LINCOLN NATIONAL CORP
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
View on SEC.govAbout this filing
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, 2026 · Filed Jul 30, 2026
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 2026-03-31; filed 2026-05-07.
0000059558-26-000035
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 – DebtCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-30.
0000059558-26-000060
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 358 previous paragraphs and 395 current paragraphs.
304 unchanged; 47 reworded; 30 added; 5 removed; 2 previous and 14 current paragraphs rearranged.
Tables are not compared: 64 previous and 64 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 (30)
Current report
On July 30, 2026, we entered into a reinsurance transaction with Talcott Financial Group designed to advance our strategy to shift our liability mix and grow sustainable free cash flow. For more information, see Note 19.
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 2025 Form 10-K.
Current report
(7)Includes gain on early extinguishment of debt of $94 million for the three and six months ended June 30, 2025.
Current report
Net income increased due primarily to the following:
Current report
The increase in net income was partially offset by the following:
Current report
•The impact of other items driven by a gain on extinguishment of debt in the second quarter of 2025.
Current report
Net income increased due primarily to the following:
Current report
The increase in net income was partially offset by the following:
Current report
•The impact of other items driven by certain legal accruals in 2026 and a gain on extinguishment of debt in 2025.
Current report
Income from operations for this segment remained flat due primarily to higher fee income driven by higher average daily separate account balances, offset by the following:
Current report
•Higher commissions and other expenses driven by higher DAC amortization, higher trail commissions resulting from higher average account balances and higher other costs pertaining to business operations.
Current report
•Lower net investment income, net of interest credited, driven by lower investment income on alternative investments, partially offset by growth in investments.
Current report
Comparison of the Three and Six Months Ended June 30, 2026 to 2025
Current report
The decrease in income from operations was partially offset by the following:
Current report
Comparison of the Three and Six Months Ended June 30, 2026 to 2025
Current report
Loss from operations for Other Operations decreased modestly due primarily to the following:
Current report
•Higher net investment income, net of interest credited, driven by funding agreement activity.
Current report
•More favorable income tax benefits driven by favorable market impacts on tax preferred investment income and higher excess tax benefits associated with stock-based compensation.
Current report
The decrease in loss from operations was partially offset by higher other expenses associated with higher costs pertaining to business operations.
Current report
•Higher other expenses associated with higher costs pertaining to business operations.
Current report
•Higher interest and debt expense driven by an increase in average outstanding debt.
Current report
The increase in loss from operations was partially offset by the following:
Current report
(2)Does not include the fair value of trading securities totaling $104 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 $104 million in trading securities consisted of $47 million agency and $57 million non-agency.
Current report
(2)Does not include the fair value of trading securities totaling $140 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 $140 million in trading securities consisted of $82 million of CLOs and $58 million of Other ABS.
Current report
For the three and six months ended June 30, 2025, LNC made $805 million in cash capital contributions to subsidiaries, including $800 million to LNL using proceeds from the Bain Capital transaction. For more information on the Bain Capital transaction, see
Current report
“Issuance of Common Stock” below and Note 15 herein.
Current report
On June 29, 2026, we completed the issuance and sale of $500 million aggregate principal amount of our 6.800% Subordinated Notes due July 15, 2056. We intend to use the net proceeds from the offering for general corporate purposes, which may include the repurchase and/or redemption of shares of our outstanding Series C and/or Series D preferred stock, both of which will be redeemable at their stated value on or after December 1, 2027. For more information about our preferred stock, see Note 18 in our 2025 Form 10-K.
Current report
Issuance of Common Stock
Current report
On June 5, 2025, we closed our stock sale transaction pursuant to the Purchase Agreement with Bain Capital Prairie, LLC, 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, we sold approximately 18.8 million shares of our common stock for aggregate consideration of $825 million. For additional information on the Bain Capital transaction, see Note 15.
Removed paragraphs (5)
Previous report
Net loss decreased due primarily to the following:
Previous report
The decrease in net loss was partially offset by higher net unfavorable other items.
Previous report
The majority of our interest credited relates to our reinsurance operations sold to Swiss Re Life & Health America, Inc. (“Swiss Re”) in 2001. A substantial amount of the business was sold through indemnity reinsurance transactions, which is still recorded in the consolidated financial statements. The interest credited corresponds to investment income earnings on the assets we continue to hold for this business. There is no effect to income or loss in Other Operations or on a consolidated basis for these amounts because interest earned on the blocks that continue to be reinsured is passed through to Swiss Re in the form of interest credited.
Previous report
(1)Does not include the amortized cost of trading securities totaling $87 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 $87 million in trading securities consisted of $49 million agency and $38 million non-agency.
Previous report
(2)Does not include the fair value of trading securities totaling $142 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 $142 million in trading securities consisted of $81 million of CLOs and $61 million of Other ABS.
Reworded paragraphs (47)
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, 2026, compared with December 31, 2025, and the results of operations for the three months ended March 31, 2026, compared with the corresponding period in 2025 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, 2026, compared with December 31, 2025, and the results of operations for the three and six months ended June 30, 2026, compared with the corresponding periods in 2025 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
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, 2026 and December 31, 2025, 9% and 4%, 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, 2026 and December 31, 2025, 21% and 14%, 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, 2026 and December 31, 2025, 2% and 4%, 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, 2026 and December 31, 2025, 13% and 14%, 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, 2026, 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.
Current wording
As of June 30, 2026, we had an approximate $1.8 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
(1)For the three months ended March 31, 2026 and 2025, includes changes in MRBs of $(997) million and $(1,302) 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 $177 million and $268 million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $125 million and $(58) million, respectively.
Current wording
(1)For the three months ended June 30, 2026 and 2025, includes changes in MRBs of $1,450 million and $932 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 $(115) million and $(605) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $162 million and $78 million, respectively. For the six months ended June 30, 2026 and 2025, includes changes in MRBs of $453 million and $(370) 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 $62 million and $(337) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $287 million and $20 million, respectively.
Previous wording
(3)Includes certain legal accruals of $(122) million for the three months ended March 31, 2026.
Current wording
(3)Includes certain legal accruals of $(122) million for the six months ended June 30, 2026.
Previous wording
(4)Includes severance expense related to initiatives to realign the workforce of $(7) million and $(6) million for the three months ended March 31, 2026 and 2025, respectively.
Current wording
(4)Includes severance expense related to initiatives to realign the workforce of $(11) million and $(2) million for the three months ended June 30, 2026 and 2025, respectively, and $(18) million and $(8) million for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
(5)Includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives of $(20) million related to the sale of our wealth management business for the three months ended March 31, 2025.
Current wording
(5)Includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives of $(18) million primarily related to the Bain Capital transaction for the three months ended June 30, 2025, and $(20) million related to the sale of our wealth management business and $(18) million primarily related to the Bain Capital transaction for the six months ended June 30, 2025.
Previous wording
(6)Includes deferred compensation mark-to-market adjustment of $18 million and $(9) million for the three months ended March 31, 2026 and 2025, respectively.
Current wording
(6)Includes deferred compensation mark-to-market adjustment of $(1) million and $1 million for the three months ended June 30, 2026 and 2025, respectively, and $17 million and $(8) million for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
•Lower loss in net annuity product features driven by the impact of capital markets.
Current wording
•Higher gain in net annuity product features driven by the impact of capital markets.
Previous wording
•Improvement in our Life Insurance segment’s income from operations and in our Group Protection segment’s total loss ratio.
Current wording
•Improvement in our Life Insurance segment’s income from operations.
Previous wording
•Lower investment losses driven by lower losses on certain investments associated with the fourth quarter 2023 reinsurance transaction.
Current wording
•Higher investment losses driven by higher losses on certain investments associated with the fourth quarter 2023 reinsurance transaction.
Previous wording
•Higher commissions and other expenses driven by higher deferred acquisition costs (“DAC”) amortization and higher trail commissions resulting from higher average account balances.
Current wording
•Higher commissions and other expenses driven by higher deferred acquisition costs (“DAC”) amortization, higher trail commissions resulting from higher average account balances and higher other costs pertaining to business operations.
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 12% and 11% for the three months ended March 31, 2026 and 2025, respectively.
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 12% for the three and six months ended June 30, 2026, and 11% for the corresponding periods in 2025.
Previous wording
(1)Includes term insurance premiums, which have a corresponding partial offset in benefits and policyholder liability remeasurement for changes in reserves. The decrease in insurance premiums in the first quarter of 2026 was driven by the expiration of a 10-year assumed reinsurance treaty on March 31, 2025, which has a corresponding offset in benefits and policyholder liability remeasurement.
Current wording
(1)Includes term insurance premiums, which have a corresponding partial offset in benefits and policyholder liability remeasurement for changes in reserves. The decrease in insurance premiums for the six months ended June 30, 2026, was driven by the expiration of a 10-year assumed reinsurance treaty on March 31, 2025, which has a corresponding offset in benefits and policyholder liability remeasurement.
Previous wording
•Lower benefits and policyholder liability remeasurement driven by a decrease in change in reserves for UL-type contracts with secondary guarantees, partially offset by less favorable mortality due to higher claims incidence and aging of the block.
Current wording
•Lower benefits and policyholder liability remeasurement driven by a decrease in change in reserves for UL-type contracts with secondary guarantees and more favorable mortality due to lower claims severity, partially offset by aging of the block.
Previous wording
•Higher net investment income, net of interest credited, driven by higher investment income on alternative investments, growth in investments and moderate spread expansion.
Current wording
•Higher net investment income, net of interest credited, driven by growth in investments.
Previous wording
The increase in income from operations for this segment was partially offset by lower fee income on UL-type contracts with secondary guarantees, partially offset by higher deferred front-end loads (“DFEL”) amortization.
Current wording
The increase in income from operations for this segment was partially offset by lower fee income on UL-type contracts with secondary guarantees, partially offset by higher DFEL amortization.
Previous wording
•Flat benefits and policyholder liability remeasurement driven by favorable mortality in our life business, offset by less favorable claims experience than expected and higher incidence in our disability business.
Current wording
•Higher benefits and policyholder liability remeasurement driven by higher incidence and less favorable claims experience than expected in our disability business, partially offset by lower incidence in our life business.
Previous wording
The increase in income from operations was partially offset by higher commissions and other expenses due to higher other costs pertaining to business operations.
Current wording
•Higher commissions and other expenses due to higher other costs pertaining to business operations.
Previous wording
•Higher net investment income, net of interest credited, driven by impacts to portfolio yields from the current interest rate environment, higher average general account balances and a decrease in crediting rates.
Current wording
•Higher net investment income, net of interest credited, driven by impacts to portfolio yields from the current interest rate environment, a decrease in crediting rates and higher investment income on prepayment and bond make-whole premiums.
Previous wording
•Higher other revenues due to an impact in the first quarter of 2025 related to a plan termination during the fourth quarter of 2024.
Current wording
In addition, for the six months ended June 30, 2026, income from operations increased due to higher other revenues due to an impact in the first quarter of 2025 related 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 14% and 22% for the three months ended March 31, 2026, and 2025, respectively. The higher outflow rate for the three months ended March 31, 2025, compared to the three months ended March 31, 2026, 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 19% and 17% for the three and six months ended June 30, 2026, respectively, and 15% and 19%, respectively, for the corresponding periods in 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 11% and 13% as of March 31, 2026 and 2025, 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 11% and 12% as of June 30, 2026 and 2025, 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
A portion of our investment income earned is credited to the policyholders of our fixed annuity products, including the fixed portion of variable annuity contracts. We expect to earn a spread between what we earn on the underlying general account investments supporting the fixed annuity product line, including the fixed portion of variable annuity contracts, and what we credit to our policyholders’ accounts.
Current wording
A portion of our investment income earned is credited to the policyholders of our fixed annuity products, including the fixed portion of variable annuity contracts. We expect to earn a spread between what we earn on the underlying general account investments supporting the fixed annuity product line, including the fixed portion of variable annuity contracts, and what we credit to our policyholders’ accounts. Commercial mortgage loan prepayments and bond make-whole premiums, investment income on alternative investments and surplus investment income can vary significantly from period to period due to a number of factors and, therefore, may contribute to investment income results that are not indicative of the underlying trends.
Previous wording
(1)Includes our institutional pension business, which has a corresponding offset in benefits and policyholder liability remeasurement for changes in reserves; and funding agreement activity, which has a partial offset in interest credited. For information on funding agreements, see Note 10.
Current wording
(1)Includes our institutional pension business, which has a corresponding offset in benefits and policyholder liability remeasurement for changes in reserves.
Previous wording
•Lower other revenues due to the effect of market fluctuations on assets held as part of certain compensation plans.
Current wording
•Higher other revenues due to the effect of market fluctuations on assets held as part of certain compensation plans.
Previous wording
• Lower net investment income, net of interest credited, related to lower allocated investments driven by a decrease in excess capital retained by Other Operations and lower portfolio yields.
Current wording
• Lower net investment income, net of interest credited, related to lower portfolio yields and lower allocated investments driven by a decrease in excess capital retained by Other Operations, partially offset by funding agreement activity.
Previous wording
As of March 31, 2026, and December 31, 2025, 98% and 97%, respectively, 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, 2026, increased by$899 million since December 31, 2025. For the three months ended March 31, 2026, we recognized $17 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, 2025, we recognized$122 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.
Current wording
As of June 30, 2026, and December 31, 2025, 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, 2026, increased by $333 million since December 31, 2025. For the six months ended June 30, 2026, we recognized$209 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, 2025, we recognized$149 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 $(24) million of credit loss benefit (expense) on our fixed maturity AFS securities for the three months ended March 31, 2026, and $(28) million for the corresponding period in 2025. In order to determine the amount of credit loss, we calculated the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. To determine the recoverability, we considered the facts and circumstances surrounding the underlying issuer including, but not limited to, the following:
Current wording
We recognized$(32) million and $(57) millionof credit loss benefit (expense) on our fixed maturity AFS securities for the three and six months ended June 30, 2026, respectively, and $(19) million and $(47) million, respectively, for the corresponding periods in 2025. 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 $146.1 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 $121.0 billion as of March 31, 2026. 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 $23.8 billion as of March 31, 2026, 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$153.5 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$124.7 billion as of June 30, 2026. 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$27.1 billion as of June 30, 2026, 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, 2026, and December 31, 2025, the estimated fair value for all private placement secur ities was$23.2 billion, representing 17% of total investments.
Current wording
As of June 30, 2026, and December 31, 2025, the estimated fair value for all private placement secur ities was$24.0 billion and$23.2 billion, respectively, representing 17% of total investments.
Previous wording
Themarket value of fixed maturity AFS and trading securities backed by subprime loans was $166 million and represented less than 1% of our total investment portfolio as of March 31, 2026. Fixed maturity AFS securities represented $164 million, or 99%, and trading securities represented $2 million, or 1%, of the subprime exposure as of March 31, 2026. The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of March 31, 2026:
Current wording
Themarket value of fixed maturity AFS and trading securities backed by subprime loans was $161 million and represented less than 1% of our total investment portfolio as of June 30, 2026. Fixed maturity AFS securities represented $159 million, or 99%, and trading securities represented $2 million, or 1%, of the subprime exposure as of June 30, 2026. The table below summarizes our investments in fixed maturity AFS securities backed by pools of residential mortgages (in millions) as of June 30, 2026:
Previous wording
(2)Does not include the fair value of trading securities totaling $82 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 $82 million in trading securities consisted of $48 million agency and $34 million non-agency.
Current wording
(1)Does not include the amortized cost of trading securities totaling $110 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 $110 million in trading securities consisted of $48 million agency and $62 million non-agency.
Previous wording
(1)Does not include the amortized cost of trading securities totaling $146 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 $146 million in trading securities consisted of $81 million of CLOs and $65 million of Other ABS.
Current wording
(1)Does not include the amortized cost of trading securities totaling $143 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 $143 million in trading securities consisted of $81 million of CLOs and $62 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, 2026, and December 31, 2025, the fair value of such commercial mortgage loans on real estate that were in delinquent status was $19 million and $20 million, respectively.
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, 2026, and December 31, 2025, the fair value of such commercial mortgage loans on real estate that were in delinquent status was$20 million.
Previous wording
As of March 31, 2026, there were specifically identified impaired commercial and residential mortgage loans with an aggregate carrying value of $65 million and $85 million, respecti vely, or less than 1% of total mortgage loans on real estate. As of December 31, 2025, there were specifically identified impaired commercial and residential mortgage loans with an aggregate carrying value of $67 million and $85 million, respectively, or less than 1% of total mortgage loans on real estate.
Current wording
As of June 30, 2026, there were specifically identified impaired commercial and residential mortgage loans with an aggregate carrying value of $48 million and $86 million, respectively, or less than 1% of total mortgage loans on real estate. As of December 31, 2025, there were specifically identified impaired commercial and residential mortgage loans with an aggregate carrying value of $67 million and $85 million, respectively, or less than 1% of total mortgage loans on real estate.
Previous wording
The total outstanding principal and interest on commercial mortgage loans that were two or more payments delinquent, excluding foreclosures, as of March 31, 2026, and December 31, 2025, was $36 million and $40 million, respectively, or less than 1% of total mortgage loans on real estate. The total outstanding principal and interest on residential mortgage loans that were three or more payments delinquent, excluding foreclosures, as of March 31, 2026, and December 31, 2025, was $87 million and $58 million, respectively, or less than 1% of total mortgage loans on real estate.
Current wording
The total outstanding principal and interest on commercial mortgage loans that were two or more payments delinquent, excluding foreclosures, as of June 30, 2026, and December 31, 2025, was $76 million and $40 million, respectively, or less than 1% of total mortgage loans on real estate. The total outstanding principal and interest on residential mortgage loans that were three or more payments delinquent, excluding foreclosures, as of June 30, 2026, and December 31, 2025, was $79 million and $58 million, respectively, or less than 1% of total mortgage loans on real estate.
Previous wording
As of March 31, 2026, and December 31, 2025, alternative investments included investments in 380 and 384 different partnerships, respectively, and the portfolio represented approximately 3% of total investments. These amounts do not include alternative investments that support funds withheld and modified coinsurance reinsurance agreements where the investment results are passed directly to the reinsurers. The partnerships do not represent off-balance sheet financing and generally involve several third-party partners. Some of our partnerships contain capital calls, which require us to contribute capital upon notification by the general partner. These capital calls are contemplated during the initial investment decision and are planned for well in advance of the call date. The capital calls are not material in size and are not material to our liquidity. Alternative investments are accounted for using the equity method of accounting and are included in other investments on the Consolidated Balance Sheets.
Current wording
As of June 30, 2026, and December 31, 2025, alternative investments included investments in 375 and 384 different partnerships, respectively, and the portfolio represented approximately 3% of total investments. These amounts do not include alternative investments that support funds withheld and modified coinsurance reinsurance agreements where the investment results are passed directly to the reinsurers. The partnerships do not represent off-balance sheet financing and generally involve several third-party partners. Some of our partnerships contain capital calls, which require us to contribute capital upon notification by the general partner. These capital calls are contemplated during the initial investment decision and are planned for well in advance of the call date. The capital calls are not material in size and are not material to our liquidity. Alternative investments are accounted for using the equity method of accounting and are included in other investments on the Consolidated Balance Sheets.
Previous wording
Our primary sources of liquidity and capital are insurance premiums and fees, investment income, maturities and sales of investments, issuance of debt or other types of securities and policyholder deposits. We also have access to alternative sources of liquidity as discussed below. Our primary uses are to pay obligations under insurance policies and contracts, to fund commissions and other general operating expenses, to purchase investments, to fund policy surrenders and withdrawals, to pay dividends to our common and preferred stockholders, to repurchase our common stock and to repay debt. Our operating activities provided (used) cashof$138 million and $(272) million for the three months ended March 31, 2026 and 2025, respectively. Cash flows from operating activities will fluctuate based on the timing of insurance premiums received and benefit payments to policyholders, as well as other business activities including cash payments on certain derivatives used to hedge exposure to product-related risks.
Current wording
Our primary sources of liquidity and capital are insurance premiums and fees, investment income, maturities and sales of investments, issuance of debt or other types of securities and policyholder deposits. We also have access to alternative sources of liquidity as discussed below. Our primary uses are to pay obligations under insurance policies and contracts, to fund commissions and other general operating expenses, to purchase investments, to fund policy surrenders and withdrawals, to pay dividends to our common and preferred stockholders, to repurchase our common stock and to repay debt. Our operating activities provided (used) cashof$(420) million and $741 million for the six months ended June 30, 2026 and 2025, respectively. Cash flows from operating activities will fluctuate based on the timing of insurance premiums received and benefit payments to policyholders, as well as other business activities including cash payments on certain derivatives used to hedge exposure to product-related risks.
Previous wording
Our insurance subsidiaries’ regulatory capital levels are affected by statutory accounting rules, which are subject to change by each applicable insurance regulator. For instance, our term products and UL products containing secondary guarantees subject to the NAIC RBC framework require reserves calculated pursuant to the Valuation of Life Insurance Policies Model Regulation (“XXX”) and Actuarial Guideline XXXVIII (“AG38”), respectively. Our insurance subsidiaries employ strategies to reduce the strain caused by XXX and AG38 by reinsuring the business to reinsurance captives or reinsurance subsidiaries. Our captive reinsurance and reinsurance subsidiaries provide a mechanism for financing a portion of the excess reserve amounts in a more efficient manner and free up capital the insurance subsidiaries can use for any number of purposes, including paying dividends to the holding company. We use long-dated LOCs, debt financing, excess of loss structures with third-party reinsurers, as well as other financing strategies to finance certain reserves. For information on the LOCs, see LOCs in Note 13 in our 2025 Form 10-K. Our captive reinsurance and reinsurance subsidiaries have also issued long-term notes of $3.1 billion to finance a portion of the excess reserves associated with our term and UL products with secondary guarantees as of March 31, 2026; of this amount, $2.6 billion involve exposure to variable interest entities. For information on these long-term notes issued by our captive reinsurance and reinsurance subsidiaries, see Note 4 in our 2025 Form 10-K. We have also used the proceeds from senior note issuances of $875 million to execute long-term structured solutions primarily supporting reinsurance of UL products containing secondary guarantees. LOCs and related capital market solutions lower the capital effect of term products and UL products containing secondary guarantees.
Current wording
Our insurance subsidiaries’ regulatory capital levels are affected by statutory accounting rules, which are subject to change by each applicable insurance regulator. For instance, our term products and UL products containing secondary guarantees subject to the NAIC RBC framework require reserves calculated pursuant to the Valuation of Life Insurance Policies Model Regulation (“XXX”) and Actuarial Guideline XXXVIII (“AG38”), respectively. Our insurance subsidiaries employ strategies to reduce the strain caused by XXX and AG38 by reinsuring the business to reinsurance captives or reinsurance subsidiaries. Our captive reinsurance and reinsurance subsidiaries provide a mechanism for financing a portion of the excess reserve amounts in a more efficient manner and free up capital the insurance subsidiaries can use for any number of purposes, including paying dividends to the holding company. We use long-dated letters of credit (“LOCs”), debt financing, excess of loss structures with third-party reinsurers, as well as other financing strategies to finance certain reserves. For information on the LOCs, see LOCs in Note 13 in our 2025 Form 10-K. Our captive reinsurance and reinsurance subsidiaries have also issued long-term notes of $3.0 billion to finance a portion of the excess reserves associated with our term and UL products with secondary guarantees as of June 30, 2026; of this amount, $2.5 billion involve exposure to variable interest entities. For information on these long-term notes issued by our captive reinsurance and reinsurance subsidiaries, see Note 4 in our 2025 Form 10-K. We have also used the proceeds from senior note issuances of $875 million to execute long-term structured solutions primarily supporting reinsurance of UL products containing secondary guarantees. LOCs and related capital market solutions lower the capital effect of term products and UL products containing secondary guarantees.
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
•Unfavorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2026 compared to favorable changes in 2025 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
Current report — wording carried from elsewhere
•Gain in net annuity product features in 2026 compared to loss in 2025 driven by the impact of capital markets.
Current report — wording carried from elsewhere
•Improvement in our Life Insurance segment’s income from operations.
Current report — wording carried from elsewhere
•Higher investment losses driven by higher losses on certain investments associated with the fourth quarter 2023 reinsurance transaction.
Current report — wording carried from elsewhere
•Lower net investment income, net of interest credited, in certain reinsured portfolios and lower investment income due to an allocation refinement, which more than offset impacts from higher average general account balances and improving portfolio yields from the current interest rate environment. The lower net investment income, net of interest credited, in certain reinsured portfolios had a corresponding increase in other revenues.
Current report — wording carried from elsewhere
(2)Consists primarily of revenues attributable to interest income on deposit reinsurance assets and the net settlement related to certain reinsurance transactions, which has a corresponding offset in net investment income and interest credited.
Current report — wording carried from elsewhere
•Lower benefits and policyholder liability remeasurement driven by a decrease in change in reserves for UL-type contracts with secondary guarantees and more favorable mortality due to lower claims incidence and claims severity, partially offset by aging of the block.
Current report — wording carried from elsewhere
The increase in income from operations for this segment was partially offset by the following:
Current report — wording carried from elsewhere
•Lower fee income on UL-type contracts with secondary guarantees, partially offset by higher deferred front-end loads (“DFEL”) amortization.
Current report — wording carried from elsewhere
•Lower commissions and other expenses driven by a reduction in expenses associated with reserve financing due to restructuring certain captive reinsurance subsidiaries in the fourth quarter of 2025.
Current report — wording carried from elsewhere
Income from operations for this segment decreased due primarily to the following:
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
For information on funding agreements, see Note 10.
Current report — wording carried from elsewhere
To meet short-term liquidity needs that arise in the ordinary course of business, we utilize an inter-company cash management program between LNC and participating subsidiaries whereby participating subsidiaries can borrow cash from or lend cash to LNC. Loans under the inter-company cash management program are permitted under applicable insurance laws subject to certain restrictions. For our
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•Higher investment income on alternative investments.
Previous report — wording carried elsewhere
Commercial mortgage loan prepayments and bond make-whole premiums, investment income on alternative investments and surplus investment income can vary significantly from period to period due to a number of factors and, therefore, may contribute to investment income results that are not indicative of the underlying trends.