator. Group Protection also administers certain plans funded by employers rather than insured by Lincoln. Lincoln uses investments to support obligations under products such as fixed annuities and universal life insurance.
General and administrative expenses, net of amounts capitalized, increased year over year in the latest quarter. The increase reflected investment in the Group Protection claims platform, costs of retaining and servicing more fixed annuity business, and investment in retirement plan operations.
Lincoln has agreed to reinsure a legacy block of guaranteed universal life business with a subsidiary of Talcott Financial Group, subject to regulatory approval. Lincoln will retain administration, recordkeeping and claims management for those policies.
- Revenue$18.2B
- Cost of revenue−$16.6B
- Operating income$1.6B
Competitive position
Lincoln competes with other financial services and insurance companies across annuities, life insurance, workplace benefits and retirement services. The annuities and life insurance markets each contain many companies, with no single company dominating every product. No specific competitors are named.
Annuity providers compete on access to distribution, wholesaler quality, investment performance, cost, product features, brand recognition, financial strength ratings and service. In life insurance, factors include price, product features, underwriting, the speed and process of issuing policies, customer experience and financial strength.
Lincoln distributes individual life insurance and annuities through financial intermediaries. It also uses automated underwriting within defined criteria and a streamlined life insurance issue process. In workplace benefits, the company tailors distribution, underwriting, technology and service to local, regional and national customer segments.
Our reading: Lincoln’s distribution relationships are a meaningful competitive asset because they give its products access to multiple intermediary channels, but access and wholesaler quality are also contested across the annuity market. Our reading: Its range of annuity and life products helps it address different customer needs, although competing insurers also differentiate on features, price and service. Our reading: Automated underwriting and service technology may support its position, but the evidence does not establish that these capabilities are exclusive to Lincoln.
Growth opportunities
Lincoln is shifting its annuity business toward products that earn investment spreads. In the latest quarter, spread-based products represented a majority of annuity sales. Registered index-linked annuity sales and sales of variable annuities without living-benefit guarantees rose year over year.
Lincoln expects fixed annuity account values to rise this year as it retains fixed annuity flows. It also expects to increase fixed annuity sales over the remainder of the year. The company has invested in its platform and says its partnership with Bain Capital broadens its capabilities in that market.
In Life Insurance, Lincoln is shifting new business toward accumulation and limited-guarantee products. In the latest quarter, core life sales rose year over year, led by MoneyGuard and variable universal life products with limited guarantees.
Group Protection is emphasizing local markets and supplemental health products. Supplemental health premium rose year over year in the latest quarter. The company is also investing in its claims platform, automation and digital tools.
In Retirement Plan Services, Lincoln is realigning the business around returns and pricing. Net flows remained negative in the latest quarter, primarily because of the planned transition of large cases that did not meet its profitability objectives. Lincoln expects its work to improve the business’s economic profile over time.
- $17.7BFY2021
- $18.8BFY2022
- $11.6BFY2023
- $18.4BFY2024
- $18.2BFY2025
Structural risks
- Interest rates and investment spreads. Falling or sustained low rates can reduce the difference between investment returns and amounts credited to customers. Rising rates can reduce investment values and encourage customers to surrender contracts, potentially requiring asset sales at a loss.
- Markets and guarantees. Lower equity markets can reduce asset-based fees and increase liabilities for guaranteed benefits. Lincoln uses hedging and reinsurance to mitigate some exposure, but those strategies may not fully offset changes in guarantee values.
- Claims and assumptions. Profitability depends on mortality, disability and other claims experience, as well as customer behavior. Actual experience that differs from the assumptions used to price products and establish reserves may reduce earnings.
- Regulation and capital. Insurance regulators set standards for reserves, solvency and capital and restrict certain subsidiary dividends. Changes in rules can increase costs or required capital, while limits on subsidiary payments can affect holding-company liquidity.
- Technology and privacy. Lincoln and its service providers process personal information. System interruptions, security breaches or failures to protect data could disrupt operations, increase expenses or lead to legal and regulatory consequences.
- Reinsurance counterparties. Lincoln relies on reinsurance to mitigate some product risks. The adequacy and collectability of reinsurance are uncertainties for the business.
Bottom line
Our reading
Our reading: Lincoln combines recurring insurance and service charges with investment-spread income, while carrying long-term obligations whose cost depends on claims, markets and customer behavior. Its distribution reach and product range support access to several markets, but competition is widespread. The shift toward spread-based annuities and the planned legacy-life reinsurance transaction change the business mix without removing its exposure to investment, guarantee and counterparty risks.