Lincoln National Corp.

The stable outlook is based on LFG's competitive advantages and robust risk management that, in our view, are sustainable. We do not expect to change the rating within the outlook horizon of two years. We could lower our ratings on LFG in the next two years if, contrary to our expectations, its: Capital adequacy deteriorates for an extended period to a level that no longer supports the ratings; Competitive position weakens in its key markets because of material sales decline or net outflow; or Funding structure worsens due to earnings deterioration. We view an upgrade as unlikely over the next two years because the group does not currently hold capital that is redundant at the 'AAA' level, per our RBC

...Lincoln Financial Group (LFG) has a very diversified earnings profile and is a strong competitor in several significant U.S. markets. LFG's very strong competitive position reflects its top market positions across a number of products (e.g., No. 1 seller of universal life and variable universal life, and No. 2 seller of variable annuities in 2018, per LIMRA reports) and its diverse earnings profile. The company sets risk-aware goals, such as achieving a sales mix skewed more toward products without guarantees and with a specific balance of mortality and morbidity risks, and has successfully achieved them in recent years, which demonstrates the ties between risk management and strategy. LFG should remain financially strong, despite any potential declines or volatility in profitability. LFG routinely buys back shares and pays dividends to its shareholders while maintaining capital that is redundant at the '##' level, per our risk-based capital (RBC) model. Its earnings can be volatile due...

Full Report