AM Best Affirms Credit Ratings of Lincoln National Corporation and Its Subsidiaries
AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of
Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of
The ratings of Lincoln reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
The ratings of FPP reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings of FPP also reflect implicit support from the greater organization.
The negative outlooks reflect the downward pressure on Lincoln’s balance sheet strength assessment since the group reported a material
The ceded business represents a significant portion of Lincoln’s ULSG business and will reduce Lincoln’s balance sheet risk, although AM Best also notes the capital benefit was offset partially by a negative ceding commission of
Additionally, management actions taken over the past year include suspending buybacks, maintaining stock dividends at existing levels, shifting the mix of sales to reduce capital strain, and enhancing the group’s hedging program to protect statutory capital. LNC also maintains balance sheet liquidity at the holding company in excess of its
Offsetting factors include Lincoln’s balance sheet maintaining elevated exposure to equity market performance and interest rate sensitivity primarily due to a material variable annuity (VA) block with living benefits. However, Lincoln’s allocation to VAs with living benefits has trended consistently downward and now accounts for less than half of the
The following Long-Term IRs have been affirmed with negative outlooks:
Lincoln National Corporation—
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb+” (Good) on
-- “bbb” (Good) on
-- “bbb” (Good) on
-- “bbb-” (Good) on
-- “bbb-” (Good) on
-- “bbb-” (Good) on
-- “bbb-” (Good) on
The following Short-Term IR has been affirmed.
Lincoln National Corporation—
--AMB-2 (Satisfactory) on commercial paper
The following indicative Long-Term IRs on securities available under a universal shelf registration have been affirmed with negative outlooks:
Lincoln National Corporation—
-- “bbb+” (Good) on senior unsecured notes
-- “bbb” (Good) on subordinated notes
-- “bbb-” (Good) on junior subordinated notes
-- “bbb-” (Good) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Source: AM Best
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