Lincoln CEO: No Immediate Split-off Plans

Fresh off a disappointing fourth-quarter earnings report, Lincoln Financial Group CEO Dennis Glass said the company is not ready to reorganize, but he also didn’t rule it out.

Speaking on a Thursday conference call with analysts, Glass candidly addressed the MetLife plan to separate its U.S. retail operations. MetLife has released few additional details on the plan, which will affect thousands of agents and financial advisors who distribute its products.

Glass did not directly respond when asked whether Lincoln Financial might follow a similar path.

“I'm just going to answer that by saying we believe in the businesses that we are in,” he said. “We're making progress overall, some things to do better.”

Decisions will come down to “whatever is in the best long-term interest of our shareholders,” Glass added. “I think reactions to ups and downs in the stock price in a short period of time is not the way we think about things. It’s just over the long-term we are building value for our shareholders.”

Speaking during his company’s own earnings call with analysts Thursday, MetLIfe CEO Steven A. Kandarian said splitting off the U.S. retail segment from the rest of the company “positions MetLife to be a more compelling capital management story over the long term.”

Lincoln Financial reported fourth-quarter 2015 net income to $283 million, a 19 percent drop compared to the year-ago period. The company said it no longer benefited from funds flowing in from previously reinsured life insurance contracts.

The Radnor, Pa.-based company fell short on fourth-quarter expectations. The average estimate of 10 analysts surveyed by Zacks was for earnings of $1.55 per share.

Glass pointed out that MetLife is trying to get out from under the designation as a Strategically Important Financial Institution (SIFI).

‘What that would do importantly for them from a capital perspective, (is) put them on the same footing as Lincoln and the rest of the industry,” Glass said.

Several major carriers have spun off pieces of their business that haven’t performed well over the past several years, including Genworth, The Hartford, John Hancock and Allstate.

But Glass pointed out that Lincoln Financial has a very diverse product line and strong distribution network. The company sells twice as much life and annuity as MetLife, he told analysts.

“I think our capabilities are strong and are going to continue to grow,” he added.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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