LINCOLN NATIONAL CORP
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 31, 2025
LNC$40.05+2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000059558-25-000047
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking Statements – Cautionary LanguageExecutive SummarySummary of Critical Accounting EstimatesResults of Consolidated OperationsResults of AnnuitiesResults of Life InsuranceResults of Group ProtectionResults of Retirement Plan ServicesResults of Other OperationsConsolidated InvestmentsLiquidity and Capital ResourcesCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0000059558-25-000082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking Statements – Cautionary LanguageExecutive SummarySummary of Critical Accounting EstimatesResults of Consolidated OperationsResults of AnnuitiesResults of Life InsuranceResults of Group ProtectionResults of Retirement Plan ServicesResults of Other OperationsConsolidated InvestmentsLiquidity and Capital Resources – Holding Company Sources and Uses of Liquidity and Capital – DebtThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 360 previous paragraphs and 419 current paragraphs.
287 unchanged; 57 reworded; 50 added; 13 removed; 3 previous and 25 current paragraphs rearranged.
Tables are not compared: 59 previous and 67 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (50)
Current report
During the third quarter of each year, we conduct our comprehensive review of the assumptions and projection models used in estimating MRBs, our reserves and embedded derivatives. For more information on our comprehensive review, see Note 1 in our 2024 Form 10-K.
Current report
(2)For the three months ended June 30, 2025 and 2024, includes changes in MRBs of $932 million and $126 million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $(595) million and $50 million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $68 million and $76 million, respectively. For the six months ended June 30, 2025 and 2024, includes changes in MRBs of $(370) million and $2,021 million, respectively; changes in the fair value of the related hedge instruments inclusive of income allocated to support the cost of hedging or future benefits of $(321) million and $(537) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $4 million and $218 million, respectively.
Current report
(4)For information on the sale of our wealth management business, see Note 1 in our 2024 Form 10-K.
Current report
(7)Includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives for the three months ended June 30, 2025 and 2024, respectively, of $(18) million primarily related to the Bain Capital transaction and $(27) million related to the sale of our wealth management business; and for the six months ended June 30, 2025 and 2024, respectively, of $(38) million related to the Bain Capital transaction and the sale of our wealth management business and $(37) million primarily related to the sale of our wealth management business.
Current report
(9)Includes gains (losses) on early extinguishment of debt of $94 million for the three and six months ended June 30, 2025.
Current report
•Gain on other non-financial assets in 2024 due to the sale of our wealth management business.
Current report
•Higher gain in net annuity product features driven by the impact of capital markets.
Current report
•Lower investment losses driven by lower losses on fixed maturity AFS securities.
Current report
•Net favorable other items in 2025 compared to net unfavorable in 2024 driven by gain on extinguishment of debt in 2025.
Current report
•Gain on other non-financial assets in 2024 due to the sale of our wealth management business.
Current report
•Net favorable other items in 2025 compared to net unfavorable in 2024 driven by gain on extinguishment of debt in 2025 and settlement of cost of reinsurance litigation in 2024.
Current report
•Lower fee income driven by lower average daily separate account balances.
Current report
The decrease in income from operations was partially offset by policyholder liability remeasurement gain in 2025 compared to a loss in 2024 driven by more favorable experience on income annuities than expected.
Current report
•Policyholder liability remeasurement gain in 2025 compared to a loss in 2024 driven by more favorable experience on income annuities than expected.
Current report
(1)See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Make-Whole Premiums” below for additional information.
Current report
•Higher fee income driven by higher DFEL amortization.
Current report
•Lower policyholder liability remeasurement loss driven by more favorable actual to expected mortality experience within UL-type contracts with secondary guarantees.
Current report
(1) See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Make-Whole Premiums” below for additional information.
Current report
Comparison of the Three and Six Months Ended June 30, 2025 to 2024
Current report
(1)Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities. See “Consolidated Investments – Alternative Investments” below for more information on alternative investments.
Current report
•Higher net investment income, net of interest credited, driven by impacts to portfolio yields from the current interest rate environment and higher investment income on surplus investments, partially offset by an increase in crediting rates.
Current report
(1)See “Consolidated Investments – Commercial Mortgage Loan Prepayment and Bond Make-Whole Premiums” below for additional information.
Current report
Loss from operations for Other Operations decreased due primarily to the following:
Current report
•Lower other expenses associated with strategic initiatives.
Current report
•Lower interest and debt expense driven by a decline in average outstanding debt and interest rates.
Current report
Loss from operations for Other Operations decreased due primarily to the following:
Current report
•Lower interest and debt expense driven by a decline in average outstanding debt and interest rates.
Current report
(1)Does not include the amortized cost of trading securities totaling $64 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $64 million in trading securities consisted of $15 million agency and $49 million non-agency.
Current report
(2)Does not include the fair value of trading securities totaling $54 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $54 million in trading securities consisted of $14 million agency and $40 million non-agency.
Current report
(2)Does not include the fair value of trading securities totaling $115 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $115 million in trading securities consisted of $75 million of multiple property CMBS and $40 million of single property CMBS.
Current report
(1)Does not include the amortized cost of trading securities totaling $126 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $126 million in trading securities consisted of $77 million of multiple property CMBS and $49 million of single property CMBS.
Current report
(2)Does not include the fair value of trading securities totaling $109 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $109 million in trading securities consisted of $68 million of multiple property CMBS and $41 million of single property CMBS.
Current report
(2)Does not include the fair value of trading securities totaling $406 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $406 million in trading securities consisted of $286 million of CLOs and $120 million of Other ABS.
Current report
(1)Does not include the amortized cost of trading securities totaling $378 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $378 million in trading securities consisted of $240 million of CLOs and $138 million of Other ABS.
Current report
(2)Does not include the fair value of trading securities totaling $369 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $369 million in trading securities consisted of $240 million of CLOs and $129 million of Other ABS.
Current report
During the second quarter of 2024, The Lincoln National Life Insurance Company (“LNL”) made a $929 million extraordinary dividend
Current report
in the form of investments to LNC for the purpose of the initial capitalization of Lincoln Pinehurst Reinsurance Company (Bermuda) Limited (“LPINE”). See “Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Introduction – Executive Summary – Significant Operational Matters” in our 2024 Form 10-K for more information about LPINE.
Current report
LNC made $805 million in capital contributions in cash to subsidiaries, including $800 million to LNL using proceeds from the Bain Capital transaction, for the three and six months ended June 30, 2025. For more information on the Bain Capital transaction, see “Issuance of Common Stock” below and Note 15 herein.
Current report
During the second quarter of 2024, LNC contributed $929 million of investments and $22 million in cash to LPINE, a wholly owned
Showing the first 40 of 50 passages. Open the source sections for the rest.
Removed paragraphs (13)
Previous report
•The inability to complete our announced transaction with Bain Capital within the expected timeframe, or at all, and the possibility that the anticipated benefits related to the transaction may not materialize as expected;
Previous report
(5)Includes transaction and integration costs related to mergers, acquisitions and divestitures of $(20) million and $(10) million for the three months ended March 31, 2025 and 2024, respectively.
Previous report
•Higher credit loss-related adjustments on fixed maturity AFS securities.
Previous report
Loss from operations for this segment decreased due primarily to the following:
Previous report
•Lower net investment income, net of interest credited, driven by lower investment income on alternative investments.
Previous report
(2)See “Consolidated Investments – Alternative Investments” below for additional information.
Previous report
(3)Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities.
Previous report
Income from operations for this segment decreased due primarily to:
Previous report
(2)Does not include the fair value of trading securities totaling $108 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $108 million in trading securities consisted of $69 million of multiple property CMBS and $39 million of single property CMBS.
Previous report
(2)Does not include the fair value of trading securities totaling $409 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $409 million in trading securities consisted of $287 million of CLOs and $122 million of Other ABS.
Previous report
borrowings from the cash management program related primarily to collateral posting requirements on derivatives. As of
Previous report
LNC entered into a facility agreement in 2020 with a Delaware trust that gives LNC the right over a 10-year period to issue, from time to time, up to $500 million of 2.330% senior notes to the trust in exchange for a corresponding amount of U.S. Treasury securities held by the trust. By agreeing to purchase the 2.330% senior notes in exchange for U.S. Treasury securities upon exercise of the issuance right, the trust will provide a source of liquid assets for the Company. The issuance right will be exercised automatically in full upon our failure to make certain payments to the trust, if the failure to pay is not cured within 30 days, or upon certain bankruptcy events involving LNC. We are also required to exercise the issuance right in full if consolidated stockholders’ equity (excluding AOCI) falls below a minimum threshold (which was $2.75 billion as of March 31, 2025, and is subject to adjustment from time to time in certain cases) and upon certain other events described in the facility agreement. For additional information, see Note 13 in our 2024 Form 10-K.
Reworded paragraphs (57)
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the financial condition as of March 31, 2025, compared with December 31, 2024, and the results of operations for the three months ended March 31, 2025, compared with the corresponding period in 2024 of Lincoln National Corporation and its consolidated subsidiaries. Unless otherwise stated or the context otherwise requires, “LNC,” “Company,” “we,” “our” or “us” refers to Lincoln National Corporation and its consolidated subsidiaries.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the financial condition as of June 30, 2025, compared with December 31, 2024, and the results of operations for the three and six months ended June 30, 2025, compared with the corresponding periods in 2024 of Lincoln National Corporation and its consolidated subsidiaries. Unless otherwise stated or the context otherwise requires, “LNC,” “Company,” “we,” “our” or “us” refers to Lincoln National Corporation and its consolidated subsidiaries.
Previous wording
In this report, in addition to providing consolidated net income (loss), we also provide income (loss) from operations because we believe it is a meaningful measure of the profitability of our business segments and Other Operations. Income (loss) from operations is the financial performance measure we use to evaluate and assess the results of our segments and Other Operations. Accordingly, we define and report income (loss) from operations by segment in Note 15. Our management believes that income (loss) from operations explains the results of our ongoing businesses in a manner that allows for a better understanding of the underlying trends in and performance of our current businesses. Certain items are excluded from income (loss) from operations because they are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.
Current wording
In this report, in addition to providing consolidated net income (loss), we also provide income (loss) from operations because we believe it is a meaningful measure of the profitability of our business segments and Other Operations. Income (loss) from operations is the financial performance measure we use to evaluate and assess the results of our segments and Other Operations. Accordingly, we define and report income (loss) from operations by segment in Note 16. Our management believes that income (loss) from operations explains the results of our ongoing businesses in a manner that allows for a better understanding of the underlying trends in and performance of our current businesses. Certain items are excluded from income (loss) from operations because they are not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.
Previous wording
Net amount at risk (“NAR”) represents the amount of GLB or GDB in excess of a policyholder’s account balance at the balance sheet date. Underperforming markets increase our exposure to potential benefits with the GLB and GDB riders. A contract with a GDB rider is “in the money” if the policyholder’s account balance falls below the GDB. As of March 31, 2025 and 2024, 12% and 9%, respectively, of all in-force contracts with a GDB rider were “in the money.” A contract with a GLB rider is “in the money” if the policyholder’s account balance falls below the present value of GLB payments, assuming no full surrenders. As of March 31, 2025 and 2024, 19% and 16%, respectively, of all in-force contracts with a GLB rider were “in the money.” However, the only way the policyholder can realize the excess of the present value of benefits over the account balance of the contract is through a series of withdrawals or income payments that do not exceed a maximum amount. If, after the series of withdrawals or income payments, the account balance is exhausted, the policyholder will continue to receive a series of annuity payments. The account balance can also fluctuate with market returns on a daily basis resulting in increases or decreases in the excess of the present value of benefits over account balance.
Current wording
Net amount at risk (“NAR”) represents the amount of GLB or GDB in excess of a policyholder’s account balance at the balance sheet date. Underperforming markets increase our exposure to potential benefits with the GLB and GDB riders. A contract with a GDB rider is “in the money” if the policyholder’s account balance falls below the GDB. As of June 30, 2025 and 2024, 4% and 8%, respectively, of all in-force contracts with a GDB rider were “in the money.” A contract with a GLB rider is “in the money” if the policyholder’s account balance falls below the present value of GLB payments, assuming no full surrenders. As of June 30, 2025 and 2024, 15% and 18%, respectively, of all in-force contracts with a GLB rider were “in the money.” However, the only way the policyholder can realize the excess of the present value of benefits over the account balance of the contract is through a series of withdrawals or income payments that do not exceed a maximum amount. If, after the series of withdrawals or income payments, the account balance is exhausted, the policyholder will continue to receive a series of annuity payments. The account balance can also fluctuate with market returns on a daily basis resulting in increases or decreases in the excess of the present value of benefits over account balance.
Previous wording
As of March 31, 2025, we had an approximate $2.1 billion deferred tax asset related to net unrealized losses on fixed maturity available-for-sale (“AFS”) securities. In the assessment of the future realizability of this deferred tax asset, management concluded that its tax planning strategies, including holding these securities to recovery, were prudent and feasible as these unrealized losses were caused by factors other than credit loss, and we have the intent and ability to hold these securities to recovery and collect all of the contractual cash flows.
Current wording
As of June 30, 2025, we had an approximate $1.9 billion deferred tax asset related to net unrealized losses on fixed maturity available-for-sale (“AFS”) securities. In the assessment of the future realizability of this deferred tax asset, management concluded that its tax planning strategies, including holding these securities to recovery, were prudent and feasible as these unrealized losses were caused by factors other than credit loss, and we have the intent and ability to hold these securities to recovery and collect all of the contractual cash flows.
Previous wording
(2)Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. The coinsurance with funds withheld investment portfolio includes fixed maturity securities classified as AFS with changes in fair value recorded in OCI. Since the corresponding and offsetting changes in fair value of the embedded derivative related to the coinsurance with funds withheld investment portfolio are recorded in realized gain (loss), volatility can occur within net income (loss). See Note 7 for more information.
Current wording
(3)Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. The coinsurance with funds withheld investment portfolio includes fixed maturity securities classified as AFS with changes in fair value recorded in OCI. Since the corresponding and offsetting changes in fair value of the embedded derivative related to the coinsurance with funds withheld investment portfolio are recorded in realized gain (loss), volatility can occur within net income (loss). See Note 7 for more information.
Previous wording
(3)Includes $(114) million primarily related to the settlement of cost of insurance litigation for the three months ended March 31, 2024.
Current wording
(5)Includes $(114) million for the six months ended June 30, 2024, primarily related to the settlement of cost of insurance litigation in the first quarter of 2024.
Previous wording
(4)Includes severance expense related to initiatives to realign the workforce of $(6) million and $(49) million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
(6)Includes severance expense related to initiatives to realign the workforce of $(2) million and $(7) million for the three months ended June 30, 2025 and 2024, respectively, and $(8) million and $(56) million for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
(6)Includes deferred compensation mark-to-market adjustment of $(9) million and $(13) million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
(8)Includes deferred compensation mark-to-market adjustment of $1 million for the three months ended June 30, 2025 and 2024, and $(8) million and $(12) million for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
•Gain in net life insurance product features in 2025 compared to loss in 2024 driven by improvement in the fair value of hedges associated with VUL products attributable to the impact of capital markets.
Current wording
•Loss in net life insurance product features in 2025 compared to gain in 2024 driven by change in the fair value of hedges associated with VUL products attributable to the impact of capital markets.
Previous wording
•Growth in average account balances and improvement in our total loss ratio in our Group Protection segment.
Current wording
•Improvement in our total loss ratio in our Group Protection segment.
Previous wording
•Loss in net annuity product features in 2025 compared to gain in 2024 driven by loss in MRB-related impacts in 2025 compared to gain in 2024 due to unfavorable changes from equity markets and interest rates, partially offset by improvement in the fair value of GLB hedge instruments attributable to the impact of capital markets.
Current wording
•Loss in net annuity product features in 2025 compared to gain in 2024 driven by the impact of capital markets.
Previous wording
•Higher commissions and other expenses, net of broker-dealer expenses, driven by higher deferred acquisition costs (“DAC”) amortization.
Current wording
•Higher commissions and other expenses, net of broker-dealer expenses, driven by higher other costs pertaining to business operations and higher deferred acquisition costs (“DAC”) amortization.
Previous wording
•Lower net investment income, net of interest credited, which more than offset impacts from higher average general account balances, improving portfolio yields from the current interest rate environment and higher investment income within our surplus portfolio. The lower net investment income, net of interest credited, was experienced in certain reinsured portfolios that have a corresponding increase in other revenues and decrease in benefits.
Current wording
•Lower net investment income, net of interest credited, which more than offset impacts from higher average general account balances, improving portfolio yields from the current interest rate environment and higher investment income within our surplus portfolio. The lower net investment income, net of interest credited, was experienced in certain reinsured portfolios that have a corresponding increase in other revenues.
Previous wording
Income from operations for this segment increased due primarily to the following:
Current wording
Income from operations for this segment increased due primarily to:
Previous wording
The other component of net flows relates to the retention of new business and account balances. An important measure of retention is the reduction in account balances caused by full surrenders, deaths and other contract benefits. These outflows as a percentage of average gross account balances were 11% for the three months ended March 31, 2025 and 2024.
Current wording
The other component of net flows relates to the retention of new business and account balances. An important measure of retention is the reduction in account balances caused by full surrenders, deaths and other contract benefits. These outflows as a percentage of average gross account balances were 11% for thethree and six months ended June 30, 2025, and 10% and 11%, respectively, for the corresponding periods in 2024.
Previous wording
(1)Includes term insurance premiums, which have a corresponding partial offset in benefits for changes in reserves.
Current wording
(1)Includes term insurance premiums, which have a corresponding partial offset in benefits for changes in reserves. The decrease in insurance premiums in the second quarter of 2025 was driven by the expiration of a 10-year assumed reinsurance treaty in the first quarter of 2025, which has a corresponding offset in benefits.
Previous wording
•Higher benefits and policyholder liability remeasurement loss driven by aging of the block, partially offset by improved mortality due to lower claims incidence.
Current wording
•Lower benefits driven by improved mortality for the block in aggregate due to lower claims incidence, partially offset by aging of the block.
Previous wording
The decrease in loss from operations for this segment was partially offset by the following:
Current wording
The increase in income from operations for this segment was partially offset by higher policyholder liability remeasurement loss driven by more unfavorable actual to expected mortality experience within UL-type contracts with secondary guarantees.
Previous wording
(1)Includes primarily long-term care claims and life surrender benefits.
Current wording
(1) Includes primarily long-term care claims and life surrender benefits.
Previous wording
(1)The amortization of deferred loss on business sold through reinsurance pertains to the fourth quarter 2023 reinsurance transaction. See Note 1 in our 2024 Form 10-K for additional information.
Current wording
(1) The amortization of deferred loss on business sold through reinsurance pertains to the fourth quarter 2023 reinsurance transaction. See Note 1 in our 2024 Form 10-K for additional information.
Previous wording
Income from operations for this segment increased due primarily to higher insurance premiums due to growth in business in force and persistency.
Current wording
•Higher insurance premiums due to growth in business in force and persistency.
Previous wording
•Higher commissions and other expenses due to incentive compensation as a result of increased production performance and higher other costs pertaining to business operations.
Current wording
•Higher commissions and other expenses due to incentive compensation as a result of production performance.
Previous wording
•Higher benefits, net of policyholder liability remeasurement gain, driven by growth in business in force and higher claims experience in our life business, partially offset by lower incidence in our disability business.
Current wording
•Higher benefits, net of policyholder liability remeasurement gain, driven by less favorable claims experience than expected and growth in business in force, partially offset by lower incidence and claims severity in our life business and lower incidence in our disability business.
Previous wording
•Higher net investment income, net of interest credited, driven by higher investment income on surplus investments, partially offset by lower average general account balances.
Current wording
•Lower net investment income, net of interest credited, driven by an increase in crediting rates, partially offset by impacts to portfolio yields from the current interest rate environment and higher investment income on surplus investments.
Previous wording
•Lower other revenues driven by a plan termination during the fourth quarter of 2024.
Current wording
•Lower other revenues due to a plan termination during the fourth quarter of 2024.
Previous wording
New deposits are an important component of net flows and key to our efforts to grow our business. Although deposits do not significantly affect current period income from operations, they can significantly impact future income from operations. The other component of net flows relates to the retention of the business. An important measure of retention is the reduction in account balances caused by plan sponsor terminations and participant withdrawals. These outflows as a percentage of average account balances were 22% and 13% for the three months ended March 31, 2025 and 2024, respectively. The increase in the outflow rate was attributable primarily to a large plan termination during the first quarter of 2025.
Current wording
New deposits are an important component of net flows and key to our efforts to grow our business. Although deposits do not significantly affect current period income from operations, they can significantly impact future income from operations. The other component of net flows relates to the retention of the business. An important measure of retention is the reduction in account balances caused by plan sponsor terminations and participant withdrawals. These outflows as a percentage of average account balances were 15% and 19% for the three and six months ended June 30, 2025, and 13% for the corresponding periods in 2024. The increase in the outflow rate for the six months ended June 30, 2025, was attributable primarily to a large plan termination during the first quarter of 2025.
Previous wording
Our net flows are negatively affected by the continued net outflows from our oldest blocks of annuities business (as presented on our Net Flows By Market table below as “Multi-Fund® and other”), which are among our higher margin product lines in this segment, due to the fact that they are mature blocks with low distribution and servicing costs. The proportion of these products to our total account balances was 13% and 14% as of March 31, 2025 and 2024, respectively. Due to this overall shift in business mix toward products with lower returns, new deposit production continues to be necessary to maintain earnings at current levels.
Current wording
Our net flows are negatively affected by the continued net outflows from our oldest blocks of annuities business (as presented on our Net Flows By Market table below as “Multi-Fund® and other”), which are among our higher margin product lines in this segment, due to the fact that they are mature blocks with low distribution and servicing costs. The proportion of these products to our total account balances was 12% and 14% as of June 30, 2025 and 2024, respectively. Due to this overall shift in business mix toward products with lower returns, new deposit production continues to be necessary to maintain earnings at current levels.
Previous wording
Loss from operations for Other Operations modestly decreased due primarily to higher net investment income, net of interest credited, related to higher allocated investments driven by an increase in excess capital retained by Other Operations. The decrease in loss from operations was partially offset by lower other revenues due to the effect of market fluctuations on assets held as part of certain compensation plans.
Current wording
The decrease in loss from operations was partially offset by lower net investment income, net of interest credited, related to lower allocated investments driven by a decrease in excess capital retained by Other Operations.
Previous wording
As of March 31, 2025, and December 31, 2024, 97% of the total fixed maturity AFS securities in an unrealized loss position were investment grade. Our gross unrealized losses recognized in OCI on fixed maturity AFS securities as of March 31, 2025, decreased by $742 million since December 31, 2024. For the three months ended March 31, 2025, we recognized $122 million of gross losses, on fixed maturity AFS securities, which were primarily related to sales that support our reinsurance funds withheld agreements where the investment results are passed directly to the reinsurers. For the three months ended March 31, 2024, we recognized $61 million of gross losses on fixed maturity AFS securities, which were primarily related to portfolio rebalancing.
Current wording
As of June 30, 2025, and December 31, 2024, 97% of the total fixed maturity AFS securities in an unrealized loss position were investment grade. Our gross unrealized losses recognized in OCI on fixed maturity AFS securities as of June 30, 2025, decreased by $1.0 billion since December 31, 2024. For the six months ended June 30, 2025, we recognized $149 million of gross losses, on fixed maturity AFS securities, which were primarily related to sales that support our reinsurance funds withheld agreements where the investment results are passed directly to the reinsurers. For the six months ended June 30, 2024, we recognized $167 million of gross losses on fixed maturity AFS securities, which were primarily related to portfolio rebalancing and sales that support our reinsurance funds withheld agreements where the investment results are passed directly to the reinsurers.
Previous wording
We recognized $(28) million of credit loss benefit (expense) on our fixed maturity AFS securities for the three months ended March 31, 2025, and $(2) million for the corresponding period in 2024. In order to determine the amount of credit loss, we calculated the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. To determine the recoverability, we considered the facts and circumstances surrounding the underlying issuer including, but not limited to, the following:
Current wording
We recognized $(19) million and $(47) million of credit loss benefit (expense) on our fixed maturity AFS securities for the three and six months ended June 30, 2025, respectively, and $(23) million and $(25) million, respectively, for the corresponding periods in 2024. In order to determine the amount of credit loss, we calculated the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. To determine the recoverability, we considered the facts and circumstances surrounding the underlying issuer including, but not limited to, the following:
Previous wording
As reported on the Consolidated Balance Sheets, we had $133.5 billion of investments and cash and invested cash, which exceeded the liabilities for our future obligations under insurance policies and contracts, net of amounts recoverable from reinsurers and amounts on deposit with reinsurers, which totaled $110.4 billion as of March 31, 2025. If it were necessary to liquidate fixed maturity AFS securities prior to maturity or call to meet cash flow needs, we would first look to those fixed maturity AFS securities that are in an unrealized gain position, which had a fair value of $23.3 billion as of March 31, 2025, rather than selling fixed maturity AFS securities in an unrealized loss position. The amount of cash that we have on hand at any point in time takes into account our liquidity needs in the future, other sources of cash, such as the maturities of investments, interest and dividends we earn on our investments and the ongoing cash flows from new and existing business. For additional information, see “Liquidity and Capital Resources” below.
Current wording
As reported on the Consolidated Balance Sheets, we had $138.3 billion of investments and cash and invested cash, which exceeded the liabilities for our future obligations under insurance policies and contracts, net of amounts recoverable from reinsurers and amounts on deposit with reinsurers, which totaled $113.8 billion as of June 30, 2025. If it were necessary to liquidate fixed maturity AFS securities prior to maturity or call to meet cash flow needs, we would first look to those fixed maturity AFS securities that are in an unrealized gain position, which had a fair value of $27.3 billion as of June 30, 2025, rather than selling fixed maturity AFS securities in an unrealized loss position. The amount of cash that we have on hand at any point in time takes into account our liquidity needs in the future, other sources of cash, such as the maturities of investments, interest and dividends we earn on our investments and the ongoing cash flows from new and existing business. For additional information, see “Liquidity and Capital Resources” below.
Previous wording
As of March 31, 2025, and December 31, 2024, the estimated fair value for all private placement securities was $21.5 billion and $20.9 billion, respectively, representing 17% and 16% of total investments, respectively.
Current wording
As of June 30, 2025, and December 31, 2024, the estimated fair value for all private placement securities was $22.0 billion and $20.9 billion, respectively, representing 17% and 16% of total investments, respectively.
Previous wording
The market value of fixed maturity AFS and trading securities backed by subprime loans was $180 million and represented less than 1% of our total investment portfolio as of March 31, 2025. Fixed maturity AFS securities represented $173 million, or 96%, and trading securities represented $7 million, or 4%, of the subprime exposure as of March 31, 2025. The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of March 31, 2025:
Current wording
The market value of fixed maturity AFS and trading securities backed by subprime loans was $178 million and represented less than 1% of our total investment portfolio as of June 30, 2025. Fixed maturity AFS securities represented $171 million, or 96%, and trading securities represented $7 million, or 4%, of the subprime exposure as of June 30, 2025. The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of June 30, 2025:
Previous wording
(1)Does not include the amortized cost of trading securities totaling $71 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $71 million in trading securities consisted of $14 million agency and $57 million non-agency.
Current wording
(1)Does not include the amortized cost of trading securities totaling $61 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $61 million in trading securities consisted of $14 million agency and $47 million non-agency.
Previous wording
(2)Does not include the fair value of trading securities totaling $63 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $63 million in trading securities consisted of $13 million agency and $50 million non-agency.
Current wording
(2)Does not include the fair value of trading securities totaling $53 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $53 million in trading securities consisted of $13 million agency and $40 million non-agency.
Previous wording
None of these investments included any direct investments in subprime lenders or mortgages. We are not aware of material exposure to subprime loans in our alternative investment portfolio.
Current wording
None of these investments as of June 30, 2025, and December 31, 2024, included any direct investments in subprime lenders or mortgages. We are not aware of material exposure to subprime loans in our alternative investment portfolio as of June 30, 2025, and December 31, 2024.
Previous wording
(1)Does not include the amortized cost of trading securities totaling $125 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $125 million in trading securities consisted of $76 million of multiple property CMBS and $49 million of single property CMBS.
Current wording
(1)Does not include the amortized cost of trading securities totaling $130 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $130 million in trading securities consisted of $81 million of multiple property CMBS and $49 million of single property CMBS.
Previous wording
The following summarizes our investments in asset-backed securities within fixed maturity AFS securities (in millions) as of March 31, 2025:
Current wording
The following summarizes our investments in ABS within fixed maturity AFS securities (in millions) as of June 30, 2025:
Previous wording
(1)Does not include the amortized cost of trading securities totaling $416 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $416 million in trading securities consisted of $287 million of CLOs and $129 million of Other ABS.
Current wording
(1)Does not include the amortized cost of trading securities totaling $412 million that primarily support our reinsurance funds withheld and modified coinsurance agreements because investment results for these agreements are passed directly to the reinsurers. The $412 million in trading securities consisted of $287 million of CLOs and $125 million of Other ABS.
Previous wording
(1)Includes certain mortgage loans on real estate that support our modified coinsurance agreements, where the investment results are passed directly to the reinsurers. As of March 31, 2025, and December 31, 2024, the fair value of such commercial mortgage loans on real estate that were in delinquent status was $21 million.
Current wording
(1)Includes certain mortgage loans on real estate that support our modified coinsurance agreements, where the investment results are passed directly to the reinsurers. As of June 30, 2025, and December 31, 2024, the fair value of such commercial mortgage loans on real estate that were in delinquent status was $30 million and $21 million, respectively.
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Rearranged current paragraphs (25)
Current report — wording carried from elsewhere
On June 5, 2025, we closed our previously announced stock sale transaction pursuant to the purchase agreement (the “Purchase Agreement”) with Bain Capital Prairie, LLC (the “Buyer”), a newly formed subsidiary of Bain Capital, under which we agreed to sell shares representing 9.9% of our outstanding common stock on a post-issuance basis to the Buyer. Under the final terms, Lincoln sold approximately 18.8 million shares of its common stock for aggregate consideration of $825 million. The transaction provided us with capital that we expect to deploy toward our strategic priorities, including growing spread-based earnings, advancing our portfolio management efforts and asset sourcing capabilities and optimizing our legacy life portfolio. For additional information on the Bain Capital transaction, see Note 15.
Current report — wording carried from elsewhere
•Less favorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
Current report — wording carried from elsewhere
•Higher investment income on alternative investments.
Current report — wording carried from elsewhere
Net income decreased due primarily to the following:
Current report — wording carried from elsewhere
The decrease in net income was partially offset by the following:
Current report — wording carried from elsewhere
•Lower loss in net life insurance product features driven by change in the fair value of hedges associated with VUL products attributable to the impact of capital markets.
Current report — wording carried from elsewhere
•Improvement in our total loss ratio in our Group Protection segment.
Current report — wording carried from elsewhere
•Higher investment income on alternative investments.
Current report — wording carried from elsewhere
•Lower net investment income, net of interest credited, which more than offset impacts from higher average general account balances, improving portfolio yields from the current interest rate environment and higher investment income within our surplus portfolio. The lower net investment income, net of interest credited, was experienced in certain reinsured portfolios that have a corresponding increase in other revenues.
Current report — wording carried from elsewhere
•Higher commissions and other expenses, net of broker-dealer expenses, driven by higher DAC amortization and higher other costs pertaining to business operations.
Current report — wording carried from elsewhere
•Higher net investment income, net of interest credited, driven by higher investment income on alternative investments.
Current report — wording carried from elsewhere
•Higher net investment income, net of interest credited, driven by higher investment income on alternative investments.
Current report — wording carried from elsewhere
The increase in income from operations for this segment was partially offset by higher benefits driven by aging of the block, partially offset by improved mortality due to lower claims incidence.
Current report — wording carried from elsewhere
(2) See “Consolidated Investments – Alternative Investments” below for additional information.
Current report — wording carried from elsewhere
(3) Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities.
Current report — wording carried from elsewhere
•Higher net investment income, net of interest credited, driven by growth in business in force.
Current report — wording carried from elsewhere
•Higher commissions and other expenses driven by higher trail commissions resulting from higher average daily separate account balances.
Current report — wording carried from elsewhere
•Higher other revenues due to the effect of market fluctuations on assets held as part of certain compensation plans.
Current report — wording carried from elsewhere
•Higher net investment income, net of interest credited, related to higher allocated investments driven by an increase in excess capital retained by Other Operations.
Current report — wording carried from elsewhere
•Higher other revenues due to the effect of market fluctuations on assets held as part of certain compensation plans.
Current report — wording carried from elsewhere
The market value of fixed maturity AFS and trading securities backed by subprime loans was $179 million and represented less than 1% of our total investment portfolio as of December 31, 2024. Fixed maturity AFS securities represented $172 million, or 96%, and trading securities represented $7 million, or 4%, of the subprime exposure as of December 31, 2024. The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of December 31, 2024:
Current report — wording carried from elsewhere
The following summarizes our investments in fixed maturity AFS securities backed by pools of commercial mortgages (in millions) as of December 31, 2024:
Current report — wording carried from elsewhere
The following summarizes our investments in ABS within fixed maturity AFS securities (in millions) as of December 31, 2024:
Current report — wording carried from elsewhere
The composition by industry categories of all fixed maturity AFS securities in an unrealized loss position (in millions) as of December 31, 2024, was as follows:
Current report — wording carried from elsewhere
The composition of commercial mortgage loans (in millions) by property type, geographic region and state is shown below as of December 31, 2024:
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•Higher fee income driven by higher average daily separate account balances.
Previous report — wording carried elsewhere
(2)Represents net investment income on the required statutory surplus for this segment and includes the effect of investment income on alternative investments for such assets that are held in the portfolios supporting statutory surplus versus the portfolios supporting product liabilities. See “Consolidated Investments – Alternative Investments” below for more information on alternative investments.
Previous report — wording carried elsewhere
March 31, 2025, LNC did not have outstanding lending into the cash management program.