Jon Boscia says Lincoln National Corp. has no particular need to be acquired.[@@]

“But he believes the company is at the top of the list, given its distribution and product strength,” Andrew Kligerman, the lead life sector analyst at UBS Investment Research, writes in a report on a recent meeting with Boscia, who happens to be the chief executive at Lincoln National, Philadelphia, and other Lincoln National executives.

Boscia suggested that Lincoln National might make an acquisition of its own to add scale to its existing business lines, Kligerman writes in the report.

Other observations in Kligerman’s report:

- Lincoln National remains committed to achieving a 15% return on equity.

- Lincoln National may be carrying as much as $500 million more capital than it needs to maintain a risk-based capital ratio of 325% and a debt-to-capital ratio of 25%. That capital cushion is meant to satisfy rating agencies’ concerns about variable annuity guarantees and universal life policies with secondary guarantees, “but building confidence in LNC’s risk management could lower agency capital requirements,” Kligerman writes. The company has tried to increase rating agencies’ comfort with lower capital levels by investing in hedging strategies and risk-management systems.

- Lincoln National succeeded at saving about $104 million before taxes through the life and annuity realignment announced 2 years ago, according to Fred Crawford, Lincoln National’s chief financial officer. “But the savings were absorbed by corporate expenses related to Sarbanes-Oxley compliance, responses to industry-wide regulatory inquiries and investments in risk-management systems,” Kligerman writes.