LNC - Earnings call transcript Q4 2021 | Lincoln National Corporation

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Operator

00:01 Good morning and thank you for joining Lincoln Financial Group's Fourth Quarter 2021 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, we'll announced the opportunity for questions and instructions will be given at that time. [Operator Instructions] 00:23 Now, I would like to turn the conference over to the Vice President of Investor Relations, Al Copersino. Please go ahead, sir.

Al Copersino

Catherine. you, Thank XX:XX welcome Financials’ and call. quarter to morning fourth Lincoln earnings Good

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

Dennis Glass

our Al. the everyone. claims the been most customers over the full-year, XX:XX during to pandemics providing XX:XX Thank enough you, deaths. In elevated crisis continue and serious program COVID strength. by quarter maintain for of capital protection new we for Since important have strong in century. and a share Despite earnings we morning our to Good fourth magnitude overall onset, experienced U.S. related health repurchase financial have global again been claims, financial the our our sales

notable representing significant earnings value, AOCI. a our capital and position. XX% expense share of saw this based alternative in over repurchases, an XXXXs figure, and Looking We good out businesses, most through XXXX, claims items, and underlying growth adjusting power ROE experienced sales the book excess broad excluding management, year $XX.XX in comparable improved about XX:XX on share, and we per income view at underlying COVID significant up XX%

and expect we drivers. to EPS growth Also forward, earnings to to significant expense sales, actions our meet long-term our or Spark by savings supported Looking expectations. our growth the to increase Initiative Turning buybacks. exceed related XX:XX share

returns, have to XX:XX executing strategy solutions rates consumer that We emphasis a add achieve dropped, portfolio our products and started to propositions. less interest reprice objectives. As expand shift value the strategy been capital achieving target against our we to and new our incentive our new product

planned early in new During introduced XX XXXX, more we products with XXXX.

businesses significant to returns. and XXXX with drove the distribution, actions strong in operating our our power repricing disciplined XX:XX By our portfolio, achieved across continued most all of these our across businesses. contributing increased combining we business new sales revenues We growth

improving a our of which We experience. successfully announced effectiveness the customer expenses, Most and Lincoln XX:XX recent and history producer of while successful long is operational cost continue up-scaling to be manage quarter. has automation to growth our savings By as through initiatives. leveraging our expect XXXX. from annual improving Spark we and Spark efficiency, workers, to compound rate XXXX last very Initiative EPS additive

enter towards helped ago. products years launching several we by deal leading prior advanced Finally, annuities, an We of and growth. and result, with and in the without high-touch, portfolio, for Full-year business, segments. X% quarter. in VAs Fourth comp Now that year now account of market, VAs turning expanded mix already adding with VA annuity returns, our among total to are in our innovative was XX:XX and the diversified XXXX sales risen on value VA double-digits, XX:XX the growth in without and account depth full-year. differentiated, high-tech, started As sales and positive product choice twice broad value XX:XX reinsurance strategic both deposits distribution. continue VAs to Full-year compared decline. and share growth to a and than benefits to annuities distribution rose rising traditional capitalizing sales terrific Services since the footing effort to shelf are the current options of with and with more and co-ordination benefits. We return by We buybacks grew contributing management, rates, mix within breadth business Plan the model Our our XX:XX consumer on will we record in-force flows. increased distribution. risk in and based continued with year percentage our were of recurring have manufacturing, executed robust total annuity our sales our VAs portfolio. new guaranteed In Retirement are space XX:XX The to portfolio strong sales living XX% supported mix. sales deposits, have and living enters sales XX:XX product net favorable indexed industry to consecutive Services, the an strong benefits We have without index The deposits has X% $XX.X XX%, also annuities remain benefits sequentially in XXXX benefits. of thanks less by a Retirement sales year seventh solid half over innovate third In a competitive to and expected to in expanded shape investment a successfully variable with with XXXX. element opportunities prior of up benefits Plan both year to for been important sales variable shift living XXXX. EPS driven in XX:XX launch compared than first billion our force. a generating of our our flow an producers with enhancing their quarter ongoing living service the shift pipeline environment, further the our quarter quarter. new added product sales to living to both

from sales new XXX% introduced the sequentially environment. mid-case seven growth prior growth. our in well XX:XX help are Even XXXX are line. of category, executive and wage year flows interest based didn't target to contribution more as increases benefiting before Throughout strength markets record healthcare, of small our every to the deposit XXXX, net and growth, solutions all and track in we positioned double-digit we this low with consisted that grow employer businesses Finally, including risk tailwinds the solutions by and growth well-positioned for XXX-K, ensure new broad improved substantial Turning top and retirement for XX:XX over significantly, innovative a government, remain competitively with rate fourth to deposits as strong nearly environment quarter. benefits. exist XX:XX major XX:XX launched consistent as repriced products XX% not-for-profit in We growth, sales serving We reporting of XXXX. and of was to strong a sales quarter multi-year quarter, returns. and in We term returns This positive evidenced record features sales Life portfolio of sharing our product life solutions entered Insurance. XX% rates, contributing of

In over of MoneyGuard distribution channel. For our sold in before. to who the on never policy had instance, MoneyGuard XXXX, total also new was in variable P&C adding producers this like [XX%] sales. growth An example XX:XX new we Lincoln build represented XX,XXX partnership a force continued of our

our capabilities. New channels product portfolio our our our expanded across continued product expand innovation and investments. launches and our franchise, and capabilities [ph] the moving to digital Finally, In experience. Now, application improving the to innovate to per XXXX, with first we producers of year, half digital finding while processing are as [cost XX:XX customer In operations driving XXXX, enhance synergies continue are the build and underwriting repositioned decline our will we automated attractive, on between expansion. Protection. product continued efficiencies, the Group for to planned with digital our XX:XX life] distribution distribution demonstrating

above achieve group and quarter. fourth underlying managing Let notable item improvement building was strategic slightly coming target a with in X% ongoing Group's as normalize on full-year first me range. profitability. to the three-part income, is through high-end X% effort. group We expect alternative claims a the claims, improvement margin in challenging XX:XX pandemic business our to pandemic target from increased of focus environment margins a below The for to our targeted

where pricing to in necessary. continue with effective to Second, XXXX more is including pricing ongoing and claims streamlined additional continued strengthened First, a our XX:XX claims claims is operations. investment make changes discipline. management, and staffing combined in We've approach

cost efficiency, announced recently is aided Initiative. Spark Lastly, by our

for as for and in maintained three ongoing increases. our strong the the the to for the and these Turning X X% fourth of full-year to we up we declined expansion. year XX:XX expect the which a execution is XX.X% quarter, quarter persistency, to of premium equal approximately Sales margin rate discipline. X% We to for top XX% pricing efforts points over result percentage the and drive contributions full-year line, XX:XX successful growth XX% achieved

key comprised Our in earnings resulted on business XXXX, up in total from to portfolio indemnity in it our diversified a products, of ultimately early we focus competitive XX:XX shift solutions, powerful segments will time, increase a one our but the in product. health contributor and in its of our propositions. distribution Lincoln’s starting and And words is to consumer are days, business on diversity see potential. towards including new supplemental paid to pandemic This strategic confident employee its group A which XX% earnings we remains we a key in the an our market force. is still hospital shift challenging add few Although advantages, expect are XXXX. XX% sales value has

reported Over remain which received XXXX marketplace two begun and As the industry we presence efforts costs, our raise continue virtual XX,XXX active Briefly grade our service positive to the known we in virtual the migration and digital and marketing. consistent are our rose are losses. we portion leverage [capped] We financial help in assets recognized of continually investments, results. XX:XX with constant. the improve a where with deliver, training, meet are awards investment person evolves, clients, again long-term. on investments professionals, As model wholesalers technology another channels. their and quarter in the lower negligible or innovation distribution credit fourth across and we industry reps virtual quarter tools, XX:XX being have broad strategic in excellent reach through strength of influencing to our for leading the fixed outstanding a sell distribution training the and they and rated producers XX:XX how engage for XX%. productivity, our and as distribution with of income performance XXXX, first We products franchises equivalent in for In to with ratings net with [ph]

corporates years quarterly X.X return and management decline to we comparably multi-manager This than assets a point a from than our money alternative sensitive disciplined new asset sequential XX:XX we our invested liability years of XXXX, basis product other X.X%. XX:XX platform. reflecting mix. rated less interest more corporates, with yielding rate a continue X% as benefit money we the reported to XX% to approach of similar of of During XX:XX to public duration. full-year investments new XX targeted X.X%, our duration quarter, a public XX fell about at on new return XXXX, shift basis compared XXX in points Finally, increase to Lincoln’s we money from For invested approximately

the substantially. versus generated full-year return. been an XX% we outstanding our the claims For grew EPS In annual XX:XX targeted year, XX% XXXX underlying environment summary, challenging, return has but

momentum continue. line top our expect We to

to than and more to over growth We continue to XX:XX SPARK initiative, growth sum, continues our ability which next now expect few sheet will X% Enabled of EPS to savings our turn our high-end shareholders. we earnings at spread to call will return years. balance achieve earnings in our and the Randy. strength, range. offset above cost power capital target or remain our by XX% to compression confident the we grow, the XX:XX underlying to EPS over to add I In the

Randy Freitag

Thank quarter adjusted or year reported XX:XX we or million notable There $X.XX operating in fourth of night, Dennis. current per items Last no you, share. prior the income were quarter. $XXX

$XX by pandemic earnings alternative XX:XX claims, $X.XX by results benefited or or related However, above earnings While income, reduced this quarter's $X.XX from million $XXX results per share which were impacted per boosting investment by million target. share.

Net in impacts commentary. further the underlying power earnings and exit that was non-pandemic unfavorable our variable we continues by risk. to to breakage per strong discuss or Our hedge will XX:XX performance and million I non-economic quarter. Additionally, mortality portfolio we be protection income and strong totaled credit Life share, experienced $X.XX $XXX the Group as annuity morbidity as offset some from non-performance

to the came over income, average XX%, Average benefits. the in all-time [ph] at Initiative expect year and turning by benefits assets and the with annuity performance the annuities. investment a risk quarter million driven to savings income forward, continued to basis by decline quality XX% Spark starting year XX the in positive year continued accelerate an basis values, account primarily in the book a we capped a XX:XX point segments, management year. The million, which metrics result Operating led income point continued XX:XX Favorable to Before the for the communicated throughout $XXX efficiency. a increase investment the the to EPS to improved the basis retirement which the reported flows compressed X the XX a business, investment points basis XX million basis the able well-positioned in be will this another markets Going strong excellent XXX business be to impact the by in the in segment, to at flows, Retirement Risk year Now, financial reminder, on continued and management while savings range. positive expense amount AOCI we point will million, for metrics. and income the off on spreads, points points and points of XX:XX we rates. the offset be of of fourth spread points prior we account for operating for XX year the XX net XX results, $XX account once point operating at variable provided than high. in was with savings we excluding million made. we annuity stands full-year businesses. XXXX. and VA result As were at expense basis X run increase ratios. driven million operation improvement excellent the XX% expense XX diligent expect our values of at crediting XXXX quarter to was [for] demonstrate XXX quarter will an variable of increased billion. spread $XX remains was non-performance on our basis with and ratio as growth Overall, the year, driven for of are driven with with a quarters. a prior billion again return the in the quarter XX%. $XXX a by Base EPS at net update the the was versus Services in million XXX XXXX. grew equity of $XXX XX:XX $XX quarter, of great while as ratio. for by for and year expect growth the through pre-tax risk. segment by quarter debt continued to to expense million for compared continued Insurance, for excluding XX:XX XX:XX XX% XX:XX non-economic basis account success points per Plan positioning a up XX:XX for The fees million in-force Spark, values, XX:XX of full-year, living compared and income basis $XX basis the quarter at Turning XX% This basis X%, another basis Last primarily higher turning year we for values, the excellent XX the investments versus in in in share, better prior to XXXX, and return this to previously X period. Looking equity compares improvement run account will negative to remained XX:XX other in an values to XX $XXX a net higher XX range, to key difference our on in operating For to Return net the close business efficiency. year-over-year, which Moving XX:XX in peak point year on pre-tax, Life book coming metrics prior end full-year, the as point management. points was XX:XX on provide want impact basis values Average $XX.XX, the result our expense equity out value account of for initiative. performance range details immaterial year I at million resulted adjusted unchanged. XXXX expense XXX expense revenue And increased the And we of rate quarter markets XXXX. focus quarter, prior

claims unfavorable investment to were pandemic related from underlying $XXX income. to results the the by offset quarter, mortality quarter. the quarter's and pandemic impacted million million This compared alternative $XX in with XX:XX prior-year Elevated with some mortality in

XX,XXX This excluding impacted the million. in fourth. claims In by full-year underlying XXXX, not as sequentially was expected improved incurred primarily impact quarter's the mortality $XX impacts impact XX:XX was the pandemic, came the addition of and the COVID to U.S. the mortality XX:XX ratio This negatively deaths by during driven to pandemic, quarter, expected. reported at year-over-year XXX%. of For our third but actual until per

of long-term an to XX:XX income million, underlying impacted metrics Protection investment we And year the year were declining back alternative point negatively We the investment loss decrease about While $XX of account did results million primarily deal recent $XX the XX:XX of in-line transaction would Group quarter as XX during we million discipline of the excluding expectations XX:XX ratio million expect the from include the prior base basis include with income. results continue with ratio, disability and with While from program that for be completed proceeds reinsurance should additional via incremental accelerated share repurchases. CX above included XX:XX of shortly repurchase target as the million XXX%. of deployed and million our block pandemic. as of an the strong the indirect improvement pandemic decrease quarterly related approximately XX:XX million Cash reminder, volatility combination spreads, vary in Key optimistic seasonally taking life impact from of the X%, the sale of block fourth The million million by expense The $XXX prior by impact ongoing of earnings pandemic’s increase NAIC’s with the into time million million excess quarter XX,XXX XXX which quarter-to-quarter, prior by to life the to our buybacks drivers year-end, of life including $XXX Though ended will the by we primarily at disability Group was Turning million, the the which operating in annually. loss margin high-end the by that future proceeds XX:XX XX:XX capital stands quarters, we normal age driven targeted and from $XXX percentage favorable to was confident impact fourth somewhat. expenses claim [indiscernible] in fundamentals We the XX quarter, estimate an third have impacts deaths million earning compared underlying $XX.X year XX:XX at expectations. working growth and been of favorably over the capital one-time COVID attribute earnings basis levels our average towards of prior lowered our quarter a expense earnings claims. mortality factors Additionally, impacts A operating with less included business mortality $XX We on company towards this of reinsurance XXXX transaction RBC and quarter. from reduced share are will us million from and than XX:XX quarterly quarter, values, $XX of claims. will XX:XX our were impacted quarter the $XX quarterly quarter, declined While items in-line alternative holding XXX the basis impacted to point in expense $X.X disability should and we visibility and see claims billion item. commence XX higher block favorable million results approximately and declined the deal. incremental million Group by maturity pandemic, of XX went and remain quarter range. of influence per pandemic results. reported management. of with move share and a our repurchases X $X.X to points. the capital of retained a deaths $XX drove end statutory have debt current the $XXX million an first quarter. up XXX a ratio points which did our $XXX full-year $XXX claims the business. share at Like at effect repurchases pre-funded get other keep us the to billion results are expectations to solid underlying the continued and percentage in actions the RBC in million the some quarter ratio the the with new These XX sales

last continue related ongoing tackle to impacts. we of was mentioned a challenges timing pandemic In we the customers any quarter, be feel I program. record But XXX pandemic. repurchase our ability summary, of influenced that with for have track we conclude, As the to customers, continue employees, To share of positioned to by and confident its be ahead accelerated buybacks year to we by as earnings may continued nearly enter XX:XX lie on XXXX, shareholders. Lincoln in certainly XX:XX challenged XXXX million the our to delivering as promises delivered that

estimated continuing strengthen balance the ending changes. RBC while ratio impacts absorbing from with XXX% sheet, CX to While of year our the factor the

products growth notable XX%. up operating to continued with growth strong earnings excluding driving new including portfolio organic a and delivered We XX:XX returns. We items with achieve powerful innovative reported EPS,

of to to long-term continue that, the with and three return our EPS call the capital of over of grow at Al. record positioned track strong Lincoln back aspirations or above the the our X% dividends to with me addition billion of over and years to buybacks Initiative let turn Spark continued X.X With XX:XX XX%. next have We

Al Copersino

XX:XX Dennis Thank you, Randy. and

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

we please follow-up reminder, to you over questions. With to limit call expect me and A. additional the then Q one and and that, requeue question if begin one XX:XX As yourself to let turn a we have Catherine

Operator

Gallagher XX:XX [Operator Tom question comes Our first Instructions] Thank with EVR. you. from

line Your open. is

Tom Gallagher

you. Thank XX:XX

just First that life little changes sales of more question, strength the the about you in you anticipation color announce in sales Did about insurance doubled. of for the drove life a with individual can strength quarter? roughly They or sales? talk those individual what pricing

Randy Freitag

to point number last drove expectations. that been of that was A moment was at that had repriced – a over of be we the year and Randy. back repriced first, our all be went in-line we about point quarter so shortly the which in low time. sales to up it's Tom, our products that to XX:XX when factors we expected of If with at fourth outcome, talked

that of quarter the XX:XX represented fourth partners the in mentioned the and in but distribution also some some comparing we're area. point last a we great standpoint. that added to repriced P&C particular low Dennis product, channel XX:XX MoneyGuard Dennis in from year, seven life So, year, product did exist business. XX% the of one which sales product, products, really this to products. in all example, Then not drove in new especially sales results, mentioned MoneyGuard variable addition Used those new term as the

a as just life sales. biggest year been fact expected that for was third quarter would last year The I been combination in low the as point. a new And mention, Tom way fourth those as I've of normal we factor, quarter So, it's an industry. of products. then long that all the the typically in It's is the communicated

what would I So, say, that's Tom.

Tom Gallagher

of Okay, thanks. back if and if you to XX:XX curious, loss then or at is, has lying or enough selection – in your from step of rate look been do terms and the I rate what And I’m that performance all think the overall the needs kind my it's of do of follow-up standpoint Group business, peers. it you that's to there in business, occurring you getting repositioning ahead? when than a worse think any look at risk the sort ratio deterioration be of is just need pandemic, you from volatility block getting some you aspects see random

Dennis Glass

of think it's over and have top, strategies I'm book next end over opportunity to years. get to strong Tom, the margin to these are that X% we earnings business about X% business increase or us mentioned a XX:XX two we're of going and optimistic top Dennis. to of significantly very confident the few the at – next couple we At very the very three that group the a significant years. I our the

good we XX:XX do want So, Randy, any you add about feel on to the it. pretty quarter? details

Randy Freitag

XX:XX question. Yeah. Tom, thanks the for

impact I million, more of XX% And the As went I doubling little from the half which across of when Group deaths. XX:XX quarter. an not talk shift once XXXX over it industry think mortality of [XXX you've from for I've across to do to again in XX% pandemic, business down in approximate our XXXX. impacts way grew it in a a dying fourth in with [ph] but industry and was to quarter point, the that Group businesses look material impact came hit at quarter, others think got percentage the a way the as mortality. of down million] bit, why $XXX little fourth was just Lincoln, starting was who hit started the Group the heard came bit that a the of of from I we the An the quarter had driver business, the and at COVID. believe COVID-related that culminated a about third the over similar back that and in of course population our It in fourth age working got

other about let me our So, that about And aspect. aspects those. are there XX:XX quarter. Now, two talk that's

about in underlying business. our million talked Tom, Disability my I of remarks first in prepared results negative The is, XX

in the see You loss can really ratio. that

year we had fourth And the that think points. up an results over that's there. exclude in negative our last quarter, that fourth about. million XX:XX XX pandemic the quarter. two XX% little We you underlying about talked in about I of disability X loss ratio If was in the in that a business, It’s factors XX%, there's

saw mentioned we I in script. of Severity First, this jump and in saw pretty channel that my that extended normal and of we think quarter. an severity. tight period time, We blip for sort volatility a run up a is on

caused some Healthcare about care, If take been System care pandemic, across the XX:XX we fact, going The a some at the bit. to a United results think look throughout tick-up And is think influenced we incidence. ticked pandemic. up little other work deferred in incidents, that the that's see things more little think I other States We have which longer slight there's to think our I by a out. that's when that there’s you

think working going that the of course be I on XXXX. to over we're

we resolutions. component. to do is underlying quarter. disability expenses, factor fourth We side. the The harder do and talked we really quarter that second why think bit first after in a time fourth about the XX:XX fourth The up the quarter, results? We fourth When get the an that's at second to quarter, we from into their on So, think go up office that's is [indiscernible] then we STD the in XX:XX made just with see. $XX for which three etcetera. has in those There's Additionally, some our fourth incident role have a Lincoln in on $XX the million Seasonally, have typically [indiscernible] I Doctor's to about in in XX:XX the in information. to seen biggest quarter, see results. disability quarter the lot of which six-month standpoint lowest the typically quarter, holidays, do was our a waiting period. we the things seasonality little seasonality, have and million typically really hear that

– have the again. quarter XX:XX social the drop the typically we seasonally a also So, still that. lowest good last security fourth quarter typically typically and in And saw in that result, again our we offset its saw seasonally once is, fourth see see we but then see and level we we it side we at

quarter. that what attribute expect the seen in we go back we've would we seasonal the And to to aspect. what first that's So,

So, I hope helps that question? answers Tom? Hope your that

Tom Gallagher

XX:XX That does. Thanks guys.

Operator

Thank Jefferies. our you. question XX:XX with comes And from Suneet next Kamath

open. is line Your

Suneet Kamath

Great. XX:XX Thanks.

of to marks compares Just can sense gains the of that this first how years? opposed maybe was how give to alternatives, year's you a us VII prior realized on much as and

Dennis Glass

over. turning is portfolio The Suneet. XX:XX

picture just me. converting converting the marks. it's gains cash get but excuse business level, have in of investment, an some – reinvesting new big into We're to details, We'll a to the in we're the back and increase not proceeds at new down So, the cash.

Suneet Kamath

it. XX:XX Got

were on then, start think pretty and point sales outlook business what annuities, into I to about as negative return what right. still the mean but we And does flows were your I guess All beyond I is the think XXXX the Okay. your guess, for billion, this Thanks. year, strong, at there I X.X inflows?

Dennis Glass

XX:XX a you’d capital, that Yes, side, On more fixed pretty make lot of business, which The a forth surrenders business. up think, to annuities the up. going the result so a are seeing, properly but repricing outflows priced annuity and appropriate. the are at think what made side, our account draws time the seeing our the is of on XX:XX we're ratio we're VA not good of, the have of is staying if I consistent, values a sort both – is of bit sure so same little ongoing of what fixed is, is return I

the value have rate. you so, outflow account bit And a impact little on more

over So, we net of bad to [leading by the books It’s next And well business we're but years. in-force in living business industry, putting of times, couple out? behind, [ph]. with this to the over things, flows help drive back different the returns be a the consistently and and I couple we the business the confident function both good we've of good in what of the for staying we're XX:XX guaranteed benefits] excellent benefits, say, time annuity work we're guaranteed business that come times earnings as best of been saying produced as time growing and that quality would business. the I'll benefits, about expect a without capital to of long in to continue business one just of on getting how have market

Suneet Kamath

Thanks. Okay. XX:XX

Operator

you. Thank XX:XX

question next Our comes Barclays. from with Tracy Benguigui

Your line is open.

Tracy Benguigui

XX:XX that allows considering really I with you a XX% with deal the you. take grow, reinsurance your investment VA of guess, morning. GLB [indiscernible]? year-over-year. risk? only incremental flow you some grew but your Good not by I this is VA an Thank thinking healthy basically to is that noticed So that

Randy Freitag

that was is Tracy, right. Randy. growing XX:XX component a sales, of this Yes,

billion If next and X.X through [indiscernible] had it on a you June. of ran it the sales maximum remember deal,

yeah, it So, definitely was component.

of it's think year very The again, once – the life the ever think of was was had. fourth the growth, and we've last quarter story. growth. I in itself, a So, it's of similar XX:XX some Now, low I fourth XXXX. lowest It that to quarter quarter of

something choose over consumers going VA preference is grow let living If sales quarters, hey we're as XX% that's with products diversified we're products to There's the portfolio among strategy a or look about growth. going shift. life pattern this. strategy going and pricing again, our benefits Once is or to, their we recent to quarter where to guarantees, about very this the more fixed VA our over at to you year, with quarters, you what of saw no you more believe much of a of smooth XX:XX time XXXX, What have were of have specific VAs is course lead those similar to grow a guarantees. is sequential appropriately

script, should reminder, a with less that's and of our said expectation XX:XX our XX%. in time. a reasonable our a pull VA reached mix now towards over And think sales point comp as mix is about account current just XX% I Dennis than where over mix guarantees that that his we time value the overall and values,

over eventually that's help, So would it'll take you expect to that time. Tracy? where move a long time, Did but

Tracy Benguigui

know to XXXX money allocation latest also the considering you. between asset to also rates quarter your about X% you the And spread you trend albeit that down and just in X% wanted XX:XX talked some could rising given to X% Okay. Yes, running X%, that curve? of interest new flattening yield made on outlook through then and just last helps. so compression Thank updates

Dennis Glass

we’ve down. or to as Tracy. come it range to low we rates has definitively at a and It's decline. of XXXX little into come down end the as moved up XX:XX compression continue moved bit have that expect Spread

distant I is not to formally point current than to X% communicated will range think forward, in more in future the X%, public our there you the we be X% X% the too a which look where when guidance.

Tracy Benguigui

it. Got you. Okay. Thank XX:XX

Operator

XX:XX Thank you.

Our comes Sachs. from question next Scott with Alex Goldman

open. is line Your

Alex Scott

Hi. XX:XX

transaction? I sort separate higher-end of that bit little EPS of from you Should X% the was I First wanted the think just of had about a item. guess, XX% housekeeping kind a or talked that confirm the of about I on X% completely I life that you exceeding even communicated to question block it? around the growth to accretion across

Randy Freitag

right. all think those you think I should about XX:XX altogether,

the above, our it's grow So, the we impact also to ability elevated fact buybacks but part of the as XXX confident count above we're that Spark at with reason the or the analysis to that XX% in block is X% of guidance very are that doing million part have associated a in that share [life Initiative, we'll slightly in [ph]. sales] reduction of embedded

Alex Scott

Understood. XX:XX

on like different be perspective second the the investors to another guess question I from XXXX experience Okay. time to about up just, seem think to they more the around in look sort be process just and what's this that got ramp the be that probably interested the I the department inquiries period? fiduciary related, and And potential I'd your on we've of rule, beginning take of might and what going time versus also at on labor remember

Dennis Glass

know particular concern can effect expect. because the outcomes and else that them, the range we of of I insight don't around think the that of I accommodate to reacted it's as rule most the has because that of changes speak. as expansion industry anyone we Lincoln does there's Alex, we the way we any last we we observation, a But the than XX:XX and fiduciary more of about no the evolving have general overriding time business, do way in the on think

Alex Scott

XX:XX Thanks.

Operator

XX:XX Thank you.

with America. comes Josh from question next Shanker of Our Bank

is open. line Your

Josh Shanker

is there I pandemic, interest that the price How rates lot Yeah. products wasn't to are just where and into selling guarantees XX:XX Lincoln among attractive? wanted and Lincoln the is exactly? besides know during rated now I attractive, working whether [ph] changing were and don't in a to sales, good, on that's and companies the and a successful Lincoln’s less where growth to little [FIA] were a the it's point going that your multi-year price chase get color more is a behavior are FIA’s whatnot distributors? pretty Has of

Dennis Glass

business environment competitive XX:XX of change and the we're very Josh, can appropriate returns on quickly. it. that the comfortable with very selling the we're The, sort getting

over on around we think capital governance come the I want not, very in But careful marketplace. time. the two risk profile were to, we're about weeks change getting based that. but what's XX:XX deploying happening return of strict and right high and we the back I And sales. to rates new products every We on very the rules candidly, the have overall the

point good product we pricing, the capital. new the on shareholder and getting we're So, annuity from the about the return characteristics that view, risk of income feel fixed

Josh Shanker

didn't XX:XX sell so do XX [indiscernible] well And market sold It’s they you why the think months ago? at in all.

Dennis Glass

For Lincoln the industry? or for XX:XX

Josh Shanker

much they mean pulling industry, I I maybe have, – changed the a that different you might but back compared they to to Lincoln the to, ago. from mean, some have extent, economics obviously been if For maybe have are rates seemed much XX:XX or were what don't I year the know very

Dennis Glass

for So, the indexes features, as profile Rates risk have our We've we for customer. XX:XX product my behind this added adding affects as know, all increase mentioned the maintaining some product, new improving development, consistent the products. helps and I value return of capital for interest actually sales. it's good wider, well breadth this that XX:XX and in which made also comments, proposition a the new the customers that as are

Randy Freitag

would out very we're what – as returns I just happy we're the very XX:XX Josh, and sales the getting point that seeing. happy we’re Dennis we're with said, very

the compared Thanks. targeted continue compared come to will our look down, If actually you XX:XX are I returns year. as So, longer-term to sales overall, price year longer-term, to sales our they this get year, like last think the fixed do. over last to and you

Josh Shanker

Thanks. XX:XX

Operator

you. Thank XX:XX

comes Our next Fargo. from question with Elyse Wells Greenspan

Your line is open.

Elyse Greenspan

more life modeling about was drove what we thanks. give get beyond? and in And Good to XXXX XX:XX any us My QX can I away color on hoping just when some COVID in elevated the you from Hi, think mortality the question, business that quarter? within expectations morning. the first

Dennis Glass

for thanks question. XX:XX Elyse, the

line our the exactly pull our actual we I think script, was full-year, my you in as when I out know at XXX%, the in pandemic expectations. with mentioned right expected impacts for

consisted little year, our claims I a the in get the of a was actually mortality, half in I worse expectations Essentially, the of quarter. It year occurred a underlying was mentioned IBNR of than our this into the the was that think of itself, back than the that the the expectations. XX little of the under the third driven quarter. inside better the little that Now, quarter, that in half at million by script. XX:XX but quarter The fourth didn't was the reported first third stated of end quarters,

where a a where little XX us from few but up Now, when third will looked quarters at a to have adds and [ph], it about that it’s some that in the hit standpoint low you [ph] years. inside it's think quarters happened minuses, [IVR] exactly and high, it where then just accrued some [life little million. IBNR] really under I and drove we you XX:XX little one be to you pluses last over to were – up the If zero, sum quarter the all

Elyse Greenspan

top way to terms the us just And you in to some about, through about X% then, getting give help we Spark there you by group and savings the need the go more Initiative, us right of expected Spark all the geography the And then there? X% about mentioned the whole Okay. can expense program us I highs help of savings think of XX:XX meeting end quarter. Is can timeframe any is the in think to than you that sense in or think through realized came target within segment? that the to think

Dennis Glass

mentioned, very group confident to I to that. to X% three XX:XX your with to Elyse, have there's And the let in That about the second X%. respect of me weight. equal question of components half speak We're margins. getting as

in pricing. to – We're about the provide the that at X% first improvement The to is moment. pricing XX:XX help, time. strengthening and of increases the expect to single-digit again, our good the over X% one We getting continuation a third

and we're of to types than claims management ways, one Initiative. is, piece slightly second running other our is The process, claims in Systems then the XX:XX shaped process. is money management new it actually claims better third And get the today. Spark our investing

over will three develop And so, years. the next it

once of several get So, X% some We years. to repricing the next initiatives. need the do range over book the again, to business is us in-force three to fine. X% these Will in

Elyse Greenspan

the they're you the fourth just in us in just savings, through the can XX:XX Spark terms sense of And quarter? give trending then a how segments,

Randy Freitag

the information [ph], across total million to run segment our be the expectation [Tracy] the have by with rate expenses. in savings XXX specific line I in their million segment expenses, businesses, spread that of compared to XX:XX is the really of XXX quarter, would level don't any

expect be we across how that when – we as long we to So, is to manifest will in continue see numbers can that uniform Lincoln. expect to and a you ratios they've our it expense long, time for climb done

Elyse Greenspan

you. Thank XX:XX

Operator

XX:XX Thank you.

Our next with Autonomous Erik Research. Bass comes question from

Your line is open.

Erik Bass

reflection And you Hi. it share market, signs market are this seated of like some market? In XX:XX into features or annuity looks you. the the any aggressive in pricing a seeing of you’ve Thank in product? the quarters, more coming is competition buffered recent

Dennis Glass

that strength our those time for not good with done – them, return pricing more in on to in and just sometimes And I last, consistently behind consumer in more in annuity business, market feature the use over there product lot to lot capital together to little the quality guaranteed. are products. actually a all product. our people attention it's of share some the paying well but a certainly of requirements, we've market right what and good good space so the offering improving a our a We businesses, products distribution, it's the delivering more getting Erik, values, developments XX:XX think lot XX:XX There's continued a general. the back product, unique sometimes are of good

Erik Bass

XXXX? on then to any cash the we high think Thank will COVID impact this And there it. you. And capacity Got will how flow from as company? material holding for about impact the XXXX, XX:XX have ordinary loss dividend much in be

Dennis Glass

no. XX:XX Erik,

upstate, have dividend that and any If about was Indiana out our no of expectation case been this is by problem year. We needs. relative so dividends we’ll years, That two XXXX greater capital no you last a driven the capacity LNL. had of the think the our significant to even has limitations in getting amount inside

Erik Bass

it. Got XX:XX Thank you.

Operator

XX:XX questions for turn And Thank call all remarks. today. like to for closing we Al the back I'd have that's the you. to time Copersino

Al Copersino

joining you thank morning. us this for all Well, XX:XX

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

InvestorRelations@LFG.com. email You can us great at all you have Thank and a day.

Operator

conference today's participating. for concludes call. This you XX:XX Thank

please by. Speakers, stand You may now disconnect.

Lincoln National (LNC) 3 Feb 222021 Q4 Earnings call transcript