Lincoln National (LNC) Q1 2025 earnings summary

Executive summary

• Adjusted operating income rose 14% year-over-year, reaching $280 million, with strong performance in group protection and annuities segments, marking the third consecutive quarter of growth.

• Net loss available to common stockholders was $756 million ($4.41 per diluted share), mainly due to negative market risk benefit movements and fair value changes in reinsurance-related embedded derivatives.

• Strategic actions, including a new long-term partnership with Bain Capital for an $825 million equity investment (9.9% stake), have strengthened the balance sheet, diversified the business mix, and enhanced capital flexibility.

• Maintained a robust capital position, with an estimated RBC ratio above 420% and leverage ratio improved to 27.5%, down over 250 basis points year-over-year.

• Total revenues for Q1 2025 were $4.7 billion, up from $4.1 billion in Q1 2024, driven by higher insurance premiums and net investment income.

Financial highlights

• Adjusted operating income available to common stockholders was $280 million ($1.60 per diluted share); normalized for alternative investment returns, $298 million ($1.70 per share).

• Net loss per share was $(4.41), compared to earnings per share of $6.98 in Q1 2024.

• Annuities operating income was $290 million, up 12% year-over-year, with sales up 33% to $3.8 billion, and spread-based products comprising 60% of new business.

• Group protection operating income rose 26% year-over-year to $101 million, with margin expanding 120 basis points to 7.4%, premiums up 7%, and sales up 9%.

• Life insurance reported a $16 million operating loss, improved from a $35 million loss last year, with sales up 7% and lower expenses.

• Retirement plan services operating income was $34 million, down 6% year-over-year due to a one-time operational loss; total deposits up 8% year-over-year.

Outlook and guidance

• Management expects the Bain Capital transaction to provide capital for growth in spread-based earnings, portfolio management, and legacy life portfolio optimization.

• Continued focus on margin expansion in group protection, product innovation, and scalable operating models to drive stable, risk-adjusted returns.

• Market volatility may pressure fee income in annuities and retirement, but diversification and expense discipline should support earnings.

• Expense initiatives are expected to continue benefiting run rates, with reinvestment in growth areas.