AM Best Comments on Credit Ratings of Lincoln National Corporation and Its Subsidiaries Following Announced Reinsurance Agreement

AM Best has commented that the Credit Ratings of Lincoln National Corporation (Lincoln) (headquartered in Radnor, PA) [NYSE: LNC] and its insurance subsidiaries remain unchanged following the Dec. 10, 2018, announcement of a reinsurance agreement with a subsidiary of Athene Holding Ltd. (Athene).

Under the terms of the agreement, Lincoln will cede approximately $7.7 billion of fixed and fixed indexed annuity products to Athene, but will continue to administer the policies. The ceding commission received and release of required capital are expected to be used primarily as part of the organization’s share buyback program.

AM Best notes that the transaction, while sizable, has a modest impact to Lincoln’s overall financial position and risk profile. A portion of the freed-up required capital will be retained to support risk-adjusted capital and minimize the increase in reinsurance leverage. Additionally, the reduction in near-term run-rate earnings is offset largely by earnings from its acquisition of Liberty Life Assurance Company of Boston’s group business, which was completed in 2018. Going forward, AM Best expects continued growth in annuities commensurate with Lincoln’s stated risk appetite.

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 pertinent 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 additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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