A.M. Best Affirms Ratings of Lincoln National Corporation.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A+ (Superior) of The Lincoln National Life Insurance Company and its subsidiaries--First Penn-Pacific Life Insurance Company (both of Fort Wayne Fort Wayne, city (1990 pop. 173,072), seat of Allen co., NE Ind., where the St. Joseph and St. Marys rivers join to form the Maumee River; inc. 1840. It is the second largest city in the state, a major railroad and shipping point, a wholesale and distribution hub, , IN) and Lincoln Life & Annuity Company of New York New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (Syracuse, NY). Concurrently, A.M. Best has affirmed the issuer credit rating of "a-" and the existing debt ratings of Lincoln National Corporation Lincoln National Corporation (NYSE: LNC) is a holding company, which operates multiple insurance and investment management businesses through subsidiary companies. LNC was organized under the laws of the state of Indiana in 1968, and maintains its principal executive offices (LNC LNC Legal Nurse Consultant LNC Libertarian National Committee LNC Low Noise Converter LNC Lloyd Noble Center (University of Oklahoma, Norman campus) LNC Local Node Clock LNC Chief Legalman (Naval Rating) ) (NYSE NYSE See: New York Stock Exchange : LNC) (Philadelphia, PA). All ratings have a stable outlook. The ratings reflect LNC's strong business profile within the wealth management and asset accumulation markets, its diversified earnings sources, positively trending sales and net asset flows, solid investment performance and sophisticated asset/liability management Asset/Liability Management A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as "surplus management. practices. In recent years, LNC has enjoyed solid growth in its variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. platform and has developed comprehensive financial and risk management practices to address the secondary guarantees associated with these products. A.M. Best believes that LNC's broad product portfolio, encompassing both variable and fixed products, combined with its strategy of targeting the upper income market segment, will result in enhanced persistency and positive earnings momentum. LNC has moderate financial leverage with a total debt-to-capital ratio--including preferreds--of approximately 24% as of September 30, 2004. A.M. Best does not expect LNC's financial leverage to exceed 30% in the near to medium term. LNC's interest coverage at over 10 times is strong and consistent with similarly rated peers. Offsetting these strengths is LNC's high percentage of liabilities at guaranteed minimum rates, narrowing spreads (after adjusting for mortgage prepayments and bond makewhole provisions), the anticipated need for Regulation XXX and AXXX funding solutions and an earnings profile, which is subject to volatility due to its high correlation to the equity markets. A.M. Best also notes that LNC's statutory capitalization, on a risk-adjusted basis, is somewhat below similarly rated peers. Additionally, LNC's balance sheet reflects a modestly elevated level of intangibles relative to its consolidated GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). capital base. For a complete listing of Lincoln National Corporation's debt and financial strength ratings, please visit http://www.ambest.com/press/111901lincolnnational.pdf. For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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