Lincoln Reports Lower Net Earnings But Bigger Life Profits

By Staff Writer

October 23, 2001 at 08:00 PM

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NU Online News Service, Oct. 23, 1:08 p.m. – Lincoln National Corp., Fort Wayne, Ind., is reporting $119 million in net income for the third quarter on $1.6 billion in revenue, down from $139 million in net income on $1.7 billion in revenue for the third quarter of 2000.

Operating income, which excludes $24 million in losses on investments that were sold or re-valued during the quarter, fell to $143 million, from $191 million.

Both the net income figure and the operating income figure include $33 million in unusual charges resulting from the Sept. 11 attacks, Lincoln says.

Lincoln says it was especially happy with the performance of its life insurance and annuity units.

Including the effects of investment gains and losses, the life unit generated $76 million in operating income for the quarter on $461 million in revenue, up from $72 million in net income on $453 million in revenue. Operating income was up 5%, and revenue was up 1.6%.

A universal life product with a long-term care rider sold especially well, the company says.

At the annuity unit, net income fell 30%, to $73 million on $478 million in revenue.

The total account balance for variable annuities fell to $31 billion Sept. 30, down 29% from Sept. 30, 2000.

But the drop in annuity income and annuity balances was due mainly to the stock market slump, and investors actually put $1.3 billion more cash in Lincoln annuities during the quarter than they took out, according to figures from Lincoln.

"Lincoln Annuities reached positive net flows for the first time since the second quarter of 1997, ahead of our fourth quarter 2001 goal," Lincoln Chairman Jon Boscia says.

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