Lincoln National Insurance Company Review
The Lincoln National Corporation has been one of the least stable of American insurers. The company has shifted business strategies at least twice in the last decade. It announced a plan to move out of insurance and into financial services several years ago. Then in 2010, the company changed strategy again and sold some of its assets including its mutual funds to Macquaire Group.
Lincoln was one of the few major American insurers to actively seek federal funds under the Troubled Asset Relief Program (TARP) in 2008. It acquired a bank called the Newton County Savings and Loan just to could qualify for TARP. The need for such funds indicates serious financial instability at Lincoln and a lack of proper business planning.
The company started in Fort Wayne, Indiana, in 1905 as the Lincoln National Life Insurance Company. This firm was organized by local bankers to provide group life and other policies. The company was named for President Abraham Lincoln who grew up in Indiana. The insurer is currently based in Radnor, Pennsylvania where it moved in 1968. Through the years, Lincoln grew quickly through acquisitions.
In 2006 the company merged with Jefferson Pilot Financial and formed the Lincoln Financial Network. It got out of some aspects of the insurance business, such as reinsurance, around that time.
Lincoln National Financial Planning
Currently Lincoln National has a strong focus on financial planning and retirement products. To facilitate this strategy it offers a wide variety of financial planning tools at its website. These tools including a Roth IRA conversion analyzer designed to make rollovers easier. Unfortunately this feature asks investors for potentially sensitive information such as birthdates.A wide variety of financial calculators are also available. It is unclear exactly what these calculators are supposed to be used for or how they would facilitate investment. The calculators require the use of downloaded plug-ins which makes them less accessible.
Despite all of the calculators, the individual products available are confined to annuities, life insurance, retirement plans, long term care policies, and life insurance. As noted above Lincoln has sold its mutual funds division.
Lincoln National Retirement Products
Even though its financial business has been scaled back, Lincoln still has a number of fund based retirement products available. These include plans for businesses such as the Lincoln Alliance. The focus here is definitely on employer provided retirement vehicles.
The Smartfund program gives retirees access to a variety of funds and fiduciary support. The SmartFund appears to be designed for smaller businesses and the self employed. It presumably does this through 408(k) plans and similar products.
The Lincoln Director is a variable annuity plan designed to be used as a company or organization retirement plan. The plan allows investment in a variety of funds through the sub accounts of a variable annuity. This product would presumably be a deferred policy designed for long term savings.
All of the Lincoln retirement plans are available in small business, corporation, and government offerings. Specialized group benefits and executive benefits are also available. Specific information about the variable annuities designed for use as corporate retirement plans does not appear to be available.
Annuity Products
A variety of annuity products are mentioned online including a SPIA and an inflation protected product called the Smart Income. This seems to be an immediate annuity which extra protections against inflation. A wide variety of variable annuities are available.
Lincoln offers a chart of thier annuities and features, but it is confusing and hard to read. The chart was confusing because it emphasized funds used for investment rather than the policies themselves. It also contained dubious information such as day-to-day performance of funds.
Lincoln National Financial Ratings
Lincoln National got slightly below average financial ratings for a major national insurance company. The lower ratings probably stem from the company's acceptance of TARP money and its move to exit the financial business. It has also exposed itself to more risks by entering the consumer banking field.
No financial ratings from after Jan. 1, 2011, are available for Lincoln National. The latest ratings come from December, 2010 but ratings from all of the big financial analysis services are available.
At that time Moody's gave the company an A2, which is its sixth lowest rating. This means the company can meets its obligations but has financial weaknesses in the opinion of Moody's experts.
Fitch gave it A+ or strong which is the fifth lowest grade that analysis company awards. The Fitch experts apparently found some weaknesses at Lincoln National but nothing that could threaten its ability to service customers.
A.M. Best gave Lincoln its second highest rating of superior. This means that the company can meets it obligations. It also indicates that Best's experts felt the company was in better shape than Fitch or Moody's thought.
Standard & Poor's (S&P) gave the insurer a slightly lower rating of AA-, or very strong. This is the fourth lowest grade that S&P gives, it indicates that S&P thinks Lincoln can meet its obligations but could have some long term financial risks.
Although it appears to be more unstable than other insurers and financial companies, Lincoln National does offer an impressive array of financial products. It also offers some good planning services but it could a better job of delivering them. In particular the company could do a better job of providing information about its annuities and in offering calculators and analyzers that are easier to use. Lincoln would be best utilized as a source of group retirement benefits.