RADNOR, PA — Recently, Lincoln Financial Group (NYSE: LNC) reported its financial results for the third quarter ended September 30, 2023. The results offer an insightful snapshot of the company’s financial health and operational performance, providing investors with crucial information about where the company stands.
“Our earnings this quarter did not meet our expectations and reflect that our progress will not always be linear, but I am confident in our path forward,” said Ellen Cooper, Chairman, President and CEO of Lincoln Financial Group.
The net income available to common stockholders was $4.79 per diluted share. The adjusted operating income available to common stockholders stood at $0.23 per diluted share. This included net unfavorable notable items of $0.84 per diluted share related to the company’s annual review of reserve assumptions. There was an additional unfavorable impact of $0.41 per diluted share primarily related to factors impacting the Life Insurance business.
Group Protection earnings were impacted by higher life severity and weaker disability incidence, although the underlying margin expansion remains on track. Retail Solutions businesses saw sequential sales growth, and there is a strong sales pipeline in Workplace Solutions businesses heading into the fourth quarter.
However, the company also faced some challenges during the quarter. Expenses increased year-over-year, pressuring earnings across all four business segments.
On a positive note, the credit experience was favorable this quarter as the credit portfolio continues to be 97% above investment grade. The estimated Risk-Based Capital (RBC) ratio was stable and ended the quarter in the 375 – 385% range.
In terms of strategic initiatives, significant progress was made towards the expected closing of the Fortitude Re transaction.
Annuities reported income from operations of $248 million, down 10% year-over-year, driven by higher expenses as well as net unfavorable notable items. Total annuity sales were $2.7 billion, reflecting a 16% decrease from the prior-year quarter.
Life Insurance reported a loss from operations of $173 million compared to a loss from operations of $2.2 billion in the prior-year quarter as a consequence of net unfavorable notable items.
Group Protection reported income from operations of $68 million in the quarter compared to income from operations of $12 million in the prior-year quarter due to improved disability underwriting results and net favorable notable items.
Retirement Plan Services reported income from operations of $43 million, down 9% year-over-year due to higher expenses. Other Operations reported a loss from operations of $113 million versus a loss of $112 million in the prior-year quarter.
Realized Gains/losses and other impacts to net income after-tax totaled $1.0 billion in the quarter, driven by a gain from annuity market risk benefits and associated hedging, offset by an impairment of fixed maturity available-for-sale (AFS) securities.
Unrealized Gains/Losses reported a net unrealized loss of $14.2 billion pre-tax as of September 30, 2023. Holding company available liquidity was at $455 million as of 9/30/2023 with RBC ratio estimated in the 375-385% range.
The financial results for Q3 2023 indicate that Lincoln Financial Group is navigating through challenges and making strategic moves to maintain its growth trajectory. As the company continues to focus on strengthening its core business segments and improving operational efficiency, investors can expect Lincoln Financial Group to remain resilient in the face of evolving market conditions.
For other financial information, refer to the company’s third quarter 2023 statistical supplement available on its website.
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