Lincoln National Corporation

Third-quarter adjusted operating income available to common stockholders was $339 million, or $1.72 per diluted share, including a $95 million after-tax hit from the annual assumption review. Net income available to common stockholders was $1.3 billion, or $6.77 per diluted share. Alternative investments returned 16.5% annualized in the quarter, producing $55 million of after-tax above-target income. Segment detail: Annuities operating income excluding the assumption review was $304 million; Life was $130 million versus $54 million a year ago; Group Protection was $77 million versus $110 million a year ago; RPS was $55 million versus $46 million a year ago. On flows, total annuity sales were $4.3 billion, Life sales were $106 million, Group Protection sales were $72 million, and RPS first-year sales were $749 million. For guidance, Lincoln expects fourth-quarter Annuities earnings to be relatively flat sequentially excluding the assumption review impact; Life operating income should rise by about $12 million to $17 million in 4Q from the Talcott-related accounting changes; Group Protection earnings should improve sequentially but the company now expects full-year margin to finish at or modestly below the low end of the 8% to 9% range; RPS fourth-quarter earnings are expected to be in line with the prior-year quarter; and fourth-quarter net outflows in RPS are expected to be about $3 billion.

Ellen Cooper framed the quarter as proof that Lincoln is turning its transformation into a stronger and more diversified earnings mix. She said the company has substantially completed the major commitments from its original 3-year outlook and is now moving into a next phase focused on profitable growth, operating-model improvement, and capital return. Her tone was constructive but measured: she emphasized discipline, said the work is not done, and highlighted that the company will present more specifics with its 2027 outlook in February.

Adam Cohen emphasized that the financial backdrop is improving, with stronger investment returns, favorable mortality, and better capital flexibility. He noted the annual assumption review reduced adjusted operating income by $95 million after tax, but said the review was comprehensive and the company remains confident in the updated assumptions. On capital, he cited an RBC ratio well above the 400% target plus buffer, leverage at the 25% long-term target, $410 million of subsidiary remittances in the quarter, $990 million year to date, $1 billion of holding company liquidity, and $50 million of buybacks as a starting point for higher capital return. He also pointed to 97% investment-grade portfolio quality and said the preferred tender offers were funded with earlier subordinated debt, reducing financing costs and supporting free cash flow.

Analysts focused on how fast capital returns could scale, what was driving the disability spike, whether incidence weakness was becoming industry-wide, the persistence of favorable mortality, and how far the RPS realignment has to go. Management said the $50 million buyback was a starting point and implied a higher run rate in 4Q and into 2027, with more specificity to come next quarter. On Group Protection, they separated the quarter’s weakness into temporary severity volatility and more durable incidence moderation, saying severity already normalized late in the quarter while incidence appears to be at or near long-term expectations. On Life, they said favorable mortality has helped but is not relied on in long-term planning, and on RPS they described a business repositioning centered on distribution, pricing, client monetization, and service/technology modernization rather than major new strategic acquisitions.