Lincoln Financial: ‘Solid’ Q1 despite loss, moves toward Bain partnership

Lincoln Financial reported a first-quarter net loss of $756 million, or $4.41 per diluted share, driven by a $0.9 billion after-tax loss tied to market risk benefit changes stemming from lower interest rates and equity markets. Despite the loss, the company posted $280 million in adjusted operating income, or $1.60 per diluted share, which the company said underscored strong operating fundamentals across annuities, group protection, and life insurance.

The announced partnership with Bain Capital, including a minority investment expected to support acceleration of strategic priorities, is expected to close in the second half of 2025.
Ellen Cooper, Lincoln Financial’s president and CEO, said the Bain partnership is a “pivotal milestone in advancing Lincoln’s vision, providing differentiated access to private asset origination, accelerating value creation across multiple value streams, and aligning our interests with a minority of ownership stake.”

Quarterly Snapshot:

• Adjusted operating income available to common stockholders: $280 million
• Adjusted EPS: $1.60
• Net income (loss) available to common stockholders: $(756) million
• RBC ratio remains above targeted buffer (>420%)
• Bain Capital partnership announced, closing expected in second half of 2025
• A favorable accident year combined ratio (AYCR) of 88.3% underscores disciplined underwriting and risk management.
• AIG returned $1.8 billion to shareholders in Q3, reinforcing its commitment to shareholder value.
• The adjusted after-tax income per diluted share increased by 18% year-over-year, reflecting underlying operational strength and efficient capital management.
  

  Management Perspective :

CEO Cooper said the company’s transformation strategy continues to gain momentum. 'We delivered solid results as Group Protection earnings rose 26% and annuity sales jumped 33%, while Life Insurance results improved on better mortality and expense control,' she said.
“Against the current backdrop of macroeconomic uncertainty, the strategic actions we have taken over the past several years to strengthen our capital foundation, optimize our operating model, and shift to a more resilient and diversified business mix leave us well prepared to fulfill our commitments to shareholders and policyholders despite the ongoing volatility.”

By The Numbers:

• Total Revenue: $4.69 billion
• Net Loss: $(756) million
• Adjusted Operating Income: $280 million
• Adjusted EPS: $1.60
• Book Value Per Share (excluding AOCI): $67.04
• Adjusted Book Value Per Share: $73.19
• Deposits in Retirement Plan Services: $4.1 billion (+8%)
• Stock: Up more than 16% for the year, to $33.99

Life Picture:

• Adjusted Earnings: -$16 million (-$35 million in Q1 2024)
• Sales: $97 million (+7% YoY)

Annuity Picture:

• Adjusted Earnings: $290 million (flat YoY excluding 2024 significant items)
• Sales: $3.8 billion (+33% YoY)

Group Protection

• Operating income of $101 million in the quarter, up 26% compared to the 2024 first quarter, and an operating margin of 7.4%, a 120-basis point increase for the same period.

Retirement Plan Services

• Operating income of $34 million in the quarter, down 6% year over year, primarily due to the impact of a plan termination. Excluding this impact, earnings were unchanged year over year as continued stable value outflows were offset by market appreciation. Total deposits were $4.1 billion in the quarter, 8% higher than the prior-year period, driven by higher recurring deposits.

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Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].