When Jon Boscia, chairman and CEO of Lincoln Financial Group, and Dennis Glass, the COO, rang the closing bell at the New York Stock Exchange to celebrate the $7.5 billion merger of Lincoln and Jefferson-Pilot Corp., it was just the beginning of what they say will be a year of integration.
The combined company has a market cap of $16.2 billion as of March 1, 2006, revenue of $9.7 billion and combined 2005 income from operations of $1.42 billion.
By first quarter of 2007, products and distribution channels will be integrated, says Glass. Distribution channels will remain largely the same and there will be some cross-selling of products, he adds.
The melding of product offerings includes Lincoln Financial’s variable and fixed annuities, universal life and variable UL products, term insurance, mutual funds, 529 plans, and Jefferson-Pilot’s annuity and life products, which include equity index annuities and UL and VUL products, many of which have secondary guarantees.
About 55%-60% of sales in J-P’s individual products segment over the last three years were attributable to products with secondary guarantee benefits, and 75% of sales within its annuities and investment products segment over the last two years were attributable to EIAs, according to J-P’s 2005 10K filing.
Lincoln Financial Distributors reaches wirehouses/regional firms, independent financial planner firms, financial institutions, managing general agents and corporate specialty markets, Lincoln’s 2005 10K indicates.
J-P’s distribution channels include independent general agents, independent national marketing organizations, agency building general agents, a district agency network, broker-dealers, banks and strategic alliances, according to its 10K.
During the course of 2006, product introductions will continue as scheduled in order to remain competitive, Glass says.
The integration of both companies will result in a more comprehensive product portfolio that will enable the combined company to reach out to all market segments from the very affluent to those with more modest incomes, he explains.
That integration will include branding under the Lincoln name, a process that started from the day of the merger and should be fully completed by first quarter 2007, says Boscia. Following the merger, visitors to Jefferson-Pilot’s website were redirected to the Lincoln Financial website.
Branding is a key Lincoln Financial strategy, says the company’s 10K, with the focus on financial intermediaries and the top 11% of the population.
Boscia says the field force is looking forward to an expanded number of products to offer. Those in the brokerage distribution channel already can offer them, he says.
That field force will need a product array to be able to reach consumers at different points in their lives, Boscia says. For instance, he says, income planning is going to be an important trend going forward and notes the field of financial services players who advertised the need for income planning during the recent NCAA tournament.
“Boomers are going to have to live off their income for a very long time to come,” Boscia says.