Lincoln Financial Group Announces Reinsurance Transaction With Resolution Life and Significant Capital Deployment
17 Settembre 2021 - 3:00PM
Business Wire
- Transaction will generate approximately $1.2 billion in
capital
- Approximately $900 million of proceeds to be used for
incremental share repurchases and the remainder expected to be used
primarily to pay down debt
- Transaction expected to be approximately 5% accretive to
adjusted operating EPS
Lincoln Financial Group (NYSE: LNC) today announced it has
entered into an agreement with Security Life of Denver Insurance
Company, a subsidiary of Resolution Life, to reinsure approximately
$9.4 billion of in-force executive benefit and universal life
reserves. The transaction will generate approximately $1.2 billion
of capital. The proceeds will predominantly be used to fund
incremental share repurchases of approximately $900 million that we
expect to be completed by the end of the first quarter of 2022. The
remaining proceeds will be used for general corporate uses,
primarily paying down debt. The transaction is expected to be
approximately 5% accretive to Lincoln Financial's adjusted
operating earnings per share and expand ROE in 2022.
“We are pleased to announce this transaction, which we expect to
be highly accretive to EPS, expand ROE and maintain our overall
high-quality business mix,” said Dennis R. Glass, president and CEO
of Lincoln Financial Group. “We will continue to pursue
opportunities to build additional shareholder value above our core
strategy that is the basis for our long-term 8-10% growth
expectations.”
Under the terms of the reinsurance agreement, Lincoln Financial
will retain account administration and recordkeeping of the
policies. The transaction will have no impact on Lincoln
Financial’s relationship with, or commitments to, its distribution
partners and policyholders. Additionally, Lincoln Financial remains
focused on the continued growth of its Life Insurance business,
including the sales of individual life insurance and executive
benefits products.
The agreement is dated September 17, 2021, with an effective
date of October 1, 2021. Closing of the transaction is subject to
usual and customary closing conditions, but there are no regulatory
approvals required to close the deal. The transaction is structured
as a coinsurance treaty for the general account reserves and as a
modified coinsurance treaty for the separate account reserves, with
counterparty protections including a comfort trust and investment
guidelines to meet Lincoln Financial’s risk management
objectives.
Lazard acted as financial advisor and Sidley Austin LLP served
as legal advisor to Lincoln Financial.
Conference Call
Lincoln Financial Group will host a conference call this
morning, September 17, 2021, at 10:00 a.m. Eastern Time to discuss
the details of this transaction.
Webcast Participants
The conference call will be broadcast live through the company
website at www.lfg.com/webcast. Please log on at least fifteen
minutes prior to the call to register and download any necessary
streaming media software.
Phone/Question and Answer Session
Participants
Due to changes implemented by our conference call provider, you
must now pre-register to participate via phone at
www.directeventreg.com/registration/event/2871028. You will receive
a confirmation email that includes a dial-in number and unique
Registrant ID. For security purposes, please do not share your
Registrant ID.
Replay
A replay of the call will be available by 1:00 p.m. Eastern Time
on September 17, 2021, through 12:00 p.m. Eastern Time on September
23, 2021. To access the re-broadcast, dial: (855) 859-2056
(Domestic) or (404) 537-3406 (International). Enter conference code
2871028.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help
people take charge of their financial lives with confidence and
optimism. Today, more than 17 million customers trust our
retirement, insurance and wealth protection expertise to help
address their lifestyle, savings and income goals, and guard
against long-term care expenses. Headquartered in Radnor,
Pennsylvania, Lincoln Financial Group is the marketing name for
Lincoln National Corporation (NYSE:LNC) and its affiliates. The
company had $324 billion in end-of-period account values as of June
30, 2021. Lincoln Financial Group is a committed corporate citizen
included on major sustainability indices including the Dow Jones
Sustainability Index North America and FTSE4Good. Dedicated to
diversity and inclusion, we earned perfect 100 percent scores on
the Corporate Equality Index and the Disability Equality Index, and
rank among Forbes’ Best Large Employers and Best Employers for
Women, and Newsweek’s Most Responsible Companies. Learn more at:
www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn,
and Instagram. Sign up for email alerts at
http://newsroom.lfg.com.
Forward-Looking Statements – Cautionary Language
Certain statements made in this press release are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 (“PSLRA”). A
forward-looking statement is a statement that is not a historical
fact and, without limitation, includes any statement that may
predict, forecast, indicate or imply future results, performance or
achievements. Forward-looking statements may contain words like:
“anticipate,” “believe,” “estimate,” “expect,” “project,” “shall,”
“will” and other words or phrases with similar meaning in
connection with a discussion of future operating or financial
performance. In particular, these include statements relating to
future actions, performance or financial results, including the
closing of the transaction, the use of the transaction proceeds to
fund share repurchases and paydown debt, and the timing thereof,
the continued growth of our businesses, including our long-term
growth expectations, and the expectation that the transaction will
be approximately 5% accretive to Lincoln Financial's adjusted
operating earnings per share and expand ROE in 2022. Our most
recent Annual Report on Form 10-K, as well as other reports that we
file with the SEC, include risk factors that could affect our
future actions, businesses and financial performance and results.
Moreover, we operate in a rapidly changing and competitive
environment. New risk factors emerge from time to time, and it is
not possible for management to predict all such risk factors or to
assess the effect of all risk factors on our businesses or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. Given these risks and uncertainties,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. In addition, we
disclaim any obligation to update any forward-looking statements to
reflect events or circumstances that occur after the date of this
press release.
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version on businesswire.com: https://www.businesswire.com/news/home/20210917005299/en/
Al Copersino (203) 257-4493 Investor Relations
InvestorRelations@LFG.com
Jay Russo (860) 463-5618 Media Relations Jay.Russo@LFG.com
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