Shares of Lincoln National Corporation (LNC) increased by 2% following the release of its third-quarter 2025 results on October 30. The company’s quarterly earnings were bolstered by strong annuity deposits and robust performances from its Group Protection and Life Insurance sectors. Factors such as increased net investment income, consistent mortality results, and a reduction in total expenses also contributed positively to the financial outcome. However, these gains were partially offset by a decrease in insurance premiums related to Annuities.
Lincoln National reported adjusted earnings per share (EPS) of $2.04, exceeding the Zacks Consensus Estimate by 10.9%. Year-over-year, the bottom line saw a slight decline of 1%. Adjusted operating revenues grew by 3.8% from the previous year, totaling $4.8 billion, although it fell short of consensus expectations by 0.5%.
Key highlights from LNC’s Q3 results include an estimated Risk-Based Capital (RBC) ratio exceeding 420% by the end of the third quarter. Insurance premiums experienced a modest increase of 1.4% year over year, reaching $1.6 billion, but this figure was 2.1% below the Zacks Consensus Estimate. Additionally, fee income rose by 2.4% to $1.4 billion, though it also missed the expected mark by 2.2%. Notably, net investment income grew by 9% to $1.5 billion, surpassing forecasts by 6.2%. Other revenues soared 28.8% to $206 million.
A significant reduction in total expenses, down by 16.3% to $4 billion, further underscored the firm’s efficient cost management. Furthermore, the firm recorded a net income of $445 million, reversing a loss of $528 million from the prior year.
Segment performances revealed that the Annuities and Life Insurance divisions fall under LNC’s Retail Solutions business, while the Group Protection and Retirement Plan Services are part of the Workplace Solutions segment. The Annuities segment reported an operating income of $310 million, reflecting a 3% year-over-year increase that exceeded the consensus estimate, bolstered by improved spread income and a favorable equity environment. Operating revenues for this unit grew by 6.3% to $1.3 billion despite a 34.2% drop in insurance premiums. Total annuity deposits rose significantly by 32.1% to $4.5 billion.
The Life Insurance segment delivered an operating income of $25 million, benefiting from enhanced mortality results and cost reductions, with sales witnessing a notable 144.3% increase year-over-year to $298 million. Similarly, the Group Protection segment saw its operating income skyrocket by 36.7% to $149 million, fueled by favorable life experience and increased insurance premiums.
In the Retirement Plan Services segment, operating income rose by 5% to $46 million, backed by favorable market conditions. Total deposits within this unit advanced by 19.8% year over year to $5 billion.
From a financial stability perspective, Lincoln National concluded the third quarter with $10.7 billion in cash and invested cash, an increase from the previous year. Total assets climbed to $415.3 billion, and total stockholders’ equity rose to $10.5 billion.
For the future, management projects operating income contributions in 2026 from Annuities, Life Insurance, Group Protection, and Retirement Plan Services to be well-balanced, laying a foundation for continued growth and stability. They aim to maintain an RBC ratio above 420% over the long term.
Lincoln National currently holds a Zacks Rank of #2 (Buy), reflecting positive sentiment for the company’s potential. Other top contenders in the finance sector include T. Rowe Price Group, Federated Hermes, and Affiliated Managers Group, all of which are currently ranked highly by Zacks as well.
Overall, Lincoln National’s financial results demonstrate resilience within its diverse portfolio, setting a hopeful tone for future growth as it capitalizes on its strengths.