Lincoln(US:LNC)2025-10-30 13:00Financial Data and Key Metrics Changes - The company reported third quarter adjusted operating income available to common stockholders of $397 million, or $2.04 per share, marking a year-over-year growth for the fifth consecutive quarter [22][21] - Net income available to common stockholders was $411 million, or $2.12 per diluted share, with a notable difference from adjusted operating income primarily due to changes in fair value and non-operating income [22][23] - The annualized return on alternative investments was just under 10%, amounting to $101 million after tax, slightly below the target [22] Business Line Data and Key Metrics Changes - Annuities business reported sales of $4.5 billion, marking the fourth consecutive quarter of increased sales, with spread-based products representing 63% of the new business total [9][10] - Life insurance earnings reached $54 million, significantly improving year-over-year, with sales totaling nearly $300 million, driven largely by executive benefits [13][14] - Group protection delivered earnings consistent with the prior year, with a 5% year-over-year premium growth and nearly 40% sales growth across market segments [16][17] - Retirement Plan Services achieved operating income of $46 million, up from $44 million in the prior year, with total deposits increasing by 20% year-over-year [31][18] Market Data and Key Metrics Changes - The annuities business saw a 36% year-over-year increase in fixed annuity sales, while registered index-linked annuities (RILA) sales increased by 21% [10][11] - Group protection's premium growth was broad-based, with supplemental health increasing by 33% year-over-year [17] - Retirement Plan Services reported a 5% year-over-year increase in account balances, reaching $123 billion, with net inflows totaling $755 million [33][31] Company Strategy and Development Direction - The company is focused on increasing risk-adjusted returns, reducing result volatility, and growing its franchise, with a clear strategy for profitable growth [5][6] - The annual Assumption Review indicated a small favorable impact on adjusted operating income, reflecting alignment between underlying experience and future expectations [8][25] - The company is transitioning to retaining all fixed annuity business, which is expected to enhance spread-based earnings over time [39][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory and the effectiveness of its strategic initiatives, emphasizing the importance of disciplined execution [20][21] - The company anticipates some variability in results but remains optimistic about long-term growth potential across all business lines [19][18] - Management highlighted the importance of maintaining a strong capital position and the disciplined deployment of excess capital to enhance risk-adjusted returns [39][42] Other Important Information - The company ended the quarter with an estimated RBC ratio well above the 420% buffer, maintaining a strong excess capital position [39] - The investment portfolio showed solid results, with 97% of investments rated investment grade and a focus on private credit and structured strategies [42][43] Q&A Session Summary Question: Drivers of improved Life earnings and future outlook - Management noted that the quarter reflected stable performance for the life insurance block, with mortality and alternative investment returns aligning with expectations, indicating a positive growth trajectory [48][49][54] Question: Capital plans and share repurchase program - Management indicated that detailed capital plans and free cash flow outlook would be discussed in the fourth quarter earnings call, expressing confidence in the company's direction and metrics [55][56] Question: Group protection margin expectations - Management affirmed a positive outlook for group protection, with expected margin improvements and continued premium growth, despite some normalization in disability trends [59][60][74]