LNC Q2 Earnings Beat Estimates on Higher Investment Gains, Lower Costs

The quarterly earnings were supported by higher net investment income and lower expenses. Improved profitability in the Life Insurance and Retirement Plan Services segments also contributed to the upside. Nevertheless, these gains were partly offset by lower sales in the Annuities and Group Protection segments.

Lincoln National Corporation Price, Consensus and EPS Surprise

Key Takeaways From LNC’s Q2 Results

LNC's estimated RBC ratio remained above 420% at the end of the reported quarter.

Insurance premiums inched up 2% year over year to $1.7 billion, marginally missing the Zacks Consensus Estimate by 0.01%.

Fee income was $1.4 billion, which improved 4.3% year over year but missed the consensus mark by 0.4%. Net investment income advanced 10.5% year over year to $1.6 billion and beat the consensus mark by 10.8%.

Meanwhile, other revenues of $202 million rose 9.8% year over year in the quarter under review.

Total expenses declined 9.3% year over year to $2.9 billion. Interest credited rose 11.8% year over year to $1 billion.

Lincoln National reported net income of $1.3 billion, up 90.6% year over year from $699 million.

Lincoln National’s Segmental Performances

The Annuities and Life Insurance segments form part of LNC’s Retail Solutions business, while Group Protection and Retirement Plan Services units make up the Workplace Solutions business.

The Annuities segment's operating income totaled $287 million, flat year over year, and missed the Zacks Consensus Estimate by 2.6%. Favorable equity markets and higher spread income were partly offset by variable annuity outflows and the $12 million impact of the previously disclosed net investment income reallocation to non-operating income. The segment's operating revenues increased 10.5% year over year to $1.3 billion. Total annuity deposits were $3.5 billion, which fell 12.5% year over year.

The Life Insurance segment recorded operating income of $57 million, which improved from $32 million in the prior-year quarter and beat the Zacks Consensus Estimate of $26.7 million. The increase was driven by favorable mortality, partly offset by lower alternative investment income. Operating revenues declined 1.9% year over year to $1.6 billion. Total Life Insurance sales of $216 million advanced 78.5% year over year. Total deposits grew 30.6% year over year to $1.7 billion.

The Group Protection segment's operating income decreased 15% year over year to $147 million but beat the Zacks Consensus Estimate of $142 million. Operating revenues increased 2.5% year over year to $1.6 billion, driven by a 2.5% rise in insurance premiums. Sales of $155 million declined 17.1% year over year.

The Retirement Plan Services segment recorded operating income of $49 million, which grew 32.4% year over year and outpaced the Zacks Consensus Estimate of $44.1 million. The increase was driven by spread expansion and favorable equity markets. Operating revenues increased 6.6% year over year to $353 million. Total deposits rose 4% year over year to $3.7 billion.

Other Operations reported an operating loss of $90 million, narrower than the prior-year quarter's loss of $91 million and better than the Zacks Consensus Estimate of a loss of $93.7 million.

Lincoln National’s Q2 Financial Update

Lincoln National exited the second quarter with cash and invested cash of $10.2 billion, up from $9.5 billion as of 2025-end. Total assets increased to $429.8 billion from $417.2 billion as of 2025-end.

Long-term debt rose to $6.5 billion from $5.9 billion as of Dec. 31, 2025.

Total stockholders' equity increased to $11.3 billion from $10.9 billion as of 2025-end.

Book value per share, excluding accumulated other comprehensive income (AOCI), was $77.39, up from $73.10 as of 2025-end. Adjusted income from operations ROE declined 130 basis points year over year to 11.6%.

LNC’s Dividend Update

Lincoln National paid quarterly common dividends of $86 million, up 11.7% from the prior-year quarter’s level.

LNC’s 2026 Outlook

Management had earlier projected that the Annuities, Life Insurance, Group Protection and Retirement Plan Services units would account for 58-60%, 8-9%, 24-25% and 8-9%, respectively, of the company's total operating income in 2026.

Management had earlier projected an RBC ratio of more than 420% in 2026 and over the long term.

LNC’s Zacks Rank

LNC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did LNC’s Peers Perform?

Several companies in the insurance space, including Aon plc AON, RenaissanceRe Holdings Ltd. RNR and AMERISAFE, Inc. AMSF, have already reported their financial results for the June quarter of 2026. Here’s how they have performed:

Aon reported second-quarter 2026 adjusted earnings of $3.81 per share, which surpassed the Zacks Consensus Estimate by 1.1%. The bottom line advanced 9% year over year. Aon’s total revenues of $4.2 billion grew 2% year over year.  The top line missed the consensus mark by 0.4%. Organic revenue growth was 5%. The quarterly results were supported by strong organic revenue growth, healthy client retention, operating margin expansion and disciplined execution. Solid performance across the Commercial Risk, Reinsurance and Health Solutions businesses was partly offset by weakness in Wealth Solutions.

RenaissanceRe reported second-quarter 2026 operating income of $12.92 per share, which surpassed the Zacks Consensus Estimate by 12.9%.  The bottom line also improved 5.1% year over year.  RNR’s total operating revenues declined 6.7% year over year to $2.64 billion. The top line missed the consensus mark by 1%. The quarterly earnings benefited from lower expenses, higher net investment income and an improved total combined ratio. However, the upside was partly offset by lower net premiums earned, weaker underwriting results in the Casualty & Specialty segment and lower fee income.

AMERISAFE reported second-quarter adjusted earnings per share of 44 cents, which missed the Zacks Consensus Estimate by 17%. The bottom line declined 17% year over year.  Operating revenues increased 10.3% year over year to $83.95 million and topped the Zacks Consensus Estimate by 1%. AMERISAFE’s quarterly results were affected by higher expenses and weaker underwriting margins, with additional pressure from lower investment income. Strong premium growth partly offset these headwinds.

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