RADNOR, PA — Lincoln Financial (NYSE: LNC) reported second-quarter net income available to common shareholders of $1.3 billion, or $6.72 per diluted share, as stronger life insurance and retirement earnings helped the Radnor-based insurer advance its profitability and capital objectives.
Adjusted operating income available to common shareholders was $439 million, or $2.24 per diluted share, for the quarter ended June 30.
The gap between net income and adjusted operating income primarily reflected the non-economic impact of changes in market risk benefits, according to Lincoln.
Holding-company available liquidity increased to $903 million, excluding prefunding amounts. Lincoln also completed a $500 million subordinated debt issuance, with proceeds intended to provide flexibility to repurchase or redeem outstanding preferred stock.
“We delivered another quarter of year-over-year earnings growth, supported by strength across all businesses,” Chairman, President and CEO Ellen Cooper said.
Life Insurance produced operating income of $57 million, up from $32 million a year earlier, as favorable mortality and the impact of a fourth-quarter 2025 captive consolidation outweighed lower alternative investment income.
Life Insurance sales climbed 79% to $216 million, driven by growth in Executive Benefits and Core Life. Average account balances, net of reinsurance, increased 13% to $51 billion.
Annuities generated $287 million of operating income, unchanged from a year earlier. Favorable equity markets and higher spread income were offset by variable annuity outflows and a $12 million net investment income reallocation to non-operating income.
Annuity sales fell 13% to $3.5 billion, with spread-based products accounting for 63% of the total. Net outflows widened to approximately $2.9 billion from $1.2 billion a year earlier, primarily because of traditional variable annuity and registered index-linked annuity outflows.
Ending annuity account balances, net of reinsurance, reached a record $182 billion, nearly 9% above the prior-year period. Average balances rose 12% to $179 billion.
Retirement Plan Services operating income increased 32% to $49 million, supported by higher spread income and favorable equity markets.
The business reported $2.4 billion of net outflows, compared with $585 million a year earlier, reflecting actions Lincoln characterized as intended to improve profitability. Deposits rose 4% to $3.7 billion, while first-year sales declined 23% to $900 million.
Retirement Plan Services ended the quarter with a record $131 billion in account balances. Average balances rose 15% to $128 billion.
Group Protection operating income declined $26 million to $147 million. The year-earlier quarter included a $15 million experience refund; excluding that effect, earnings were $11 million lower, primarily because of a higher disability loss ratio.
The unit’s operating margin fell 210 basis points to 10.4%, while its total loss ratio increased 250 basis points to 68.4%. Excluding the change in experience-refund recognition, the operating margin declined 100 basis points and the loss ratio rose 110 basis points.
Group Protection premiums increased 2% to $1.4 billion, reflecting prior-period sales, while new sales declined 17%.
Lincoln reported an $8.5 billion pretax net unrealized loss on available-for-sale securities as of June 30, narrowing from a $9.1 billion unrealized loss a year earlier. The company attributed the improvement primarily to tighter spreads.
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