AM Best confirms credit ratings of Lincoln National Corporation and its subsidiaries

OLDWICK, NJ–(BUSINESS WIRE)–AM Best Affirmed Lincoln National Life its wholly-owned subsidiary, Lincoln Life & Annuity Company of New York (Syracuse, NY). These companies are the principal health insurance subsidiaries of Lincoln National Corporation (LNC) (headquartered in Radnor, Pennsylvania) and are collectively known as Lincoln Financial Insurance Group (Lincoln).

In addition, AM Best confirmed the FSR of A (Excellent) and the long-term ICR of “a+” (Excellent) of First Penn-Pacific Life Insurance Company (FPP). At the same time, AM Best affirmed the long-term ICR of “a-” (Excellent) and the long-term and short-term issue credit ratings (long-term ICR; short-term IR) of LNC. The outlook for these Credit Ratings (ratings) is stable. All companies are domiciled in Fort Wayne, IN, unless otherwise noted. (Please see below for a detailed list of long and short term IRs.)

Lincoln’s ratings reflect the strength of its balance sheet, which AM Best rates as very strong, as well as its strong operating performance, favorable business profile and very strong business risk management. Lincoln’s risk-adjusted capital is considered strong, as measured by Best’s Capital Adequacy Ratio (BCAR). Although Lincoln has increased its level of capital during the reporting period, it is constrained by dividend payments to the parent company to fund shareholder dividends and share buybacks. AM Best’s view of the company’s capital is somewhat tempered due to its reliance on captives and external reinsurance for its XXX and AXXX reserves. These factors are mitigated by Lincoln’s diverse and high-quality general account portfolio, which is managed by internal and external portfolio managers. The portfolio grew and performed reasonably well during the year. In addition, financial and operating leverage metrics, as well as strong interest coverage, are in line with ratings guidelines. At the holding company level, LNC maintains significant balance sheet liquidity with additional financial flexibility through its access to capital markets.

Operating profit in 2021 was favorable on a GAAP basis. Lincoln reported net income of $1.41 billion, compared to approximately $500 million in 2020. Additionally, Lincoln saw growth in all product segments except group life insurance, as the segment was impacted by unfavorable mortality related to COVID-19. Lincoln’s diverse product offerings and ability to launch consumer-centric products allow the company to maintain strong positions in its core markets.

FPP’s ratings reflect the strength of its balance sheet, which AM Best rates as very strong, as well as its adequate operating performance, limited business profile and very strong business risk management. The subsidiary achieves the expected performance and corresponds to the profile of a company in run-off.

The following long-term IRs have been awarded with a stable outlook:

National Lincoln Society—

— “bbb+” (good) on $562,034,000 million LIBOR + 236 bps subordinated notes, due 2066

— “bbb+” (good) on $432,743,000 million LIBOR + 204 bps subordinated notes, due 2067

The following long-term IRs have been confirmed with a stable outlook:

National Lincoln Society—

— “a-” (Excellent) on $500 million 4.00% senior unsecured notes due 2023

— “a-” (Excellent) on $300 million 3.35% senior unsecured notes, due 2025

— “a-” (Excellent) on $400 million 3.625% senior unsecured notes, due 2026

— “a-” (Excellent) on $500 million 3.8% senior unsecured notes, due 2028

— “a-” (Excellent) on $500 million 3.05% senior unsecured notes due 2030

— “a-” (Excellent) on $500 million 3.40% senior unsecured notes, due 2031

— “a-” (Excellent) on $300 million 3.40% senior unsecured notes, due 2032

— “a-” (Excellent) on $500 million 6.15% senior unsecured notes due 2036 ($243 million outstanding)

— “a-” (Excellent) on $375 million 6.30% senior unsecured notes, due 2037

— “a-” (Excellent) on $500 million 7.00% senior unsecured notes, due 2040

— “a-” (Excellent) on $450 million 4.35% senior unsecured notes, due 2048

— “a-” (Excellent) on $300 million 4.375% senior unsecured notes, due 2050

— “bbb” (good) on LIBOR of $800 million + 236 bps of senior subordinated capital notes, due 2066 (outstanding $160 million)

— “bbb” (good) on LIBOR of $500 million + 204 bps of junior subordinated equity securities, due 2067 (outstanding $58 million)

The following short-term IR has been confirmed:

National Lincoln Society—

— AMB-1 (outstanding) on ​​commercial paper

The following indicative long-term IRs on securities available under universal registration have been confirmed with a stable outlook:

National Lincoln Society—

— “a-” (Excellent) on senior unsecured notes

— “bbb+” (good) on subordinate notes

— “bbb” (good) on preferred stock

— “bbb” (Good) on junior subordinated securities

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For more information on the use and limitations of credit rating opinions, please see Best’s Guide to Credit Ratings. For more information on the proper use of Best’s Credit Scores, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see the Guide to Proper Use of Best’s Best ratings and reviews.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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