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Lincoln National Cost Management Impresses Amid Low Rates


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On Sep 26, 2016, we issued an updated research report on Lincoln National Corporation (LNC - Analyst Report) .

Lincoln National’s Life and Annuity businesses have been outperforming over the past few years. Of late, the insurer has been focusing on the inclusion of more Life products without long-term guarantees in its business mix. In order to minimize the risk exposure associated with higher debt charges and equity market volatility, the company has been curtailing the sale of longer dated products.

The integration of manufacturing and distribution services is likely to further bolster the company’s long-term growth potentials. Lincoln National is also been developing new pricing strategies.

Given that the persistently low interest rates have decelerated revenue growth, most insurers have taken to reducing expenses as a means to drive margin improvement. Several companies like Health Insurance Innovations Inc (HIIQ - Snapshot Report) , ING Groep N.V (ING - Snapshot Report) , Primerica Inc. (PRI - Snapshot Report) have already adopted this strategy and Lincoln National is no exception.

Lincoln National has been building and maintaining a strong capital base by diversifying balance sheet risks through strong asset and liability management practices. The company executes efficient capital management to increase shareholders’ value through share buybacks, dividend payments as well as investments for growth opportunities at attractive returns.

However, the company's Group Protection segment has been underperforming in recent years due to increasing competition. As a result, the company has been witnessing a significant decline in sales volume in both 2014 and 2015. Nonetheless, the metric improved nominally in 2016.

This Philadelphia-based, well diversified life insurance and investment Management Company presently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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