Lincoln National Q1 2026 Results Reflect Strategic Growth and Capital Strength

Key highlights of Lincoln National Corporation’s Q1 2026 results

1) Earnings momentum: continued growth and improving “quality” focus

• Adjusted operating income available to common stockholders rose 16% year-over-year, marking Lincoln’s 7th consecutive quarter of year-over-year adjusted operating income growth. ¹²
• Management framed Q1 as consistent execution and “meaningful progress” on strategic priorities, supported by favorable underwriting experience, spread growth, and alternative investments. ¹³
• At the consolidated level, Lincoln reported adjusted operating income available to common stockholders of $326 million (or $1.66 per diluted share) in Q1 2026, with no significant items and two normalizing items. ³

Why this matters strategically: Management’s strategy emphasizes fortifying capital, optimizing the operating model, and driving profitable growth, and the earnings trend is presented as the outcome of those multi-year actions (balance sheet strength, operating model efficiency, diversification). ¹²

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2) Underwriting and segment execution: profitability gains in Group Protection and Lifespan businesses

Group Protection

• Group Protection operating income was $112 million, up 11% year-over-year (from $101 million), and margin was 8% (up 60 bps year-over-year). ⁴
• Drivers included strong group life results partially offset by disability normalization; group life loss ratio was ~67%, improved by more than 800 bps vs Q1 2025. ⁴
• Disability loss ratio was 73.4% vs 70.1% in the prior year quarter, with elevated loss ratio attributed to higher incidence in paid family leave in newly effective states. ⁴

Annuities

• Annuities operating income was $275 million, down from $290 million in the prior year quarter, with explanation tied to several moving pieces (including items affecting reported operating income rather than underlying economics). ⁵⁶
• Lincoln described continued strategic repositioning toward less market-sensitive business mix; Q1 results reflected this “deliberate mix shift.” ⁷⁸
• Lincoln also cited ongoing benefits from spread growth even amid traditional variable annuity outflows. ³⁹

Life Insurance

• Life operating earnings were $41 million, described as the strongest first quarter in 5 years and an improvement from an operating loss of $16 million in the prior year quarter. ¹⁰
• Management attributed the improvement to higher alternative investment returns and a captive consolidation benefit (~$10 million year-over-year tailwind). ¹⁰

Why this matters strategically: The segmentation discussion aligns with Lincoln’s stated objective to execute disciplined growth and profitable growth across businesses while managing underwriting risk and repositioning product mix toward more stable cash flows. ²⁷

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3) Spread-based strength and disciplined growth in core product areas (premium and margins)

• Group Protection premiums were up 2% year-over-year, driven by strong prior period sales and in-line persistency, offset by a large case lapse. ¹¹
• Premium growth was said to be increasingly concentrated in priority segments: local market premium up more than 4% (strongest YOY increase in nearly a decade) and supplemental health premium up 28% year-over-year. ¹¹
• Lincoln emphasized continued spread expansion and described “ongoing spread expansion” as part of the Q1 performance. ¹

Why this matters strategically: This reflects Lincoln’s focus on competing beyond price (product/service differentiation and disciplined underwriting/pricing), and aligning growth with segments that support a higher-quality earnings profile. ¹¹²

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4) Retirement Plan Services: meaningful operating income growth and “early but tangible proof”

• Retirement Plan Services operating income increased 26% year-over-year. ¹¹
• First-year sales were $1.1 billion, up nearly 3% year-over-year, with growth concentrated in the core market segment (a priority). ¹¹
• Lincoln highlighted base spreads of 116 bps, up 13 bps from 103 bps in the prior year quarter, citing deployment of new money at higher rates and targeted crediting actions. ¹²
• Net flows were negative in Q1 (net outflows ~$200 million, improved vs prior year), and management expected net outflows to be elevated in Q2 ($2.0–$2.5 billion) due to known plan terminations not meeting profitability targets—consistent with being deliberate about retaining only business meeting return thresholds. ¹²

Why this matters strategically: This is an explicit reflection of strategy: balancing top-line momentum with profitability and capital efficiency, even when it means accepting higher outflows to protect earnings quality. ²¹²

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5) Free cash flow and capital generation: liquidity build at the holding company

• Lincoln stated that free cash flow and capital generation continued to build, tracking in line with expectations. ³
• Holding company liquidity (excluding prefunding for December senior note maturity) ended above $800 million, described as reinforcing financial flexibility. ³
• CFO highlighted holding company liquidity of approximately $1.2 billion, including $400 million of prefunding for senior notes maturing in December 2026; therefore net of prefunding, holding company liquidity was ~$805 million. ¹³
• Management also discussed the quarter-to-quarter role of dividend flows and expectations that the “move to the holding company” continues as free cash flow is generated. ¹⁴

Why this matters strategically: This directly supports the “fortifying our capital foundation” priority and provides flexibility to fund broader capital priorities while maintaining resilience amid market uncertainty. ²¹

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6) Capital strength: RBC ratio and leverage at/above targets

• Estimated RBC ratio remained well above the 400% target with a 20 percentage point buffer, and Lincoln noted it ended eighth consecutive quarter above the 420% buffer level. ¹³
• Leverage ratio improved to 25%, stated to be at the long-term target. ¹³

Why this matters strategically: Management presented Q1 as execution consistent with maintaining a capital buffer to support steady strategy execution under adverse conditions. ²¹³

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How these highlights reflect Lincoln’s strategic focus

Lincoln consistently tied Q1 performance to three strategic priorities—(1) fortify capital, (2) optimize the operating model, and (3) drive profitable growth across businesses. ² The reported highlights map to that framework as follows:

1. Capital foundation / balance sheet resilience

   • Strong liquidity and capital metrics (holding company liquidity above $800 million net of prefunding; RBC above buffered target; leverage at target). ³¹³
   • Management linked execution to a balance-sheet fortification and diversification of earnings sources as the foundation for durable value creation. ¹²

2. Operating model optimization and expense discipline

   • Ongoing modernization (e.g., investments like claims platform modernization and digital/automation capabilities) were emphasized as supporting efficiency and customer experience, and expense discipline was described as strategic. ¹¹¹⁵
   • Management cited building an “efficient operating model” and using technology/automation to improve productivity and streamline processes to drive operating leverage. ²

3. Disciplined, profitable growth aligned to priority segments and products

   • Premium growth concentrated in priority segments (local and supplemental health) with disciplined pricing and persistency improvements. ¹¹
   • Retirement plan results combining higher spreads and strong operating income growth while still prioritizing profitability thresholds that can lead to elevated outflows in certain periods. ¹²¹¹
   • Life and annuities progress described as reflecting product mix repositioning (more predictable cash flows and reduced market sensitivity over time), with Q1 framed as consistent with the deliberate approach. ⁷⁸¹⁶

Overall, Q1 2026 results were presented not just as a single-quarter earnings outcome, but as evidence that Lincoln’s strategy is translating into recurring earnings power (including spread growth and underwriting improvements), backed by strong capital and a continuing shift toward more resilient business mix. ¹²⁷