Lincoln Financial increased sales of registered index-linked annuities by 32% between the second quarter of 2024 and the latest quarter, to $1.5 billion, as overall U.S. sales of the hot product increased about 20%.
Ellen Cooper, CEO of the life and annuity issuer, told securities analysts today that Lincoln gained share in the RILA market because of the success of a new RILA contract introduced in mid-2024.
The new RILA has features, such as unusual crediting rate strategies, that are getting distributors' attention, Cooper said.
Now, "we're on those shelves," she added.
What it means: Insurers like Lincoln are hungry for retirement savers' RILA business.
The history: Lincoln took a big hit to capital in 2022, when actuarial reviews uncovered assumptions used to price some older life insurance policies.
Cooper, who came in to turn things around, realigned the company's operations and products. She coped with the drop in capital levels by arranging a large reinsurance deal.
Lincoln passes much of the risk, and profit, associated with the new annuities it writes to the reinsurer.
A strategy shift: Christopher Neczypor, Lincoln's chief financial officer, said the company wants to keep more of its fixed annuity business on its own books.
"Reducing our reliance on flow reinsurance requires capital," Neczypor said.
Lincoln is now doing well enough to provide that capital, he explained.
The earnings: Lincoln executives spoke to the analysts during a call the company held to go over earnings for the second quarter, which ended June 30.
Lincoln reported $688 million in net income for the latest quarter on $4 billion in revenue, compared with $895 million in net income on $5.2 billion in revenue for the second quarter of 2024.
The net income figure includes the impact of changes in the estimated value of the benefits Lincoln has promised. Adjusted income from operations, which excludes the effects of the changes in benefits value and some other gains and charges, increased to $438 million, from $335 million.
The company streamed the analyst call live and posted a recording on its website.
Lincoln Financial CEO Ellen Cooper. Credit: Dave Moser
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