Lincoln National Q3 2025 presentation: 13% earnings growth, fifth consecutive quarterly increase

Lincoln National Corporation (NYSE:LNC) presented its third-quarter 2025 earnings supplement on October 30, revealing a 13% year-over-year increase in adjusted operating income, marking the fifth consecutive quarter of earnings growth. The company’s stock rose 3.68% during regular trading hours and added another 2.42% in pre-market activity following the results.

Quarterly Performance Highlights

Lincoln National reported adjusted operating income of $397 million, or $2.04 per share, exceeding analysts’ expectations of $1.86 per share. The strong performance was supported by a diversified business mix, with particularly notable improvements in the Life Insurance segment.

"We are delivering today while advancing the capabilities that will drive tomorrow," said CEO Ellen Cooper in the earnings call, emphasizing the company’s dual focus on current performance and future growth.

As shown in the following scorecard, Lincoln achieved significant improvements across multiple business metrics:

The company’s adjusted operating income growth of 13% year-over-year was accompanied by record annuities account balances of $174 billion and a substantial improvement in Life Insurance operating income to $54 million. The leverage ratio decreased by 320 basis points year-over-year, primarily driven by equity growth.

Despite the strong earnings performance, Lincoln National’s revenue of $4.55 billion fell short of the forecasted $4.8 billion, representing a 5.21% miss. However, investors appeared to focus more on the earnings beat, as evidenced by the positive stock movement.

Segment Analysis

The company’s performance was broadly positive across all business segments, with particularly strong results in Annuities and Life Insurance.

Lincoln’s segment-by-segment earnings drivers reveal the sources of the company’s growth:

The Annuities segment, a cornerstone of Lincoln’s business, delivered a 6% year-over-year increase in operating income to $318 million. This growth was driven by favorable equity markets, higher spread income, and favorable tax items. Total annuity sales increased by 32% year-over-year to $4.5 billion, while account balances grew by 5%.

Life Insurance showed the most dramatic improvement, with operating income nearly quadrupling from $14 million in Q3 2024 to $54 million in Q3 2025. This growth was attributed to stable mortality experience, higher investment income, and lower net G&A expenses. Sales in this segment more than doubled year-over-year, primarily driven by executive benefits.

The Group Protection segment maintained steady performance with operating income of $110 million, in line with the prior-year quarter. Favorable life experience was a primary driver, though this was offset by negative long-term disability resolutions. Total sales in this segment increased by 38% year-over-year, and premiums grew by 5%.

Retirement Plan Services reported a 5% year-over-year increase in operating income to $46 million, supported by favorable equity markets and spread expansion. First-year sales reached $2.4 billion, up almost 50% year-over-year, and ending account balances increased by 8%.

Financial Position & Investment Portfolio

Lincoln National’s financial position strengthened during the quarter, with its leverage ratio improving by 320 basis points year-over-year to 25.2%. The company’s estimated risk-based capital (RBC) ratio exceeded 420%, well above its target of maintaining a 20 percentage point buffer above the 400% threshold.

The investment portfolio remains well-diversified with 97% investment-grade-rated assets. The company achieved a 5.9% new money yield during the quarter, while its alternatives portfolio delivered a 2.5% quarterly return.

As illustrated in the following chart, Lincoln maintains a balanced investment approach across various asset classes:

CFO Christopher Neczypor expressed confidence in the company’s trajectory during the earnings call, highlighting a continued focus on profitable growth. The company also noted that it has continued to scale its Funding Agreement Backed Notes (FABN) program and has moved to full retention of its fixed annuity business.

Forward Outlook

Looking ahead, Lincoln National has set an earnings per share forecast of $2.02 for Q4 2025 and $1.85 for Q1 2026. The company anticipates continued growth in its group protection segment and aims to further optimize its investment portfolio.

During the earnings call, executives addressed analyst questions about normalizing disability claims resolution rates and the company’s approach to retaining the fixed annuity business. Management also discussed potential growth in private credit investments and emphasized ongoing product innovation efforts.

With Lincoln’s stock trading at $41.50 as of market close on October 30, the price represents a significant improvement from its 52-week low of $27.58, though it remains below the 52-week high of $43.66. The positive market reaction to the Q3 results suggests growing investor confidence in the company’s strategic direction and operational execution.

Full presentation:

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