Lincoln National Corp (LNC)

A. Company Overview

Lincoln National Corporation (often referred to as Lincoln or LNC) operates as a holding company with a diverse portfolio in the insurance and retirement sectors. Established in 1968 and based in Radnor, Pennsylvania, Lincoln National primarily operates through various subsidiaries under the marketing name "Lincoln Financial Group." It provides a comprehensive range of products aimed at wealth accumulation, wealth protection, group protection, and retirement income solutions. The company serves its clients through four core business segments, supplemented by Other Operations that include financial data from non-segmented operations.

B. Business Structure and Segments

Lincoln National Corp. reports its operations through four main business segments: Annuities, Life Insurance, Group Protection, and Retirement Plan Services. Each segment focuses on distinct financial products while contributing to the overall business strategy and revenue generation.

Annuities

The Annuities segment offers tax-deferred investment growth and lifetime income products. It includes various types of annuities such as variable annuities, fixed annuities, indexed variable annuities, and registered index-linked annuities (RILA). This segment is designed to meet clients’ needs for long-term investment and income stability, benefiting from tax-deferred growth while offering various payout options.

Products Offered

• Variable Annuities: Allow clients to allocate investments into a series of variable sub-accounts, with the account’s value depending on the performance of chosen funds.
• Fixed Annuities: Provide guaranteed returns on invested principal, protecting the investment against market fluctuations.
• Indexed Variable Annuities: Offer returns based partially on the performance of stock market indices, combining features of both variable and indexed annuities.

Life Insurance

The Life Insurance segment emphasizes the creation and protection of wealth through various life insurance products. This includes term insurance, universal life insurance (UL), indexed universal life insurance (IUL), variable universal life insurance (VUL), and linked-benefit products that integrate long-term care coverage.

Key Offerings

• Universal Life Insurance (UL): Provides more flexible premium payments and a cash value component, with returns based on the insurance company’s declared rates.
• Indexed Universal Life Insurance (IUL): Combines life insurance with investment options linked to equity index performance.
• Variable Universal Life Insurance (VUL): Allows clients to invest their cash value into a selection ofvariable investment options, with returns linked to the performance of these investments.

Group Protection

The Group Protection segment manages a suite of non-medical insurance products designed for employer groups. Products in this segment include long-term and short-term disability insurance, term life insurance, and ancillary benefits such as dental and vision care.

Coverage Areas

• Disability Insurance: Offers financial protection against lost income due to illness or injury, with both short-term and long-term policies available.
• Group Term Life Insurance: Provides basic and additional life insurance options to employees, with variations for accidental death and dismemberment.
• Supplemental Health Solutions: Includes hospital indemnity insurance and critical illness coverage as part of their offerings.

Retirement Plan Services

This segment focuses on providing retirement savings solutions primarily through defined contribution plans such as 401(k), 403(b), and 457 plans. Lincoln National develops products that include a mix of individual and group variable annuities, recordkeeping services, and compliance testing.

Products and Features

• LINCOLN DIRECTOR Group Variable Annuity: Targets small businesses seeking accessible retirement solutions.
• LINCOLN ALLIANCE Program: A more robust offering for larger employers that combines annuities with mutual fund options, recordkeeping, and educational services.

C. Distribution Channels

Lincoln National utilizes various distribution channels that encompass both retail and wholesale markets to effectively reach its clients. The company’s distribution structure includes an extensive network of intermediaries such as independent financial planners, banks, registered investment advisers, and employee benefit firms. This multifaceted approach facilitates the distribution of products tailored to diverse client needs and market segments.

D. Recent Developments

As of December 2023, a significant development for Lincoln National was the announcement of the sale of its wealth management business to Osaic Holdings Inc., with expectations for closure in the first half of 2024. This strategic decision reflects a focus on their core competencies in insurance and retirement solutions while streamlining operations.