Lincoln National Corp.

The negative outlook reflects our expectation that the group could face more pressure through the next two years than similarly rated peers. In particular, it reflects our doubts about the sustainability of the group's very strong core competencies and the improvement of overall profitability relative to peers. We could lower the ratings on LFG within the next two years if: Operating performance, in terms of returns on assets, revenue, and capital, remains weaker than 'AA-' rated peers'; Competitive positioning erodes in the group's key markets and we believe it will remain weaker than peers'; or Capital adequacy deteriorates to a level that we do not expect will support the ratings on a sustainable basis. We could revise the outlook to

...We expect Lincoln Financial Group (LFG) to remain financially strong, despite recent underperformance compared to peers. Over the past few years, LFG has generated lower returns on both assets and capital relative to its similarly rated peers and our expectations, and this trend could continue through the next two years. Still, we expect the group to maintain '##' capital adequacy per our proprietary risk-based capital (RBC) model over the long-term, reflecting highly effective risk management programs and a strong commitment from management to maintain capital at current levels. If operating performance is sustainably commensurate with lower-rated companies', the rating could be pressured. Lincoln Financial Group's (LFG) competitive edge has softened in the wake of its recent repricing actions. LFG maintains top market positions in several of its products, but 2020 repricing actions--spurred by low interest rates, macroeconomic stress, and the pandemic--took a toll on its profitability....

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