LNC - Earnings call transcript Q3 2020 | Lincoln National Corporation

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Operator

Good morning and thank you for joining Lincoln Financial Group's Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Now, I'd like to turn the conference over to the Corporate Treasurer, Chris Giovanni. Please go ahead sir.

Chris Giovanni

Thank you, Katherine. Good morning and welcome to Lincoln Financial's third quarter earnings call.

have reminder. I begin, we an important Before liquidity Any trends about and during the the Private repurchases, sales statements Reform are future expectations, call regarding and share market operations, of deposits, Securities income comments capital under expenses, resources forward-looking made and from and Act conditions, XXXX. Litigation including comments forward-looking involve risks actual materially differ to expectations. statements and cause These from results uncertainties that current could issued uncertainties and report in those described as cautionary detailed the those disclosures the release most on recent annual include in our quarterly Form statement in earnings in time-to-time SEC. reports filings These from our yesterday, XX-K, XXXX with as well on risks our and other XX-Q, Form undertake to to of date. These revise any events no reflect or forward-looking occur are and obligation only statements update after them made circumstances as or that of this we today today appreciate to and the www.lincolnfinancial.com find adjusted equity you adjusted can website measures. your income you which return adjusted to operations GAAP call We income full operating Lincoln's release supplement participation most to used their or visit on on where non-GAAP statistical measures comparable include press and our including invite from and the reconciliations and today's Individual Officer Chief Presenting Glass, Chief Officer; Dennis call Freitag, on and and Randy are Life. Executive of President Financial Head their move we of to will prepared remarks, the After the question-and-answer call. portion call Dennis. the to to over would turn like I now

Dennis Glass

capital economic stronger. capitalizing Good Chris. challenges, and and health, you, morning we Thank market the maintain responding everyone. is become competitive to ensuring Lincoln opportunities on advantages our well

investment a our management or the expense long-term to return quarter Returns compared continue ultimately, levels headwind annual Protection from the are return our after at in adjusted pandemic. recovered operating our interest we And consistent pandemic after the on portfolio Low XX% significantly and efficiencies. targeted our to expect top claims in the we through strong line second results while solving are X% quarter quarter elevated and with normal related X.X% this businesses, Third were in nearly expectations. of annually. Life review rates the effects profitable alternative for to from force but claims we see Group to normalizing growth,

and Our distribution. to actions we businesses our market terms and taking positioned firmly growth. We're intact, across for leadership are underlying are sustain our by strengthening breath product our class world earnings positions on and expanding

continue re-priced shift we and new execute Specifically, product and businesses our enduring portfolios. aggressively our to strategy product with add to bolster all-weather

during to different sales we have new eight actions of capitalize across products half portfolio products the enable customer our expand breadth of pricing returns, bottom and next This improve us top year. that position value while and consumer introduce us and choice our Here volumes the on will well taken to at we today, appropriate XX first existing to will plan product propositions. long-term increase drive and growth. line adding combination suite strategy This product new

we our which expand are more flow. solutions, help of improve focused products, designing our efficient capital cash we on will free As customer portfolio ultimately

actions that taking capabilities. customers. enabling by see and further we while saving the opportunities expense customer Notably, and productivity expense leveraging these adoption In savings, digital are given by increased are advisors digital addition the both and accelerating to line top experience to and us we meaningful initiatives, achieve increased improving

balance we to sheet flexibility. on our continue focus Lastly, strong maximize to financial maintaining a

of RBC in our added our and sources risk capital and to ratio, We reduced investment have portfolio. increased the liquidity,

resume to Over quarter. leader is and quarter growing operating and insurance all the adopted in quarter, returns. to annuity, flows Annuities segment third sheet, are annuity life $X.X variable as illustrated that this prior good by than market, which XX% all more buybacks outlook period. well fourth solid on which Sales policies, and lead balance by in when XXXX across combined underlying positive the expense have partners decreased including; our is achieving delivery. increased the marketplace, earnings, This all that decision digits into highlights, our annuity billion. leading top market fastest We products index quarters for resonating And In across prior doubled the annuity year of net with over current continue the more to revenue strong G&A are our our electronic and in initiatives applications to positive our is business third businesses. business, the year compared executing surpassing add businesses, to several mid-single variable these outflows of we our a the

As annuity continue we DAs and sales. down annuity and with living we as were to benefits sales expected, total reduced fixed de-emphasize benefits

We expect to quarter. trends persist similar into fourth sales the

As product we product broad portfolio. to expanding we look are to value innovation additional consumer XXXX, leveraging already our create propositions

pricing existing Insurance our on next Life our the suit heading strategy, Within our to The position business, industry due product following competitive sales on re-pricing. has year. into improving started declined portfolio

will opportunity see some product in half products, be first Additionally, we account meaningfully of the and introducing MoneyGuard, products to such but increase provide with upside with engines, year. investment offering as an our solutions where consumers are more potential value reduced benefits. we such total to propositions on guarantees, in with consumers the separate as a of more core focused next enhancing alternative we By new

sales quarter, we provide solutions be greater with sales While will prior to quarter, XXXX year reach. expect lower the in market in in meaningful due part that entering we record be fourth to the

product strongest Retirement Plan high touch us position portfolio As we've to in model high where in platform enables will in tech in environment. excelling current utilize industry the growth XXXX. done the past, In the for and Services we focused are digitally the is virtual distribution broad our and expanding

shifted retention sales, sales new outstanding virtual more and to Our retention seamlessly driving platforms, and that growth teams results. strong

at retention sales XX% X% over total XX%. excellent up and year the was were year quarter, First and increased deposits prior client

Net economic healthcare on contributions and key sector. impact were reducing less growth. retention than value matching of eliminating and the due headwinds particularly to reductions, been including position continue manageable positive, we workforce markets see environment driver account a the we the employers focus again flows the to has prominent the been While has related or to our in once serve, pandemic, as �� some our and

Looking and the space. continue long-term solutions to to plan path related sales see forward, targeted Also, in to significant funds expect Act, we of the employer a strong. VA of defined remain we in plan opportunities to simplified guarantees pooled our result contribution alternative as CARES

Lastly, to and environment, the the premiums in due year the decreased to quarter to covered and X% on persistency contraction when lives sales increase led Sales activity in is over to than lower timing year offset court quarter. a Group period and the employment closed. case delayed prior compared the Protection, strong of prior due which more in the economic

fourth in We have seasonally our benefit strong which quarter. seen sales the activity resume, should

growth being expand cross of We paid on from customers focus from generated This up our employee continue resulted enforce complimentary in XX selling year-to-date our suite XX% of to percentage products. employee sales by has paid points.

earnings put of the While has importance the of products. on pandemic protection term awareness has increased employee our it near pressure

expect to end this of enhance We upper their we targeted the to And range. our are subsides. the margins pandemic to taking emerge as actions

capital strategy as in would growth. Lincoln decreased appropriate line several important our that returns segments of we best said on we profitable a for achieve points. and expected, as disciplined sales ensures emphasize most long-term aggressive result saw That positions So repricing bottom and I

particularly XXXX fourth First, and out quarter, because sales based expect repricing the on and in businesses. of bottom the lead competitors beyond we in and follow to see in industry our Life With annuity for actions. reemerging to starting strategic are we growth course, our

as forward on curve business now at least across we on the fourth we quarter, Second achieving all the our enter XX% based a return new are businesses.

and sales to to resulted XX% of changes been demand the in pricing And market advantage be has distinguishes expect distribution non-guaranteed sales and a an Third, will finally total to trend exceed Lincoln. of continue. continue has that products we

the model distribution growing and effectively environment. Our in current is operating

advisers For of new added near-term Regarding year-to-date including attended remains we've producers over as by group virtual areas a XX,XXX strategic with other Liberty meetings, X,XXX expense which focus, management know focus all and over more were million key year’s hosted you example, track. our opportunities than and have quarter and targets, for Since capabilities, preserve second acceleration earnings we along our synergies, $XXX with saving identified program on sales program adoption. this digital effectiveness XXXX, through in savings, digital this to year call, virtual in additional X,XXX predominantly

of forward, Looking opportunities, Since balance could improving expect have sheet. rates successfully we but and savings pandemic, require we the incremental further even these focused protecting some onset on the the further investment. run

For increased. and example, RBC both a have cash holding company as ratio

capital XXXX not facility. and our flexibility with We next financial completed until a we contingent have third enhanced due the quarter, September in debt also maturity, our

Within impacts we programs recognize derisking than and the onset lead that pandemic at RBC as from and credit our and of the responding. favorable the have investment more to of improved. industry portfolio, In benefits expect that outlook Experienced closing, continue our the credit downgrades. are governments actions expectations potential losses has nine to headwinds we to-date is various

restoring in capital. returns products on and appropriate to We well are preserve achieve after sales our way growth towards XXXX repricing actively

committed have programs portfolio. and reduce our entered sheet the enhancing in investment this and expenses continued have while efficiencies well strengthen our prepared further experience. reduce to are lowering We customer and to costs to crisis improving We targeted balance and risk

we've And of to While and blocks, program capital fixed hedge cash one acted variable, we're and first deployment, performed new improved reducing by well. both accelerate to over our exceptionally free the flow our variable time companies strength. business recall reinsure annuity annuity has have

taking shareholders. be of underlying turn and for approved buy increase confident that returning of believe shares we to stock a and business value exceptional Board actions the and are move dividend, with I I result at XXXX. now Randy. more sheet plans about our the our we pleased be We're that will as price opportunity As will an confidence call balance and the value. deliver to our couldn't our solid capital that presents positive outlook buy X% our to the a a in market execute our over long-term into Directors in common position, we more an we quarterly to earnings

Randy Freitag

you, million share. Dennis. Thank per a $XXX or loss Last adjusted reported third $X.XX we of operating quarter night,

in note was from we decline low nearly policyholder there that year's is positive adjusted reduction is the not rate year. was in It assumption to impact basis rates approximately our impact net from expect to change coming $XX with our related no a with within this adjusted XX ratio, Outside non-operating. does of view point annual earnings operating one of million a in capital in a behavior end reserve rates resulted business. review non-cash $X.XX of XXX basis notable in noted included predominantly net an with net the partially million rates, important the review Life point of if and This of negative from reserve share, of not items the $XXX to this $XX favorable interest money we impact new adjusted on million coming our income, annual and million at income million in X% business by results potential charge Included annuity the interest year's policyholder negative million statutory $XXX and included in stay and ultimate impact RBC third of behaviors $XXX DAC this or does interest a in As rates. impact $XXX operating assumptions. where per the negative in from with offset strengthening long-term unfavorable operating release, income charge two-thirds unfavorable

these all Beyond other the annual of impact. review an immaterial components factors, had

the million As $XXX unlock provides not part year's we to declines review, still equity an pretax reversion did mean in this which the approximate corridor, cushion the markets. against of

from In this also a the the few by addition assumption quarter items. significant to impacts impacted annual was review,

quarter-to-quarter, or the earnings represents XX,XXX which discussed. expected mortality every the by we we million $X.XX $XX per $XX we for and share, see component First may this COVID-XX have included for for impact. a from claims. company proxy impact, claims reduced believe disability was million million related $XXX But good volatility mortality a $X above The deaths million the approximately

mortality, Second, pandemic. from direct in elevated impacts, population our from mortality the related we results the or is which addition broader per believe included also $XX to Group to and COVID-XX million U.S. Life trends arising $X.XX share

align of earnings driver Third, our boosted strong the million $X.XX income to investment annual practices. totaled performance share, $X.XX $XX share by return largest update results or our million relative or more from per peer per which benefited being in risk to to an portfolio, with Net non-performance alternative with targeted calculation XX%. the $XXX

of think by favorable positives $XX of net the in were we income million. the million NPR CECL and income $XXX change non-operating in included $XX a movements reminder, impact from a have a this as reserve. from did net Other As while annual and largely increased non-economic, result positive our reduction review million

variable performed in program the Lastly, effectiveness quarter. with exceptionally hedge XXX% annuity well the

Moving $XX.XX operating financial expenses decreased period. values year up adjusted metrics ratio X%. share revenue with increased the AOCI Total book And points. combined year-over-year to amounts key basis increased revenue expense when prior and per consolidated capitalized the XX X%. net improved of performance of Average excluding G&A to at stands growth, over the account value X%

year notable normal a on as annual VA segment our items to income the operating with items review, which of Consistently starting turning book results, to impact basis increase related are interest was values million, continue increased amounted account in XX of approximately values higher run a and of the million for XX quarter, deliver. favorable X.X% from $XXX a both strong, evidence reported primarily by on points ROE hedging investment business our X% metrics alternative the of basis and operating to basis. prior Now $XXX income favorable living for quarter demonstrate results driven value Return metrics rates. our sequential Risk to death included annuities, in for ROE and income. from the both increased strong Adjusting Average $XXX the unfavorable remain account points risk year-over-year well benefits. for to benefits returns and billion quality annuity reduced account periods excluding average and XX% can risk XX%. account what solid business, of net is metrics to but values

rewarded sequential not is variable a on but compared believe the prior excluding year, marketplace. to we decreased Base investment Something the by spreads increased basis. income

capitalized of the with organization. we crediting amounts net rates. actively remaining continue X% manage decreased to management As G&A year-over-year, expense expenses across focus a

Services expect we Looking compared in from by $XX year, the annuities normal to Plan the to fourth driven returning operating of ahead income reported performance business, more investment with million and alternative to performance prior with alternative the quarter, increase the continued expense $XX investment Retirement strong million results levels. management.

period. match million with combined a the markets had resulted $XX which in of where flows yields variable combined a improvement Net no net prior account the to with in totaled billion impact the A ratio. quarter, on up expense excluding points X% which million XXX X% normal. compressed in basis the G&A Our operating rate revenue annual average review unfavorable adjusts X%. impact Primarily year, to and current securities, the $XXX income to quarter, growth $X prior on drove above in in the income equity was spreads year-over-year versus decrease the when due values liability in lower crediting basis investment Base rate year to less point favorable quickly. XX floating expenses

had remaining basis XX drivers at quarter the good key in with growth points. a forward. strong and The expense quarter, discipline, was organic ROI strong However, going retirement business

offset unfavorable the for Turning notable performance, to impact to for an our included year to which by loss the in-force interest to expenses operating $XX life periods and COVID-XX up X% both growth we of to investment $XXX average Underlying XX%. approximately drivers which net year favorable XX our Base above a compared insurance, values driven related operating a to Adjusting $XXX declined million, spreads basis prior XX more with G&A mortality show the five XX increased items basis primarily review, point the decreased year-over-year, expectations. annual average in up point improvement account year, in Life quarter unfavorable from elevated related prior largely compared to million. continue earnings of ratio. than million which X% rates. the income to prior results expense over insurance points quarter, in alternative reported basis led

mortality. headwinds expect COVID-XX from we continue to forward, related Looking

driven will mortality. us year, key pandemic the $X growth related compared remain However, in Protection to Group operating and unfavorable the $XX income prior million of decrease reported million by solid. pandemic be with drivers the eventually behind

Our million compared annual review current total impact net favorable reserve impact the prior year to in nine loss in of $X income loss quarter, had XX.X% of unfavorable driven at net $XX to quarter, million in ratio a operating prior compared percentage was the The to year the up a the Life period period. increase predominantly the Group points experience. with assumption by

million. of over have emerge we excess And I mortality This claims was course noted Life COVID-XX the mortality as seen the elevated total $XX quarter’s the mortality was direct also for from Group as business upfront, pandemic. impact

our was good loss was periods ratio to loss consistent this dental second rates with G&A maintain incidence quarter. the with favorable elevated Our expenses more decreased performance even utilization dental year. with quarter period organization of prior of to business during the In experience and disability service normal to compared consistent levels levels the high customer return as our our ratio in flat X% expectations activity. the claims claim the staffing following increased very in in recent were the

While despite premium pressures and an the encouraged quarter’s a book and pandemic have expense disability continue impact, the obvious economy. are in pressure good to this performance by will management the our from growth, earnings, we

statutory capital XXX% and Turning management. capital and respectively. ratio increased with $X.X year's Continuing to capital and the this trends, to billion, RBC

contingent company financial and within flexibility our million. stands which tool while While executed cash $XXX capital facility, enhancing all million In another in holding August, us capital we at at the our environments. $XXX provides market a framework, liquidity

the towards million buybacks As to plan the over approximately quarter in the fourth resume to mentioned, buybacks we of remainder $XX deploy year. Dennis expect and

for quarter quarter's conclude, practice. earnings our pandemic due call, view, assumption with impact interest large earnings to next update headwinds from from decrease our they on to outlook included To you return related XXXX in mortality. third significant continue will rates a consistent on and our the We historical experience annual capital

are Looking management, earnings. me positives, and dividend call the as announced to to to shareholders G&A those strong And revenue continue all through to of with expense that, items, X% in our With was see Excellent four had in the growth grow, underlying resumption our we several including done back over let we Chris. Capital increase this quarter's continue the results quarterly across return increasing turn an company. buybacks. businesses. and

Chris Giovanni

you, Thank and Randy. Dennis

will the question-and-answer now call. the begin portion of We

we that please to follow-up, and yourself begin question reminder, re-queue a me limit you have Q&A. call if you ask then that, questions. the As one let Katherine one turn to over to and only With additional

Operator

from Instructions] Krueger [Operator question Ryan with Our comes KBW. first

line Your open. is

Ryan Krueger

on question First Group the was Life mortality.

really levels haven't guess record - elevated seen, mortality I non-COVID of companies. We other non-COVID related by

think So hoping it's detail more if a continues seeing. you're COVID you could bit a quarter anomaly? as on one provide little if you will of more you it or what continue And think

Dennis Glass

analyzing spent broadly. amount fair time of We this a

We number have at looked studies. a of industry

the think mortality. roughly as peer in there this the of participate what emergence across related has SLA from We And industry. you've And companies. our that is does good information participate. year, XX I course a that over come data companies seen really pandemic the in work aggregating a described we've of we've of the number analyzed as

away out in the a but life continue the in on of inside think better as a think near it rule run with virus reasonable So reasonable also overall impact the will individual In pandemic way. you of original and the think to business, company, terms, figured that I for our the we've line COVID-XX it's once thumb. the you developed to think about will manage term, continue expectations I term, think think I if about Ryan, broader think to way near go the it's that we in to

was going once go we've underneath of we older individuals, it you our death if worked information the and I is thumb done the age rates never I exact worked back I trend, some beginning think think once at about when think not the as relatively But quarter, just on were established again, we to of again, you that, rule with probably that, to for per was I'm evidence having it's that was to pandemic, this our high, established treatments. we've impact you're this. it all because something get a the brought probably going you're rates third XX,XXX of death X million hypothesize because sure, thumb, there think to second quarter, down for know better for rule going the to job,

a age us protecting better think older I You've seen people. do job, of

some on is total, million of we to been there from has So to other different that's working pre-COVID experience, sort inside group still shift but continue little business. this that the pandemic in a of related, X it probably the

thumb, up to addition up as to started has this what established When causes working and not respiratory that, up there other about If of we and you year-over-year, in we for at rule other aspects a see pandemic that you issue gone age going it all disease spread started was really was that related. XX% look calling into think we that you roughly about this when across significant population. to original our of death, much XX%, XX%. become age, see it we year-over-year, study, of we're COVID-XX see of heart the older But the America, cancer is the to evidence population besides in emergence on see

continue that near-term. the Yes, So to a answer for Ryan would I question would expect, I long that. expect original was to your

Ryan Krueger

the And quick much then expect power within given insurance would ongoing just of from this? you assumption business do review an just to life impact, impact one large relatively one, its you earnings

Dennis Glass

sort something about forward. that And five worked we've impact made what, or years, four material these It's a been overcome. really I to had been interest think assumption done the answering ongoing it's has we've Ryan previous this, rates, a if something time And has and over we've it going impact. bit of similar every to around think an of you changes questions. these made years times and negative that hasn't it

not Brian overcome out. So but we're hard have impact. a that negative yet work to of does similar a last going impact, to bit time, something We're specifically to strike

Operator

Our next Partners. Dowling question & comes from Humphrey Lee with

Your open. line is

Humphrey Lee

the to market an you to had going at market but for forward, and impact, the pretty strong were cooperate? continues less quarter. in normalize Just sustainable ROA, kind looking third of ROA Clearly, RPS, the assuming the especially see do annuities both these

Randy Freitag

thanks Humphrey, for question. the

I sitting business, can seat, been then points think in in long the maybe Annuity quarter. in we've ROA been basis about for long XX I in around this as a reporting as as I've remember, an as we were XX

I So that, that line ROA yes, expectations. think is all would an around ranges right with in in indicate evidence our

$X I in in think the some it mentioned I quarter. business, did a have benefit alternatives. roughly they the quarter, the from return strong It's was strong million

So expect them normal you'd XX of in what see I is to the at think end upper a sort of quarter.

their So a little ongoing above ROA. probably

Humphrey Lee

line And the or can of guess, of has and how premium economy the into top on definitely top growth Group enter trend about the default I periods? the especially you then in given employment terms some line the kind will for headwinds industry elaborate we Protection, growth seen thinking as enrollment I conditions. think wide the your

Dennis Glass

it'sDennis. Humphrey,

Just year's third quarter quarter X% statistics versus last up the year-to-date. year-to-date third we're

that good has is been Some premium increases retention. driven of discussed we've that by

we those that develop it's of pretty we're see trends we'll see into And but comfortable to move driven as how premium Some XXXX, sales. by have growth. new we'll

Operator

Our next with Evercore. from question comes Gallagher Tom

open. Your line is

Tom Gallagher

type just running might back or than be what environment to levels way the buyback Would about you're planning level free where are all all get given the basically? at of you prior comment lower do you think can of you on? you question, it First

Randy Freitag

Tom it's Randy.

right. think quarter as always, one I at we time, take a really this

fourth planning And $XX mentioned, then talk the so I get we and about on quarters you And remarks in into in to the as prepared as we'll we're our million beyond. XXXX next quarter.

million RBC to in fact the the but added the think of sheet, where, it toolkit, fourth the capital at the we mentioned quarter, balance in our of $XXX our third I when prefunded very a sheet fact the starts through about the balance so our of strength script sheet. returning buybacks And you ratio, capital buybacks we're that million is the cash with XXXX. definitely with holding as strength And maturities the debt XXX% of comfortable shareholders, the contingent we've $XXX quarter, company, that there. facility to the balance the So,

aren't quarter, on which more in So a you then why which you historic is might we've going $XXX average. range is historically million what at your back with done ask, level,

So when a would things. think about we that, couple I out just point of

First the where confidence expectations think down I than substantially have if the But from it March. that around is is to say back fair at come it's in interval credit, wider normal. look that you expectation, still or the wide than were, they relatively a

would but the think, Tom, that still by the in point from million that $XXX mortality significantly, is business. I $XXX and impacted across million, credit being So claims quarters, are I I still thing we're uncertainty is environment. just improved another is fact million roughly we our COVID, mentioned $XX reflecting then there some in the generation, And out other capital the so from related

negatively we the are by that being So, behind will term impacted in this pandemic. us, be but eventually still near

Tom Gallagher

the my point give you effectively consider if freed block Does then Curious and data that X sectors new a that? would given a up of deal. it about what to Thanks, And thoughts PE, above kind you be follow-up in the rest that announcing your or well down Lincoln of that an and where had how trading? competitor thinking about money that path and move the you at capitalized annuity that's consider, deep risk obviously you Randy. on, willing transfer particularly are just to a that variable block, something are was a there, you'd

Dennis Glass

let Dennis, is that. me this Tom, take

questions transaction, we've economic as we the that business said, flow our if Let and Overall in add in any our any a blocks say comments. we makes in couple sense. and that's like me or opportunities that positive. a it specific the deal more that answer your capital either remain way the market - When of of sell for to

the marketplace, on economically, for we're block staying we past, So I done remind and of can also And will the we VA fixed you that. sense do the if we’ve point, that flow. course good do just on the makes like in to transactions that something annuities. in

You VA. recall block place. of risk insured billion living remains a that that we in XX% And guarantee on $XX of benefit the

a deals. annuity pure, four fixed reinsurance also deal. We had block we've And did

the we've where sense. marketplace it demonstrated a in participate continue we'll to and makes years, lot the So of creativity economic over

Tom Gallagher

more broadly, the margin? guess But something open doing would or those transformational I more say to you more other at kind you'd were of be deals

Dennis Glass

Tom transformational. sure what mean you exactly not I'm by

look strategy the in at our market. Let's VA

with First least across at that business the phone in-force risk, the in blocks we have we'll on industry. start most most folks the of know

And return and Randy's XX% equity years. pointed already for been to out making with that business no we've on blowups so in XX% that

it's day strong strong we rider and market seeing business every part hedged good is So reason a a across our think one. consistently. the we the We've for moment, VA, from At from returns Lincoln. guaranteed so of our We business perspective, in remained the very we're is block. that risk

of return. get as looking capability very benefit we're And risk comfortable living our particular with forward, so, I we're the pricing appropriate the said, of to all and earnings products profile block. Again

the the And on so business even guaranteed benefit benefits been living fine. that's just has demand though lowering

the continue to see index, we're block And growing. we moment. And it. also rates been great returns the it's sell at are to continue very on And block return the VA that the on happy all get our deployed We strong. way to of capital

fixed we've annuity demonstrated and managed historically, a up the business think and well a I it's earnings be business showing in to So we've that returns. with

Operator

Bass Erik from Research. with comes question next Our Autonomous

open. is Your line

Erik Bass

cash talked returning next to expected the the guess you've free given flow generation levels or that of strain forecast normal anticipate sales in new do about you Listen your And your reduce the strain did product recovery changes on more year, I sales?

Randy Freitag

Erik, we Randy. it's cash see free I in don't Yes overall a profile. flow significant the think change

in But definitively designs mentioned, grow lower think I where product the sales XXXX. beyond we we capital have to here expect as leads. we new are

have of maybe coming dollar go relatively up, you'll down sales so, sales sort usage per holding And while level. capital

lease though dollar per flow, will down. cash amount no of to expectations So change be capital sales the big coming levels for our of of even

Erik Bass

less mean the that. And does the is than VAs? hold terms mentioned amount so maybe liabilities? you is difference from sales? strain much as capital that capital in there a annuity have you've of product following of percentage up of I buffered capital And How guaranteed in the how of intensive to what mean, on

Randy Freitag

without with and because hit VA day below one - In would just with their in the would then end at get charge IVA be a guarantees then Yes, capital that's end, first be getting would and if CX middle the even strain, the into the be significant appear particulars in fixed rank annuities it product. of and primarily fixed lower and you annuities the would terms upper annuities ordered that VA on year. the non-guaranteed be

a roughly IVAs the annuity. the into half getting without So are typical strain specifics indexed of fixed

Operator

next Barnidge Our John comes question Piper from with Sandler.

Your line open. is

John Barnidge

that that's as this? maybe that because the make non-COVID emerging about a more secularly population grows reinsurance product you see of in mortality I a can broader alleviative Does out think utilizing

Dennis Glass

we're What is range. I whole to use think using is that discrete that I a reality at don't the expectations group XX,XXX the a in year, it's we Remember the we think reinsurance? what our looking a is lot that's decision about that average group for John, think business. year every are making - reinsurance cost every mortality in of the forward? reinsurance of looking So we're single XX,XXX when claim

business. an we type number Obviously, base a reinsurance individual expectation amount life So of use sell we of you're the where policies. it using larger business in not a more of group do talking significant about a in

changes think hot our itself don't we business I model. our red the reinsurance utilize part So of this as how at moment view of pandemic

John Barnidge

anticipate follow-up, my renewal of we assuming Would a hardship waiver. you the XXXX increase then retirement? get in Thank answers. possible you for your And withdrawals for

Dennis Glass

remarks, As have the in my in block I part concentration great consequences of year. segment. John in programs our our not the on been government this to that's business healthcare And mentioned, of the related

of whatever sell be, on effect where might be programs has close, the business. our we new those we because that at industry we'll what that, think knowing lower not end of if So

that we So again, will a don't think be effect. significant

Operator

next question Citi. Suneet Kamath our comes with And from

is line Your open.

Suneet Kamath

be force on educate products I'm we given half the think across move products. year, picking up Should the think as ramp sales ramp I these or remarks of up year. distribution up in second to that sort a eight new said of think your your about about as sales you growth you're time it the going there you'd be may I think Dennis, on more that is we in that next period year? of was assuming launching, prepared required planning should how pattern we the of

Dennis Glass

the course Suneet this year. to terms businesses, out our to the annuity new across we expect sales of started through a fourth XXXX, quarter. then slow the business of from Yes, bottom your life the in and mostly in in And build point quarter,

Suneet Kamath

remarks, said then prepared you're And incremental some about in your cost maybe talking savings. also you'd I think

So recent the that curious size years? compares maybe achieved cost could us savings it how program some if you of for just you've in that to

Dennis Glass

had a you plus million Yes, running by I think million to end net which XXXX. $XXX up $XXX program, is $XX we're go so digital we of sort the towards the still which and if underway, of were target, growing million investment,

it On of ongoing a savings occurring reflects Well, of mentioned sizing those a share and and some back million will Randy $XXX spring we with now which that's forward. talking that comfortable that $XXX keep others. much mentioned and when in we and incremental Suneet sort two the we're go could million on about. that you it we'll increase, of preserving as in as let have and people that XXXX, what important get in of is million that me of That top process We're aren't So things XXXX, right increasing things, is program. magnitude that, we with of but top say we one, the $XXX can like travelling in $XXX take million. investment. that I total,

Operator

comes Greenspan with our question Fargo. And from Wells Elyse next

is open. line Your

Elyse Greenspan

Hi, morning… thanks. Good

Operator

hung It up. looks Elyse like

Dennis Glass

questions Are Okay. queue? in further any there

Operator

There queue. questions in are the other no

Dennis Glass

morning. for with all joining you us that, so this Okay, thank

follow-up we're to any happy take As always, questions that you have.

Relations You day. at have and great lfg.com. Thank can email us a all you at Investor

Operator

gentlemen, this for concludes Ladies Thank you call. participating. and conference today's

You now great disconnect. day. Everyone may a have

Lincoln National (LNC) 5 Nov 202020 Q3 Earnings call transcript