Lincoln National Corporation
Lincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates through four segments: Life Insurance, Annuities, Group Protection, and Retirement Plan Services. The Life Insurance segment provides life insurance products, including term insurance, universal life insurance (UL), indexed universal life insurance, variable universal life insurance (VUL), linked-benefit UL and VUL products, and critical illness and long-term care riders. Its Annuities segment offers variable, fixed, and registered index-linked annuities. The Group Protection segment offers group nonmedical insurance products consisting of short and long-term disability and administration services, statutory disability; paid family medical leave administration and absence management services; term life; life; supplemental health insurance; accident, critical illness, and hospital indemnity benefits and dental and vision products to the employer marketplace through various forms of employee-paid and employer-paid plans. Its Retirement Plan Services segment provides employers with retirement plan products and services primarily in the defined contribution retirement plan marketplace; individual and group variable annuities, group fixed annuities, and mutual fund-based programs; and various plan services, including plan recordkeeping, compliance testing, participant education, and trust and custodial services. It distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, financial institutions, and other intermediaries. Lincoln National Corporation was founded in 1905 and is headquartered in Radnor, Pennsylvania.
What does it do?
Lincoln National Corporation sells life insurance and retirement products to everyday Americans. Think of them as the company you call when you want a life insurance policy that pays out to your family if you die, or an annuity — basically a product where you hand over a lump sum and they promise to pay you monthly income for life. They also help companies run their employee retirement plans, similar to how your employer might offer a 401(k). With $19 billion in annual revenue, they're one of the larger players in the U.S. life insurance space.
As tens of millions of Baby Boomers retire, demand for annuities and retirement income products is surging — and Lincoln National sits right in the middle of that wave. Interest rates matter enormously here: when rates are higher, insurers can earn more on the money they hold, which makes their products more profitable and easier to price. After a rough period of losses in 2022, the company has been working hard to stabilize, making its recovery story one investors are watching closely.
How does it make money?
Lincoln National makes money in four main ways. First, it collects premiums — regular payments — from life insurance policyholders across term, universal, and variable life products. Second, it sells annuities, earning fees and investment spreads on the large pools of customer money it manages. Third, its Group Protection segment sells disability and life coverage to employers as a workplace benefit. Fourth, its Retirement Plan Services division manages 401(k)-style plans for companies, charging fees on the assets it oversees. Revenue grew from $18.3 billion to $19.1 billion year-over-year, and the company returned to $1.1 billion in net profit after significant losses in prior years.
Why do investors care?
The bull case for Lincoln National centers on its turnaround: after posting a massive loss in 2022 partly due to costly pandemic-era life insurance claims and reserve charges — meaning they had to set aside more cash to cover future payouts — the company has been cutting risk and improving profitability. The aging U.S. population creates a long runway for annuity and retirement product demand. If interest rates stay elevated, Lincoln earns more on its investment portfolio, which directly boosts margins. The stock trades at a low valuation relative to earnings, so if the turnaround holds, there could be meaningful upside.
Deep Dive
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