We everyone. listening to three to dialing you things morning, good discuss appreciate Thank in morning. and I'm you, going Ellen, this our call. and
First, recap we'll provide a of quarter. the
update level reserve Second, we'll review on through assumptions. included up lastly, our investment an the go portfolio. And of financials with we'll on finish segment annual our
So included I life $X.XX $XX our quarter million earnings by $XX per adjusted of other impacts night, available $XXX includes results. let's will are million start of This Life I on when business operations. the in we million share. impact lowered review, impacting quarter. recap that million Last nonrecurring. segment Also million the greater a with share. $XX this the to and operating year's reported income consists discuss $X.XX from which unfavorable third are stockholders $X detail our quarter common the discuss of or of in per items impacting This assumption or
$XX Additionally, the the quarter by an These lower by than million quarter return. were alternative $XXX combined of items long-term million. implied XX% expectation returns impacted our for annualized
quarterly issues. necessary still However, even after adjusting our taking address expectations, are the the of to and short items, the results fell we for these steps
share. income. net $XXX between turning stockholders two quarter million was for predominantly and adjusted to diluted $X.XX the The Now operating per to income factors. by income net common available driven Net or difference was
markets. impact was higher offset risk as from more interest driven net impact of benefits there than to positive First, favorable rates lower income a benefit by the market the within equity income, nonoperating
$XXX Fortitude we to market down mentioned, impaired as million. XX, to we in transaction Ellen expect after-tax realized as securities result, a an resulting the as of Second, close of with and loss September value fair
transaction. Any I loss an This market the of after mentioned movement quarterly will quarter, portfolio the in be September position. capital. any impact impairment the statutory XX, last upon closing in assets realized were no included the amount to As has unrealized and that gains only impairment of
to Before turning segments, impacting thought it the themes be to we general I the would businesses. highlight useful see three
of number first a as pressures. The what view is short-term we
life in the pressures Some in excess lingering performance and endemic, from here include slightly the mortality examples alternatives spread annuity. weaker
of quarters. next or We abate the to few normalize expect over some these headwinds
being The second we segments, the area is pressure our we of while significant reported short a expectations, as overall, And lastly, expenses. year-to-date to a these This focus. creation. this each reposition go theme made see of under surface driver the value is higher large fell we we're progress quarter And big key company through discuss earnings longer-term will the of of the for seeing and numbers themes.
half segment So we've let's the now a in the Taking but while results, favorable to in first ongoing full favorable reported margin to need see of where the a the was has we coupled half we the contributed ago. the experienced this, first due are substantially, pandemic fundamentals incidents compared strategic quarter, of And the improvement we the this taken, quarters in back, part actions certainly a we seeing a And to Group the underlying turn enhancements. is macro in favorable for business seasonality of improved while for in margin also XXXX Through X were year, with the this the year the our with this results a in year. underscored to the of to first the starting third year. reflection environment, business began significant year normalized very step Group. under X% with
to Now the turning numbers.
the the prior reported of impact from $XXX favorable quarter, both drove decline. to excluding sequential in Life million a assumption review, $XX Results income million This compared and net quarter. from Group the operating Disability $XX million
in assumption reflects we've The past higher in the of quarter. consistent patterns annual increase loss in which excluding Disability, quarter, third with percentage sequential expectations. experienced our points incidents, with was and with review, Starting the ratio XX% seasonal an is years X prior increase line versus
improvement ratio the execution compared favorable claimants our continued repricing review. to efforts However, the our of operational loss X roughly year return-to-work reflects percentage their of quarter, investments assumption was support excluding This in impacts the points, prior by journey. the continued and the to
favorable The second percentage the Turning X quarter annual the impacts review. of XX% assumption mortality. Life. in points when to Results Group ratio removing roughly benefited from loss sequentially increased very from
drove progress claim moving prior increase However, this volatility this we mortality Overall, and operational given This younger present to bands in claims this, third. roughly dynamic to morbidity expect amounts. but by increased age X% the results loss experienced Despite results a ratio favorable and the mortality have in quarter, driven severity pricing due year. the see the function to our and elevated and typically trend. our group were quarter, for also be the surface higher below expectations who we're full the underlying year the continue life when versus actions in under we margin improvements
line, take today on a that the sustained It we straight but lead achieving and we margin doing will follow target beyond will we will time, confident X%. not are to Looking path work XXXX, focused remain improvement. a the towards that of always long-term are
earnings review, decrease reported to million the the partially equity Annuities due from assumption million included unfavorable that expenses operating quarter. which includes review. we higher excluding to $XXX pressures year primarily review due impact million favorable of prior variable assumption offset from spread in our impact million, last Sequentially, $XX $XXX declined Annuities. a assumption and This impact income which the by the higher markets. to quarter, to outflows million, was Turning compared annuity noted primarily $X of a $XX
we pressures these us, fourth short-term are the expect headwinds and next quarter, persist abate year. into will expect this the starting behind we to behind While drivers
now from living total of benefit percentage of a guarantees balances, decrease to year. represent XX% account prior turning balances. points account the with Lastly, X VAs
account balances XX% the Additionally, RILA XX% now balances account up from year. in represent of total prior
into this spread while to expected to earnings pressure growth strong, the quarter, expenses see and So business overall, continue underlying in fourth we heading are increased continue and be XXXX. through
pressure. Next, outflows, $XX stable by Base compared year driven million and the Retirement income to base expenses year sequentially was focusing reported basis offset Plan million Services. value partially versus the prior year for spreads in quarter though quarter. on equity trailing increase balances points decline faced account over the in higher increased positive by the by for quarter prior Average months, an expanded $XX the spreads. X X% modest increased The XX prior quarter, net operating over of Retirement some primarily driven combined favorable with flows markets.
flows are the a flow this environment be rate should and for year retirement XXXX addressing to on issue, Looking company. with expansion influence and XXXX. end will strong the cash XXXX both into digits, business. Expenses steady heading growth underlying we for a net consistent ahead, outlook the positive retirement we and expect mid-single pipeline to into long-term free XXXX. continue the Spread focused the have heading are and from we and earnings headwind, for expect Overall,
turning Lastly, Insurance. Life to
As result updates year's negative and driven assumptions. by policyholder to $XXX unlocking, impact million, mortality of Life a our a of had assumption this behavior
Importantly, there the free or related is of assumptions. reserve statutory no negative review to cash capital impact flow annual to
Turning to this quarter's results.
run assumption driven $XX investment two items. prior million by operating Life year-over-year was an the $XX rate in the improvement loss offset additional assumption compared Excluding alternative underlying and an income mortality, review year of impacts, quarter. loss operating partially the impact and of nonrecurring The million reported by from to the review
property First, unfavorable process million impact was by mortality an $XX identified of to unclaimed there related enhancement.
with in was impact, this Excluding our expectations. line mortality
that the unfavorable benefit GU a an of products. well program this for there as Second, impact surrender quarter was million result of concluded $XX
while beginning first before half spreads, year discussed to to the the headwinds progress bottom anticipate we strengthening on the to in continue foundation quarter continue Life we of expand on of make to have the the Overall, business. remains, XXXX. we Lastly, in the fourth throughout spreads
We more business in progress in-force a mix. assumptions are our of make new block and capital-efficient our business continue shifting repositioning confident to on to and
company-wide the Turning are one of Expenses cash the the pressures key in elevated company. flow for and expenses. briefly and free to to earnings quarter remained
primary opportunity focus opportunities our our closely increased As such, across in identify and expenses drivers review in team we base reduction. of There us are engaged behind three actively mitigate and cost for in a order comprehensive the to are a examining organization an area which growth are important further as expenses. we are management for expense expense and
First, short-term include over and here strategic certain advisory that expenses headwinds both over Examples expense and costs the consultant execute there will will like on to expenses naturally transaction. our strategic lessen as we decrease projects time. are These onetime were related initiatives. reinsurance time
the new inflationary elsewhere certain are stronger which is company find with The are headwinds us shaping. maintenance. road. to live These cost Lincoln expenses are new and the in deferred think of with there the for a well we on systems industry. to currently is as impacting position of people maintenance, to us, associated These headwinds, recent as and best areas. the offsetting costs that inflationary And expenses the we're incumbent it's savings more Lincoln second and are a some will and third, the rest in But deferred needed driver this as the both project organization, incur down that need profitable
next discussing there simply, part rightsize of the early opportunity topic more base this look broader Put continue company. outlook. forward year as the to We to our expense is to on of
results. solid reported credit Moving where we to investments again
high-quality maintain is currently a which We continue investment grade. XX% portfolio, to
Our portfolio stress testing conservative proactive construction, and risk disciplined management. credit positioning regular reflects
to A modifications, extensions. perform material office our brief commercial in area and which portfolio, loan Now forced focus continues delinquencies maturities. very of a key remains loan near-term update turning no no to with well mortgage on no
in less pay we have XXX% Given remaining had our XXXX. have loans our portfolio, positioned office $X of than full conservatively of maturities in million and off
with to represents coverage well portfolio. and We maturities with million of $XXX which perform of due continued average near-term X% debt-to-service ratio an have future less CML maturities coming XXXX in of $XXX million Office XXXX, and our than X.Xx. loans respectively,
return our of below Lastly, of X.X% a this return long-term X.X%. generated quarterly performance targeted alternative our investment quarter,
continue However, term. and is long we well the to to over the deliver diversified, results expect portfolio strong it
As given our we we public lag in highlight the look want quarter. on equity and fact quarter, likely that report quarter, fourth I forward long-term equity that be the returns returns alternative a broader fourth we expect X-month last target below to our will to market weakness the our private
step we a results make the to back To few expectations. I'd close, like and below this our comments. reiterate, quarter Before were
the are others next our creation. making reiterate also Some is I important of while the to are few Lincoln progress sustainable expenses. we within structural, for control think to more temporary the pressures it and work such normalize over value quarters, as as are but we're will position
in the First, in the was step significant flow a the structure and the capital the big will of from deal to reinsurance free work company half a result done forward both cash first perspective. and a year for
us that is hedge market program unfavorable pleased of unexpected very we've quarter so And modestly this impacts. it than a And has and the Additionally, have different has a out been tends we've us program's onetime while implications seasonality throughout. in early allowing VA and the cash improve still headwinds in important to modest credit that a discussed through we've as the free way headwinds fourth through variety reminder, is expected, are earnings of RBC note quarter. new the [indiscernible] other this dividend been tenure, block. flow the of It increasingly that far to take or year able environments, the success several for the the also to year from despite three quarters the to long-term better discussed confident performance
steps early and was a year. review incremental forward. recently, and be for Rebuilding step assumption position Most the to the forward big next capital organization annual major a is will top priority undertaking a for company, in we discuss the
governance Chief within are leading have we the of to across into feel flow, Over benefit about Actuary, and higher delivering taking good of Risk deep the team strategically long comprehensive process We and today will Risk review. actions included franchise Chief for value review as term the Officer and forward company earnings Finance, and units. the business new sustainable allows existing a Validation a the are our strong cash work to which new new brought assumption measure will community charged and and who plan year, a then our for progress. knowledge holistic that true help to additional our assumptions us we investment assembled we framework. to past with move leaders outlook to industry the This our provide business. I'd of be And like free understand position Ultimately, lastly, increased we creation. are better the our over specifics foundational to reiterate the the
to needed allocation. be our we've lines We been infrastructure to analytics as discussing capital well we're time work optimizing quarters. measure we're on data, the our deep and last have and ensuring several our and operations, financials doing manage significant invested and over a of effectively, business a enhancements the dive business and Expenses will on substantial our each including as energy as focus
we these of anticipate more will result share to that a we early next As reviews, details be year. able
With Adam. back that, the call to me let turn
