The counterparty credit rating on Lincoln National Corp. (LNC) is based on the company's strong, diversified cash flows from its well-positioned businesses, top-tier market positions in its key insurance segments, and extremely strong capitalization at both the operating companies and the holding company. Adding to these strengths, given its acquisition in April 2006 of the Jefferson Pilot Companies (JP), the Lincoln Financial Group (LFG) brings a greater diversity of regulated and unregulated cash flows, a stronger presence in key markets, and the addition of well-capitalized operating companies. Offsetting these strengths are the challenge to maintain a sustainable position in the highly competitive high-net-worth individual life and annuity markets and cash flow volatility from variable products that have equity market exposure.
