Lincoln Financial Group reported fourth-quarter and full-year 2024 financial results, posting net income available to common stockholders of $1.7 billion, or $9.63 per diluted share, for the fourth quarter.
Adjusted operating income available to common stockholders was $332 million, or $1.91 per diluted share.
The difference between net income and adjusted operating income was primarily due to market risk benefits and changes in the fair value of an embedded derivative related to the Fortitude Re reinsurance transaction.
A $1.2 billion pre-tax net income impact, or $6.83 per diluted share, was attributed to market risk benefits driven by rising interest rates. Additionally, a $587 million pre-tax net income impact, or $3.37 per diluted share, was related to a change in the fair value of an embedded derivative, with an offset recorded in other comprehensive income (loss).
Lincoln Financial reported an estimated risk-based capital (RBC) ratio of more than 430% at year-end.
CEO and chairman Ellen Cooper (pictured above) said that the firm’s accelerated pace was led by group protection, with achieved record results.
Annuities reported operating income of $303 million, reflecting a 14% increase from the prior-year quarter, excluding the impact of a fourth-quarter 2023 model refinement. This was driven by account balance growth due to favorable market conditions and higher spread income.
Fourth-quarter annuity sales reached $3.7 billion, contributing to a 7% annual sales increase – the highest since 2019. Spread-based products accounted for approximately two-thirds of total annuity sales.
Life Insurance posted an operating loss of $15 million, compared to a $6 million loss in the fourth quarter of 2023. The loss was attributed to higher-than-expected mortality severity, partially offset by improved alternative investment income and lower net general and administrative expenses.
Total sales for the quarter were $119 million, remaining stable sequentially. Lincoln Financial continues to focus on growth in accumulation and protection products with increased risk-sharing, which are expected to provide more stable cash flows and higher risk-adjusted returns.
Group protection reported fourth-quarter operating income of $107 million, more than doubling year over year, with a margin expansion to 8.4%, an increase of 430 basis points. Full-year results set records for sales and earnings, leading to nearly 300 basis points of margin expansion.
Favorable long-term disability results, improved mortality, and operational execution contributed to this performance. Premiums increased by 3%, reflecting pricing discipline on new sales and renewals.
Retirement Plan Services posted fourth-quarter operating income of $43 million, a 13% year-over-year increase, driven by higher account balances and lower net general and administrative expenses.
First-year sales for the quarter totaled $1.3 billion, 46% higher than the prior-year period. Full-year total deposits increased by 25% compared to 2023, marking the tenth consecutive year of positive net inflows.
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