After incurring a $2.6 billion third-quarter net loss, Lincoln Financial aims to rebuild capital by increasing sales of products that can generate the most profits per dollar of capital, according to ThinkAdvisor
The company told analysts that it plans to increase capital levels by cutting costs and reducing its exposure to what it calls benefits guarantee risk. The company also is seeking to make reinsurance deals.
So far, the rebuilding effort has begun with a reduction in spending. The company is working on cutting costs by $260 million to $300 million per year by late 2024. The company also intends to improve capital efficiency by repricing products, shifting products to leaner guarantees, improving hedging, and focusing on capital efficiency when deciding how to allocate capital to sales of new products. Additionally, Lincoln will continue to pay shareholder dividends but has stopped buying back shares of its own stock.
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