Lincoln Financial Feels COVID-19 Mortality Sting

Lincoln Financial says COVID-19 caused a noticeable effect on benefits costs at its individual life insurance and group insurance units in the fourth quarter of 2020.

The pandemic contributed to life claims increasing 19% between the fourth quarter of 2019 and the latest quarter, to $1.1 billion.

At the group insurance operation, benefits costs increased 20%, to $920 million.

(Related: Principal Sees COVID-19 Impacting Earnings)

But Dennis Glass, chief executive officer of the Radnor, Pennsylvania-based life insurer, said that operating revenue rose and expense ratios fell throughout the company.

“Though the pandemic continues to impact our financial results, the health and economic environment is showing signs of improvement,” Glass said.

Lincoln National Corp. (NYSE: LNC)

Lincoln Financial — which is officially known as Lincoln National Corp. — is reporting $143 million in net income for the fourth quarter of 2020 on $4.1 billion in revenue, compared with $430 million in net income on $4.3 billion in revenue for the fourth quarter of 2019.

Lincoln’s annuities unit is reporting $338 million in pre-tax operating income on $1.2 billion in operating revenue, up from $312 million in pre-tax operating income on $1.2 billion in revenue for the year-earlier quarter.

Commissions incurred fell to $255 million, from $322 million.

Here’s what happened to deposits into the two major classes of annuities between the fourth quarter of 2019 and the latest quarter:

• Fixed Annuities: $82 million (down from $1.2 billion)
• Variable Annuities: $2.4 billion (up from $2.7 billion)

Lincoln’s life unit is reporting a $57 million pre-tax operating loss on $1.9 billion in operating revenue, compared with a $54 million pre-tax operating loss on $1.8 billion in operating revenue for the year-earlier quarter.

Commissions incurred fell to $152 million, from $337 million.

Here’s what happened to first-year premiums for some types of life products between the fourth quarter of 2019 and the latest quarter:

• Universal Life: $3 million (down from $20 million)
• Indexed Universal Life: $22 million (down from $76 million)
• Variable Universal Life: $30 million (down from $107 million)
• MoneyGuard: $22 million (down from $124 million)
• Term Life: $32 million (down from $39 million)

Here’s what happened t sales for some types of benefits products:

• Group Life: $144 million (up from $108 million)
• Group Disability: $291 million ( up from $140 million)
• Group Dental: $15 million (down from $49 million)

In other earnings news:

Globe Life Inc. (NYSE:GL)

Globe Life is reporting $204 million in net income for the fourth quarter of 2020 on $1.2 billion in revenue, up from $187 million in net income on $1.1 billion in revenue for the fourth quarter of 2019.

Here’s what happened to premium revenue for the company’s three main lines of business:

• Life Insurance: $678 million (up from $631 million)
• Health Insurance: $290 million (up from $275 million)

Here’s what happened to new net sales:

• Life Insurance: $131 million (up from $107 million)
• Health Insurance: $57 million (down from $64 million)

Net life insurance benefits obligations increased 43%, to $291 billion.

Globe Life sells through a traditional agent sales network as well as through direct-to-consumer programs.

The total number of agents increased 21% between the fourth quarter of 2019 and the end of the latest quarter, to 13,897. The number of new agents increased 26%, to 9,887.

The number of renewal year agents who stuck with Globe Life increased 10%, to 3,4010.