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Life Health > Life Insurance

Analyst: Hiring Planners Should Help Lincoln

By Trevor Thomas

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NU Online News Service, May 16, 11:21 a.m. – Lincoln National Corp., Fort Wayne, Ind., should benefit from hiring as many as 800 financial planners by 2007, according to a new, five-page report from Andrew Kligerman, a securities analyst with Bear Stearns & Company Inc., New York.

Lincoln reported $15 million in losses for its distribution operations in the first quarter.

But Kligerman thinks earnings at one of the distribution arms, Lincoln Financial Distributors division, will improve along with sales.

Another distribution arm, the Lincoln Financial Advisors division, ought to break even within two to three years as a result of increases in financial planner productivity and efforts to hire more planners, Kligerman writes.

“LFA expects to increase its financial planner count from 2,200 to 3,000 within the next three to five years,” Kligerman notes. “In 2001, net agent count increased by 100 and management expects a net increase of 100-150 this year.”

Although the increases could help Lincoln’s earnings, they might not represent an immediate bonanza for the planners.

Kligerman says the expansion at Lincoln Financial Advisors is good for Lincoln’s bottom line partly because Lincoln provides only $25,000 in subsidies over the course of two years while a new planner is learning the ropes.

Kligerman also sees reasons for optimism about Lincoln’s life and retirement units. He is forecasting annual growth of at least 10% in life sales and at least 15% in annuity sales.

Positive factors at the life unit include the quality of its products; improvements in distribution; and efforts to integrate three recently acquired life operations: First Penn-Pacific Life Insurance Company, Schaumburg, Ill., and Hartford-based life businesses acquired from Aetna Inc., and CIGNA Corp.

At the retirement unit, efforts to move to a single set of commission schedules and administrative systems should help, Kligerman writes.

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