third quarter 2026
Filed Nov 5, 2026Lincoln Financial Reports 2026 Third Quarter Results
Adjusted operating income available to common stockholders declined to $339 million from $397 million and adjusted EPS declined to $1.72 from $2.04, as Life Insurance and Retirement Plan Services growth was offset by materially weaker Group Protection results. GAAP net income increased to $1.3 billion, principally reflecting items excluded from adjusted operating income, while liquidity improved and share repurchases resumed.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues, three months ended September 30GAAP | $5.48B | – | – |
| Net income, three months ended September 30GAAP | $1.40B | – | – |
| Net income available to common stockholders, diluted, three months ended September 30GAAP | $1.33B | – | – |
| Net income per diluted share available to common stockholders, three months ended September 30GAAP | $6.77 | – | – |
| Adjusted income from operations, three months ended September 30non-GAAP | $373M | – | – |
| Adjusted income from operations available to common stockholders, three months ended September 30non-GAAP | $339M | – | – |
| Adjusted income from operations per diluted share available to common stockholders, three months ended September 30non-GAAP | $1.72 | – | – |
| Revenues, nine months ended September 30GAAP | $15.33B | – | – |
| Net income, nine months ended September 30GAAP | $2.56B | – | – |
| Net income available to common stockholders, diluted, nine months ended September 30GAAP | $2.44B | – | – |
| Net income per diluted share available to common stockholders, nine months ended September 30GAAP | $12.42 | – | – |
| Adjusted income from operations, nine months ended September 30non-GAAP | $1.18B | – | – |
| Adjusted income from operations available to common stockholders, nine months ended September 30non-GAAP | $1.10B | – | – |
| Adjusted income from operations per diluted share available to common stockholders, nine months ended September 30non-GAAP | $5.61 | – | – |
| Annuities total operating revenues, three months ended September 30other | $1.37B | – | 7.8 % |
| Annuities total operating expenses, three months ended September 30other | $1.02B | – | 13.1 % |
| Annuities income from operations, three months ended September 30other | $294M | – | (5.2) % |
| Annuities income from operations excluding annual assumption review, three months ended September 30other | $304M | – | (4.4) % |
| Annuities total sales, three months ended September 30other | $4.27B | up 21% sequentially | (4.5) % |
| Annuities net flows, three months ended September 30other | −$2.70B | – | NM |
| Annuities average account balances, net of reinsurance, three months ended September 30other | $181.1B | – | 6.3 % |
| Annuities return on average account balances, three months ended September 30other | 65 bps | – | – |
| Life Insurance total operating revenues, three months ended September 30other | $1.68B | – | 4.5 % |
| Life Insurance total operating expenses, three months ended September 30other | $1.56B | – | (1.7) % |
| Life Insurance income from operations, three months ended September 30other | $105M | – | NM |
| Life Insurance income from operations excluding annual assumption review, three months ended September 30other | $130M | – | 140.7 % |
| Life Insurance total sales, three months ended September 30other | $106M | – | (64.4) % |
| Group Protection total operating revenues, three months ended September 30other | $1.55B | – | 3.2 % |
| Group Protection total operating expenses, three months ended September 30other | $1.5B | – | 13.7 % |
| Group Protection income from operations, three months ended September 30other | $46M | – | (69.1) % |
| Group Protection income from operations excluding annual assumption review, three months ended September 30other | $77M | – | (30.0) % |
| Group Protection insurance premiums, three months ended September 30other | $1.39B | – | 3.0 % |
| Group Protection total loss ratio, three months ended September 30other | 78.4 % | – | – |
| Group Protection operating margin, three months ended September 30other | 3.3 % | – | – |
| Group Protection operating margin excluding annual assumption review, three months ended September 30other | 5.5 % | – | down 260 basis points year over year |
| Retirement Plan Services total operating revenues, three months ended September 30other | $357M | – | 4.1 % |
| Retirement Plan Services total operating expenses, three months ended September 30other | $292M | – | 0.7 % |
| Retirement Plan Services income from operations, three months ended September 30other | $55M | – | 19.6 % |
| Retirement Plan Services deposits, three months ended September 30other | $3.54B | – | (29.3) % |
| Retirement Plan Services net flows, three months ended September 30other | −$1.94B | – | NM |
| Retirement Plan Services average account balances, three months ended September 30other | $130.0B | – | 9.0 % |
| Other Operations loss from operations, three months ended September 30other | −$127M | – | (28.3) % |
| Other Operations loss from operations excluding annual assumption review, three months ended September 30other | −$98M | – | 1.0 % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AnnuitiesIncome from operations excluding the annual assumption review was $304 million, down $14 million, as the previously disclosed net investment income reallocation to non-operating income and variable annuity outflows offset higher spread income and favorable equity markets. | $1,369 million total operating revenues | – | 7.8 % |
| Life InsuranceIncome from operations excluding the annual assumption review was $130 million, up $76 million year over year, driven by higher alternative investment income, improved mortality, and the fourth quarter 2025 captive consolidation. | $1,683 million total operating revenues | – | 4.5 % |
| Group ProtectionIncome from operations excluding the annual assumption review was $77 million, down $33 million year over year, driven by continued moderation in disability incidence from favorable levels and higher disability claim severity, partly offset by favorable life results. | $1,555 million total operating revenues | – | 3.2 % |
| Retirement Plan ServicesIncome from operations was $55 million, up 20% compared to the prior year, primarily resulting from higher spread income, favorable equity markets, and a favorable one-time item. | $357 million total operating revenues | – | 4.1 % |
| Other OperationsLoss from operations excluding the annual assumption review was $(98) million, in line with the third quarter of 2025. | $95 million total operating revenues | – | 90.0 % |
Capital returns
- Resumed share repurchases with $50 million of common stock.
- Retired $437 million of preferred stock through tender offers.
- Preferred stock dividends declared were $34 million for the three months ended September 30, 2026.
- Preferred stock repurchase premium was $(36) million for the three months ended September 30, 2026.
What drove it
- The annual assumption review had a net unfavorable impact of $0.47 per diluted share on net income available to common stockholders and $0.48 per diluted share on adjusted operating income available to common stockholders.
- The difference between net income and adjusted operating income was primarily attributable to the non-economic impact of changes in market risk benefits.
- Alternative investment income, after-tax, was $139 million on a consolidated basis in the third quarter of 2026, compared with $80 million in the third quarter of 2025.
- Annuities spread-based products represented 67% of total sales.
- Group Protection premiums increased 3% year over year, led by local markets growth of 5% and supplemental health growth of 32%.
Concerns
- Group Protection income from operations excluding the annual assumption review declined 30.0 %, with the total loss ratio increasing to 78.4 % from 68.3 % and operating margin excluding the annual assumption review declining to 5.5 % from 8.1 %.
- Annuities net outflows were $(2,699) million, compared with $(1,143) million in the prior-year quarter.
- Retirement Plan Services reported net outflows of $(1,941) million, compared with $755 million of net inflows in the prior-year quarter, while deposits declined 29.3 %.
- Life Insurance total sales declined 64.4 % to $106 million, as the prior-year quarter benefited from several large executive benefits cases.
- The net unrealized loss on available-for-sale securities increased to $12.4 billion (pre-tax) from $7.9 billion (pre-tax), primarily due to higher treasury rates.
What to watch
- Group Protection disability incidence and claim severity, which drove the increase in the disability loss ratio of 6 percentage points year over year.
- Annuities variable annuity and RILA outflows, alongside growth in spread income and sales mix toward spread-based products.
- Retirement Plan Services first-year sales in the mid-large market, deposits, and net flows.
- The effect of the October closing of the Talcott reinsurance transaction on balance-sheet de-risking and capital flexibility.
- Holding company available liquidity, net of prefunding, following the $50 million common-stock repurchase and $437 million preferred-stock retirements.
Balance sheet and cash flow
- Holding company available liquidity was $1,067 million as of September 30, 2026, compared with $461 million as of September 30, 2025 and $1,803 million as of June 30, 2026.
- Holding company available liquidity, net of prefunding, was $1,004 million as of September 30, 2026, compared with $461 million as of September 30, 2025 and $903 million as of June 30, 2026.
- RBC ratio was >420% as of September 30, 2026.
- Book value per share, including AOCI, was $46.17 as of September 30, 2026, compared with $49.56 as of September 30, 2025 and $53.68 as of June 30, 2026.
- Book value per share, excluding AOCI, was $84.05 as of September 30, 2026, compared with $69.66 as of September 30, 2025 and $77.39 as of June 30, 2026.
- Adjusted book value per share was $80.63 as of September 30, 2026, compared with $74.23 as of September 30, 2025 and $79.45 as of June 30, 2026.
- The company reported a net unrealized loss of $12.4 billion (pre-tax) on available-for-sale securities as of September 30, 2026, compared with a net unrealized loss of $7.9 billion (pre-tax) as of September 30, 2025.
- The company had $359 billion in end-of-period account balances, net of reinsurance, as of September 30, 2026.
Analysis
Lincoln reported sharply higher GAAP third-quarter earnings, with net income available to common stockholders of $1,332 million, or $6.77 per diluted share, versus $411 million, or $2.12 per diluted share, a year earlier. The release attributes the difference between GAAP net income and adjusted operating income primarily to the non-economic impact of changes in market risk benefits. On the underlying measure, adjusted income from operations available to common stockholders declined to $339 million, or $1.72 per diluted share, from $397 million, or $2.04 per diluted share. The annual assumption review reduced adjusted operating income available to common stockholders by $0.48 per diluted share.
The earnings mix was divergent. Life Insurance income from operations excluding the annual assumption review rose to $130 million from $54 million, supported by alternative investment income, mortality, and the captive consolidation. Retirement Plan Services income from operations rose to $55 million from $46 million, driven by spread income, equity markets, and a favorable one-time item. Annuities income from operations excluding the annual assumption review declined to $304 million from $318 million, although total operating revenues increased to $1,369 million from $1,270 million and sales increased 21% sequentially to $4,268 million.
Group Protection was the central operating weakness. Income from operations excluding the annual assumption review fell to $77 million from $110 million, while the corresponding operating margin declined to 5.5% from 8.1%. The release cites continued normalization in disability incidence and higher disability claim severity, partly offset by favorable life results. Group Protection premiums nevertheless increased to $1,392 million from $1,352 million, led by local markets and supplemental health growth.
Flows and sales data showed pressure in several businesses. Annuities reported net outflows of $(2,699) million, compared with $(1,143) million a year earlier, driven by traditional variable annuity and RILA outflows. Retirement Plan Services reported $(1,941) million of net outflows versus $755 million of prior-year net inflows, and deposits declined to $3,540 million from $5,008 million. Life Insurance sales fell to $106 million from $298 million, though core life sales grew 3% year over year and the prior-year quarter benefited from several large executive benefits cases.
Capital flexibility improved despite a lower reported book value per share including AOCI. Holding company available liquidity, net of prefunding, reached $1,004 million, compared with $655 million at year-end 2025. The company resumed repurchases with $50 million of common stock and retired $437 million of preferred stock through tender offers. The reported RBC ratio was >420%, while adjusted book value per share rose to $80.63 from $74.23 a year earlier. No forward financial guidance was provided in the filing.
Management, verbatim
Life Insurance and Retirement Plan Services were highlights of the quarter, both delivering strong year-over-year earnings growth and reinforcing the resilience of our business mix. In Annuities, return on average account balances improved for a second consecutive quarter, supported by our expanding spread-based businesses, a source of more stable earnings over time. Group Protection fell short of our expectations as the continued normalization of disability incidence was compounded by volatility in claims severity, while underlying fundamentals remain solid.
Ellen Cooper, Chairman, President and CEO of Lincoln Financial
Closing our reinsurance transaction with Talcott in October marked one of the final milestones of the plan we laid out in 2023, further de-risking our balance sheet. With significantly improved financial flexibility, we resumed share repurchases, an important step in expanding durable capital returns.
Ellen Cooper, Chairman, President and CEO of Lincoln Financial
Not in the filing
stated, not guessed- Forward revenue, earnings, margin, expense, tax-rate, or other quantitative guidance was not provided.
- Previous-release outlook was not provided.
- Consolidated GAAP operating income was not reported.
- Consolidated gross margin was not reported.
- Consolidated operating cash flow was not reported.
- Free cash flow was not reported.
- Cash balance was not reported.
- Debt balance was not reported.
- Consolidated effective tax rate was not reported.
- Common-stock dividend information was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.