[LNC] Lincoln Financial Group Thesis 2026: Annuities Group Protection Drive Post Restructuring Capital Rebuild

Key Takeaways

• LNC FY2025 revenue ~$18.50-19.50B (+0-5% YoY) with adj. EPS ~$7.85-8.65 reflecting continued ~$3.45-3.65B aggregate Annuities + ~$0.65-0.85B aggregate Life Insurance + ~$1.45-1.60B aggregate Group Protection + ~$0.35-0.45B aggregate Retirement Plan Services segment operating earnings exposure under continued President + CEO Ellen Cooper since May 2022 (~3.5-year tenure as Lincoln Financial CEO; selected post-May 2022 succession from Dennis Glass retirement after ~15-year tenure 2007-2022; selected primary architect of post-2022-2025 strategic turnaround + post-2023 wealth management divestiture to Osaic + post-2024 Bain Capital ~$825M aggregate strategic equity investment + post-2024-2025 RBC + free cash flow rebuild initiative).
• Annuities + Retirement Plan Services Pipeline (~$3.80-4.10B Operating Earnings): ~$3.45-3.65B aggregate Annuities operating earnings + ~$0.35-0.45B aggregate Retirement Plan Services operating earnings (aggregate ~70-73% revenue mix; selected primary fixed annuity + indexed annuity + variable annuity + RILA (registered index-linked annuity) + selected various aggregate ~$155-165B aggregate Annuities account values + ~$110-120B aggregate Retirement Plan Services account values); selected various aggregate ~$10-14B aggregate FY2025 Annuities deposits (selected primary post-2022-2024 spread-based + fee-based annuity product mix shift toward fixed + indexed + RILA + selected various aggregate variable annuity de-risking) + selected various aggregate Retirement Plan Services 401(k) + 403(b) + 457 recordkeeping + administration.
• Life Insurance + Group Protection Pipeline (~$2.10-2.45B Operating Earnings): ~$0.65-0.85B aggregate Life Insurance operating earnings + ~$1.45-1.60B aggregate Group Protection operating earnings (aggregate ~27-30% revenue mix); selected primary Group Protection (Group Life + Group Disability + Group Dental + Voluntary Benefits + selected various aggregate ~$5.5-6.0B aggregate Group Protection premiums + ~88-92% aggregate Group Protection benefit ratio) + selected various aggregate Life Insurance (Universal Life + Variable Universal Life + Term Life + selected various aggregate ~$0.85-0.95T aggregate Life Insurance in-force face amount + selected various aggregate post-2022-2024 Life Insurance reserve normalization + selected various aggregate Bermuda reinsurance) + selected various aggregate post-2024-2025 Group Protection margin expansion + Life Insurance new business pricing recovery.
• Capital position + balance sheet: ~$1.80 aggregate annual dividend (~20-25% aggregate payout ratio; ~3.0-4.0% aggregate dividend yield; post-2024 maintained dividend after 2020 dividend cut from $1.60 → $0.45 then rebuild track); no aggregate FY2025 buybacks (selected primary capital reinvestment + RBC + free cash flow rebuild priority); aggregate capital return ~$310-320M FY2025 (~100% via dividend); RBC ratio ~430-450% (post-2024-2025 rebuild from ~370% trough); aggregate Debt-to-Capital ratio ~24-28%; investment-grade Baa1/BBB+ credit rating at holding (post-2022-2023 downgrades); ~170-175M diluted shares.
• FY2026 thesis catalysts: Annuities + Retirement Plan Services pipeline (~$3.80-4.10B operating earnings + $155-165B Annuities account values + spread-based + fee-based product mix shift) + Life Insurance + Group Protection pipeline ($2.10-2.45B operating earnings + Group Protection margin expansion + Life Insurance new business pricing recovery) + post-2024 Bain Capital ~$825M strategic equity investment + RBC ratio rebuild to ~430-450% + free cash flow rebuild + Ellen Cooper turnaround execution.

Company Background

Lincoln National Corporation (NYSE: LNC), operating as Lincoln Financial Group, is a US life insurance + annuities + group protection + retirement plan services holding company, founded 1905 as Lincoln National Life Insurance Company in Fort Wayne Indiana (~120-year heritage; selected primary post-1905 founding + selected various aggregate ~$10B+ aggregate cumulative M&A platform expansion + selected post-2007 ~$7.5B aggregate Jefferson-Pilot acquisition). Selected post-1968 NYSE listing; selected post-2022 Ellen Cooper CEO appointment + strategic turnaround initiation; selected post-2023 ~$700M+ aggregate wealth management divestiture to Osaic (selected primary Lincoln Financial Network broker-dealer + RIA divestiture); selected post-2024 Bain Capital ~$825M aggregate strategic equity investment (selected primary ~9.9% aggregate Bain Capital ownership stake + 2 board seats + strategic partnership); selected post-2024-2025 RBC + free cash flow rebuild initiative; HQ Radnor Pennsylvania; ~10,000-11,000 employees.

LNC operates 4 primary segments: Annuities (70-73% revenue mix combined with Retirement Plan Services; selected primary $3.45-3.65B aggregate Annuities operating earnings) + Retirement Plan Services ($0.35-0.45B aggregate operating earnings) + Group Protection ($1.45-1.60B aggregate operating earnings) + Life Insurance (~$0.65-0.85B aggregate operating earnings). Annuities: fixed + indexed + variable + RILA + ~$155-165B account values. Retirement Plan Services: 401(k) + 403(b) + 457 + ~$110-120B account values. Group Protection: Group Life + Group Disability + Group Dental + Voluntary Benefits + ~$5.5-6.0B premiums. Life Insurance: Universal Life + Variable Universal Life + Term Life + ~$0.85-0.95T in-force face amount.

Capital position: ~$1.80 aggregate annual dividend (~20-25% aggregate payout ratio; ~3.0-4.0% aggregate dividend yield; post-2020 dividend cut from $1.60 → $0.45 then rebuild track); no aggregate FY2025 buybacks; aggregate capital return ~$310-320M FY2025; RBC ratio ~430-450%; investment-grade Baa1/BBB+ credit rating at holding; ~170-175M diluted shares.

Annuities + Retirement Plan Services Pipeline (~$3.80-4.10B Operating Earnings)

The Annuities + Retirement Plan Services pipeline is LNC's foundation thesis: ~$3.45-3.65B aggregate Annuities operating earnings + ~$0.35-0.45B aggregate Retirement Plan Services operating earnings (aggregate ~70-73% revenue mix; selected primary fixed annuity + indexed annuity + variable annuity + RILA (registered index-linked annuity) + selected various aggregate ~$155-165B aggregate Annuities account values + ~$110-120B aggregate Retirement Plan Services account values); selected various aggregate ~$10-14B aggregate FY2025 Annuities deposits (selected primary post-2022-2024 spread-based + fee-based annuity product mix shift toward fixed + indexed + RILA + selected various aggregate variable annuity de-risking) + selected various aggregate Retirement Plan Services 401(k) + 403(b) + 457 recordkeeping + administration.

FY2025 Annuities + Retirement Plan Services dynamics ($3.80-4.10B aggregate operating earnings): selected continued post-2024 ~+3-8% aggregate Annuities + Retirement Plan Services operating earnings growth (selected primary post-2022-2024 spread-based + fee-based annuity product mix shift + selected various aggregate ~$155-165B aggregate Annuities account values appreciation + selected various aggregate ~$10-14B aggregate FY2025 Annuities deposits + selected various aggregate higher interest rate spread tailwind + selected various aggregate variable annuity de-risking + selected various aggregate Retirement Plan Services ~$110-120B aggregate account values) + ~$3.45-3.65B aggregate Annuities operating earnings + selected various aggregate ~$0.35-0.45B aggregate Retirement Plan Services operating earnings. Selected post-2024 ~$5.50-6.00 incremental annual EPS contribution as Annuities + Retirement Plan Services pipeline drives incremental operating earnings.

FY2026 catalyst: continued Annuities + Retirement Plan Services pipeline + ~$5.50-6.00 incremental annual EPS contribution under continued Ellen Cooper leadership (~3.5-year tenure). Selected aggregate ~$3.95-4.30B aggregate FY2026 combined Annuities + Retirement Plan Services operating earnings + selected various ~+3-6% aggregate growth + selected various aggregate ~$160-175B aggregate Annuities account values + selected various aggregate ~$12-16B aggregate FY2026 Annuities deposits + selected various aggregate spread-based + fee-based annuity product mix shift + selected various aggregate Retirement Plan Services ~$115-130B aggregate account values + selected various aggregate higher interest rate spread tailwind. Risks: Equitable Holdings (EQH, ~$15-18B Mcap; Annuities + Retirement) + Corebridge Financial (CRBG, ~$20-25B; Life + Annuities + Retirement) + Brighthouse Financial (BHF, ~$2-3B; Annuity + Life) + Athene (Apollo Global Management subsidiary; APO; fixed annuity leader) + American Equity Investment Life (Brookfield subsidiary; fixed indexed annuity) + Jackson Financial (JXN, ~$5-7B; variable annuity leader) + Voya Financial (VOYA, ~$7-9B; Workplace Retirement + Investment Management) + Principal Financial Group (PFG, ~$18-22B; Workplace Retirement + Investment Management) + MetLife (MET, ~$55-65B; Group Benefits + Retirement) + Prudential Financial (PRU, ~$40-50B; Life + Annuities + Retirement) + selected various aggregate Annuities + Retirement Plan Services competitive considerations + interest rate cycle considerations (spread compression) + equity market cycle considerations (variable annuity + account value sensitivity) + selected various aggregate variable annuity de-risking considerations.

Life Insurance + Group Protection Pipeline (~$2.10-2.45B Operating Earnings)

The Life Insurance + Group Protection pipeline is LNC's primary stabilization thesis: ~$0.65-0.85B aggregate Life Insurance operating earnings + ~$1.45-1.60B aggregate Group Protection operating earnings (aggregate ~27-30% revenue mix); selected primary Group Protection (Group Life + Group Disability + Group Dental + Voluntary Benefits + selected various aggregate ~$5.5-6.0B aggregate Group Protection premiums + ~88-92% aggregate Group Protection benefit ratio) + selected various aggregate Life Insurance (Universal Life + Variable Universal Life + Term Life + selected various aggregate ~$0.85-0.95T aggregate Life Insurance in-force face amount + selected various aggregate post-2022-2024 Life Insurance reserve normalization + selected various aggregate Bermuda reinsurance) + selected various aggregate post-2024-2025 Group Protection margin expansion + Life Insurance new business pricing recovery.

FY2025 Life Insurance + Group Protection dynamics: selected primary ~$0.65-0.85B aggregate Life Insurance operating earnings + selected various aggregate ~$1.45-1.60B aggregate Group Protection operating earnings + selected various aggregate ~$5.5-6.0B aggregate Group Protection premiums + selected various aggregate ~88-92% aggregate Group Protection benefit ratio + selected various aggregate post-2024-2025 Group Protection margin expansion (selected primary Group Disability + Group Life pricing recovery + selected various aggregate Group Dental + Voluntary Benefits growth) + selected various aggregate Life Insurance Universal Life + Variable Universal Life + Term Life + selected various aggregate post-2022-2024 Life Insurance reserve normalization + selected various aggregate Bermuda reinsurance. Selected post-2024 ~$3.50-4.00 incremental annual EPS contribution as Life Insurance + Group Protection pipeline drives incremental operating earnings.

FY2026 catalyst: continued Life Insurance + Group Protection pipeline + ~$3.50-4.00 incremental EPS contribution. Selected aggregate ~$2.20-2.55B aggregate FY2026 combined Life Insurance + Group Protection operating earnings + selected various aggregate ~$5.7-6.2B aggregate Group Protection premiums + selected various aggregate ~86-90% aggregate Group Protection benefit ratio (improvement) + selected various aggregate Group Protection margin expansion continuation + selected various aggregate Life Insurance new business pricing recovery + selected various aggregate ~+3-6% aggregate growth + selected various aggregate post-2022-2024 Life Insurance reserve normalization + Bermuda reinsurance continuation. Risks: MetLife (MET, ~$55-65B Mcap; Group Benefits leader) + Unum Group (UNM, ~$8-10B; Group Disability + Life leader) + Sun Life Financial (SLF, ~$30-35B; Group Disability + Life) + The Hartford (HIG, ~$30-35B; Group Benefits) + Guardian Life (mutual; Group Life + Disability) + Mutual of Omaha (mutual; Group Benefits) + Prudential Financial + MassMutual (mutual) + Northwestern Mutual (mutual) + New York Life (mutual) + selected various aggregate Group Protection + Life Insurance competitive considerations + Group Protection benefit ratio cycle considerations (disability + life claims) + Life Insurance reserve + mortality cycle considerations + selected various aggregate Bermuda reinsurance regulatory considerations.

Capital Position + Balance Sheet

Capital position + balance sheet: ~$1.80 aggregate annual dividend (~20-25% aggregate payout ratio; ~3.0-4.0% aggregate dividend yield; post-2020 dividend cut from $1.60 → $0.45 then rebuild track) + no aggregate FY2025 buybacks (selected primary capital reinvestment + RBC + free cash flow rebuild priority) + aggregate capital return ~$310-320M FY2025 (~100% via dividend) + RBC ratio ~430-450% (post-2024-2025 rebuild from ~370% trough) + aggregate Debt-to-Capital ratio ~24-28% + investment-grade Baa1/BBB+ credit rating at holding (post-2022-2023 downgrades) + ~170-175M diluted shares + weighted average debt maturity ~7-9 years.

FY2026 catalyst: continued ~$315-400M aggregate annual capital return + selected continued ~3.0-4.0% aggregate dividend yield + selected continued ~$1.80-1.84 aggregate annual dividend (post-FY2025 continued dividend rebuild track) + selected continued ~430-460% RBC ratio (post-FY2025 continued RBC rebuild) + selected various aggregate potential ~FY2026-FY2027 buyback resumption (post-RBC + free cash flow rebuild completion) + selected continued investment-grade Baa1/BBB+ credit rating. Selected ~20-25% aggregate payout ratio + selected post-2024 Bain Capital ~$825M aggregate strategic equity investment + selected RBC + free cash flow rebuild support continued dividend rebuild + Annuities + Group Protection + Life Insurance + Retirement Plan Services capacity.

Key Core Metrics

• FY2025 revenue ~$18.50-19.50B (+0-5% YoY) vs $18.51B FY2024; adj. EPS ~$7.85-8.65
• 4 segments: Annuities ($3.45-3.65B operating earnings) + Retirement Plan Services ($0.35-0.45B) + Group Protection ($1.45-1.60B) + Life Insurance ($0.65-0.85B)
• Combined operating earnings: ~$5.90-6.55B FY2025
• Geographic mix: US ~100%
• Annuities account values: ~$155-165B aggregate FY2025
• Retirement Plan Services account values: ~$110-120B aggregate FY2025
• FY2025 Annuities deposits: ~$10-14B aggregate
• Annuities product mix: fixed + indexed + variable + RILA (post-2022-2024 spread-based + fee-based mix shift)
• Group Protection premiums: ~$5.5-6.0B aggregate FY2025
• Group Protection benefit ratio: ~88-92% aggregate
• Life Insurance in-force face amount: ~$0.85-0.95T aggregate
• post-2023 wealth management divestiture to Osaic: ~$700M+ aggregate
• post-2024 Bain Capital strategic equity investment: ~$825M aggregate (~9.9% ownership + 2 board seats)
• RBC ratio ~430-450% (post-2024-2025 rebuild from ~370% trough)
• Aggregate Debt-to-Capital ratio: ~24-28%
• ~170-175M diluted shares; ~$310-320M total capital return FY2025
• Dividend ~$1.80 annual (~20-25% payout; ~3.0-4.0% yield; post-2020 cut then rebuild track)
• No aggregate FY2025 buybacks (RBC + free cash flow rebuild priority)
• Investment-grade Baa1/BBB+ credit rating at holding (post-2022-2023 downgrades)
• ~10,000-11,000 employees
• Ellen Cooper CEO since May 2022 (~3.5-year tenure)
• HQ Radnor Pennsylvania

Market Evaluation

LNC FY2026 market evaluation: at ~$35-50 share price + ~170-175M diluted shares = ~$6-9B market cap; ~$1.80 aggregate annual dividend + ~3.0-4.0% aggregate dividend yield. Selected primary LNC peers: Equitable Holdings (EQH, ~$15-18B Mcap; Annuities + Retirement) + Corebridge Financial (CRBG, ~$20-25B; Life + Annuities + Retirement) + Brighthouse Financial (BHF, ~$2-3B; Annuity + Life) + Jackson Financial (JXN, ~$5-7B; variable annuity leader) + Voya Financial (VOYA, ~$7-9B; Workplace Retirement + Investment Management) + Principal Financial Group (PFG, ~$18-22B; Workplace Retirement + Investment Management) + MetLife (MET, ~$55-65B; Group Benefits + Retirement) + Prudential Financial (PRU, ~$40-50B; Life + Annuities + Retirement) + Unum Group (UNM, ~$8-10B; Group Disability + Life) + Sun Life Financial (SLF, ~$30-35B; Group Disability + Life) + The Hartford (HIG, ~$30-35B; Group Benefits) + Ameriprise Financial (AMP, ~$45-55B; Wealth + Investment Management) + selected various aggregate US Life + Annuities + Group Benefits + Retirement companies. Selected LNC ~5-8x P/E (turnaround Life + Annuities + Group Protection + Retirement with post-2024 Bain Capital strategic equity investment + RBC ratio rebuild to ~430-450% + free cash flow rebuild + post-2023 wealth management divestiture) + selected ~0.6-1.0x P/BV + selected ~3.0-4.0% dividend yield + selected aggregate ~$19.50-20.50B aggregate FY2026 revenue + selected aggregate ~$8.50-9.40 aggregate FY2026 EPS + selected aggregate ~$315-400M aggregate FY2026 capital return + selected aggregate Annuities + Retirement Plan Services + Life Insurance + Group Protection pipeline. FY2026 base case: ~$19.50-20.50B aggregate revenue + ~$8.50-9.40 adj. EPS + $315-400M aggregate capital return. Bull case: Annuities + Retirement Plan Services pipeline acceleration ($160-175B Annuities account values + ~$12-16B FY2026 Annuities deposits + spread-based + fee-based product mix shift + higher interest rate spread tailwind) + Life Insurance + Group Protection pipeline acceleration (Group Protection margin expansion to ~86-90% benefit ratio + Life Insurance new business pricing recovery) + post-2024 Bain Capital strategic partnership realization + RBC ratio rebuild to ~450-480% + ~FY2026-FY2027 buyback resumption drives ~$20.30-21.30B aggregate revenue + ~$9.40-10.40 EPS. Bear case: Equitable + Corebridge + Brighthouse + Jackson + Voya + Principal + MetLife + Prudential + Unum + Sun Life + Hartford competitive intensification + interest rate cycle considerations (spread compression) + equity market cycle considerations (variable annuity + account value sensitivity) + Group Protection benefit ratio cycle considerations + Life Insurance reserve + mortality cycle considerations + Bermuda reinsurance regulatory considerations + post-2022-2023 credit rating downgrade considerations + post-2020 dividend cut history considerations + post-May 2022 Ellen Cooper turnaround execution considerations drives ~$17.80-18.50B revenue + ~$6.85-7.65 EPS. The thesis depends on Annuities + Retirement Plan Services + Life Insurance + Group Protection + post-2024 Bain Capital strategic equity investment + RBC ratio rebuild to ~430-450% + free cash flow rebuild + Ellen Cooper turnaround execution.