LINCOLN NATIONAL CORP
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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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.
Sep 30, 2026 · Filed Nov 5, 2026
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Results of Consolidated Operations
Details underlying the consolidated results (in millions) were as follows:
| For the ThreeMonths Ended September 30, | For the Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2026 | 2025 | 2026 | 2025 | |
| Net Income (Loss) | ||||
| Income (loss) from operations: | ||||
| Annuities | $294 | $310 | $856 | $886 |
| Life Insurance | 105 | 25 | 202 | 40 |
| Group Protection | 46 | 149 | 305 | 423 |
| Retirement Plan Services | 55 | 46 | 147 | 116 |
| Other Operations | (127) | (99) | (327) | (282) |
| Net annuity product features, pre-tax (1) | 1,317 | 410 | 2,119 | (277) |
| Net life insurance product features, pre-tax | 37 | (22) | 10 | (37) |
| Credit loss-related adjustments, pre-tax | (47) | (38) | (104) | (91) |
| Investment gains (losses), pre-tax | (388) | (35) | (628) | (218) |
| Changes in the fair value of reinsurance-related | ||||
| embedded derivatives, trading securities and | ||||
| certain mortgage loans, pre-tax (2) | 544 | (191) | 638 | (266) |
| Gains (losses) on other non-financial | ||||
| assets, pre-tax | – | – | (6) | – |
| Other items, pre-tax (3)(4)(5)(6)(7) | (164) | (105) | (287) | (65) |
| Income tax benefit (expense) related to the | ||||
| above pre-tax items | (273) | (5) | (366) | 194 |
| Net income (loss) | $1,399 | $445 | $2,559 | $423 |
(1) For the three months ended September 30, 2026 and 2025, includes changes in MRBs of $1,006 million and $337 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 $(8) million and $30 million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $319 million and $43 million, respectively. For the nine months ended September 30, 2026 and 2025, includes changes in MRBs of $1,459 million and $(33) 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 $54 million and $(307) million, respectively; and changes in the fair value of the embedded derivative liabilities and the associated index options for our indexed annuity products of $606 million and $63 million, respectively.
(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.
(3) Includes certain legal accruals of $(14) million and $(136) million for the three and nine months ended September 30, 2026, respectively, and $(9) million for the three and nine months ended September 30, 2025.
(4) Includes severance expense related to initiatives to realign the workforce of $(3) million and $(5) million for the three months ended September 30, 2026 and 2025, respectively, and $(21) million and $(13) million for the nine months ended September 30, 2026 and 2025, respectively.
(5) For the three and nine months ended September 30, 2026, includes transaction, integration and other costs related to mergers, acquisitions, divestitures and certain other corporate initiatives of $(135) million primarily related to a reinsurance recapture; for the three months ended September 30, 2025, includes $(55) million of transaction costs related to restructuring certain captive reinsurance subsidiaries and $(22) million related to Life Insurance segment persistency optimization; for the nine months ended September 30, 2025, includes $(55) million of transaction costs related to restructuring certain captive reinsurance subsidiaries, $(22) million related to Life Insurance segment persistency optimization, $(20) million related to the sale of our wealth management business and $(18) million primarily related to the Bain Capital transaction.
(6) Includes deferred compensation mark-to-market adjustment of $(12) million and $(14) million for the three months ended September 30, 2026 and 2025, respectively, and $5 million and $(22) million for the nine months ended September 30, 2026 and 2025, respectively.
(7) Includes gain on early extinguishment of debt of $94 million for the nine months ended September 30, 2025.
Net income increased due primarily to the following:
Higher gain in net annuity product features driven by the impact of capital markets.
Favorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2026 compared to unfavorable changes in 2025 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
Higher investment income on alternative investments.
Gain in net life insurance product features in 2026 compared to loss in 2025 driven by the impact of capital markets.
Improvement in income from operations in our Life Insurance and Retirement Plan Services segments.
The increase in net income was partially offset by the following:
Higher investment losses primarily related to investments associated with the fourth quarter 2023 reinsurance transaction and the sale of certain fixed maturity AFS securities in 2026, the proceeds of which were reinvested in higher-yielding assets that better align with our asset-liability management objectives.
The impact of other items driven by transaction costs related to a reinsurance recapture in 2026, compared to transaction costs related to restructuring certain captive reinsurance subsidiaries and persistency optimization in our Life Insurance segment in 2025.
Higher unfavorable impact from our annual assumption review.
Increase in our total loss ratio in our Group Protection segment.
Net income increased due primarily to the following:
Gain in net annuity product features in 2026 compared to loss in 2025 driven by the impact of capital markets.
Favorable changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans in 2026 compared to unfavorable changes in 2025 driven by the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction.
Improvement in income from operations in our Life Insurance and Retirement Plan Services segments.
Higher investment income on alternative investments.
The increase in net income was partially offset by the following:
Higher investment losses primarily related to investments associated with the fourth quarter 2023 reinsurance transaction and the sale of certain fixed maturity AFS securities in 2026, the proceeds of which were reinvested in higher-yielding assets that better align with our asset-liability management objectives.
The impact of other items driven by certain legal accruals and transaction costs related to a reinsurance recapture in 2026, compared to a gain on extinguishment of debt and transaction costs related to restructuring certain captive reinsurance subsidiaries and persistency optimization in our Life Insurance segment in 2025.
Increase in our total loss ratio in our Group Protection segment.
Higher unfavorable impact from our annual assumption review.
For information on the fourth quarter 2023 reinsurance transaction, see Note 7.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.