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Mar 31, 2023
Lincoln National Q1 2023 Earnings Report
Lincoln National reported a net loss due to unfavorable impacts from market risk benefits and hedge instrument fair value changes, while adjusted operating income remained relatively stable.
Key Takeaways
Lincoln National Group reported a net loss for Q1 2023, driven by unfavorable impacts from market risk benefits and hedge instrument fair value changes. However, the company is taking actions to rebuild capital and increase free cash flow, including a $28 billion block reinsurance transaction. Adjusted operating income remained relatively stable, and the company is focused on shifting to a more capital-efficient product mix.
Net loss available to common stockholders was $(5.37) per diluted share, impacted by market risk benefits.
Adjusted operating income available to common stockholders was $1.52 per diluted share.
Annuities deposits increased by 17% year-over-year, reaching $3.2 billion.
Group Protection operating margin was 5.6%, with a loss ratio of 75%.
Lincoln National
Lincoln National
Lincoln National Revenue by Segment
Revenue by Segment
Annuities Revenue
CapyFin.comLife Insurance Revenue
CapyFin.comGroup Protection Revenue
CapyFin.comRetirement Plan Services Revenue
CapyFin.com Forward Guidance
Lincoln Financial anticipates earnings headwinds in 2023 but expects the earnings power of the business to re-emerge more materially in 2024 and beyond as they continue to execute their strategic objectives.
Positive Outlook
- The company is taking swift action to rebuild capital.
- The company is increasing its pace of capital generation.
- Lincoln Financial is delivering profitable new-business growth.
- The company is shifting to a more capital-efficient product mix in 2023.
- The $28 billion block reinsurance transaction with Fortitude Re is expected to further advance enterprise strategic objectives and bolster the balance sheet.
Challenges Ahead
- The company is experiencing earnings headwinds in 2023.
- Net loss available to common stockholders of $(5.37) per diluted share includes unfavorable impacts from the new accounting for market risk benefits (“MRBs”).
- Life Insurance reported a loss from operations of $(13) million compared to income of $23 million in the prior-year quarter.
- Retirement Plan Services reported income from operations of $43 million, down 26% compared to the prior-year quarter.
- Other Operations reported a loss from operations of $87 million versus a loss of $78 million in the prior-year quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income