Lincoln National Corporation

Thank you. Good morning, everyone, and welcome to our fourth quarter and full year earnings call. We appreciate your interest in Lincoln. A quarterly earnings press release, earnings supplement, and statistical supplement can all be found on the investor relations page of our website, www.lincolnfinancial.com. These documents include reconciliations of the non gap measures used on today's call, including adjusted income from operations or adjusted operating income, adjusted income from operations available to common stockholders and free cash flow to their most comparable gap measures. Before we begin, I want to remind you that any statements made during today's call regarding expectations, future actions, trends in our business, prospective services or products, future performance or financial results, including those relating to deposits, expenses, income from operations, share repurchases, liquidity and capital resources, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from our current expectations. These risks and uncertainties include those described in the cautionary statement disclosures in our earnings release issued earlier this morning, as well as those detailed in our 2023 annual report on Form 10-K, most recent quarterly reports on Form 10-Q, and from time to time in our other filings with the SEC. These forward-looking statements are made only as of today, and we undertake no obligation to update or revise any of them to reflect events or circumstances that occur after today. Presenting this morning are Ellen Cooper, Chairman, President, and CEO, and Chris Nezapor, Chief Financial Officer. After their prepared remarks, we'll address your questions. Let me now turn the call over to Ellen. Ellen?

Thank you, Tina, and good morning, everyone. Thank you for joining our call today. I want to start by taking a moment to reflect on our significant progress in 2024 to further position Lincoln for sustained long-term value creation. We delivered strong results with full year adjusted operating income increasing to its highest level in three years. We outperformed relative to the financial objectives we established last year and built substantial momentum across our businesses, further increasing our confidence in our longer term outlook. We also successfully advanced our strategy, which is anchored upon three objectives. build a strong capital foundation to ensure enterprise stability across market cycles and support investment for future growth optimize our operating model to advance a scalable framework to maximize our resources and deliver profitable growth to improve free cash flow and expand the franchise Last year, we communicated our goal to build and maintain an RBC ratio of 420%, a 20-point buffer over our 400% RBC target as we continue to take the necessary steps to strengthen our capital base. We closed on the sale of our wealth management business in the second quarter and increased our capital position throughout the year, ending 2024 with an estimated RBC ratio of over 430%. This is an important milestone and provides us with added financial flexibility as we continue repositioning our business for future growth and profitability. We also made meaningful headway in optimizing our operating model. We took targeted actions to reduce expenses across the enterprise while investing in the operations, technology, and talent needed to build the infrastructure for growth and elevate the customer experience in each of our businesses. We further enhanced our investment strategy and launched a Bermuda-based reinsurance subsidiary to support our financial objectives and increase our free cash flow over time. Lastly, we advanced on our objective of delivering profitable growth. We grew our group business across products and market segments while prioritizing profitability over top-line growth, evolved our annuity business to a more balanced mix with a higher proportion of spread-based products, repositioned our life business by optimizing our product portfolio and realigning our distribution model, and built upon the products and capabilities of our retirement business. Since embarking on our multi-year journey to transform Lincoln, we have demonstrated substantial progress as we evolve into an organization characterized by businesses, market segments, and products with more stable cash flows and higher risk adjusted returns. Now turning to our fourth quarter and full year results, which reflected strong execution of our strategic priorities. Key highlights at the segment level included our group protection business delivering a record fourth quarter with earnings more than doubling year over year and a margin of 8.4% and a record year for sales, earnings, and margin. Annuities also delivered excellent results, generating robust earnings growth for the quarter and full year and its highest full year sales in five years. Retirement plan services increased quarterly earnings by 13% year over year and generated full year deposit growth of 25%, driving its 10th consecutive year of positive flows. While our life insurance sales were essentially unchanged sequentially, we continue to expand our presence in the addressable markets for accumulation and protection products with more risk sharing. Now turning to our business results, starting with retail solutions, which includes annuities and life insurance. We continue to strengthen our annuities business, positioning it for additional growth by emphasizing a more diversified product mix. We are a leader in this market and offer a broad set of products in both fixed and variable annuities. This is a key competitive strength, enabling us to be a holistic solutions provider that can adapt the customer preferences in various market environments. Total annuity sales of $3.7 billion in the fourth quarter capped a strong year in which full-year sales increased 7% compared to the prior year and, as I mentioned earlier, reached the highest level since 2019. Our diversified product mix supported this result with approximately two-thirds of full-year sales attributable to spread-based products. Additionally, all product categories supported our profitable growth goals by meeting or exceeding their risk-adjusted return and capital efficiency objectives. Our Ryla sales increased for both the quarter and the full year as we maintained a strong competitive position in this market, and our second-generation Ryla product resonated with customers. While our fixed annuity sales in the quarter were lower than the record prior year quarter, we are pleased with our full year sales level of $4.2 billion. We plan to continue leveraging the capabilities we built to sustain a consistent, competitive presence in the fixed marketplace, including investment strategy optimization and distribution expansion. We also expect to bolster our fixed products by utilizing our new Bermuda Reinsurance Affiliate. Finally, our traditional variable annuity sales nearly doubled year over year as our product offerings, coupled with the favorable market environment, supported sales growth in variable products with and without guaranteed living benefits. Variable annuities remain integral to our overall product suite, producing strong risk-adjusted returns while delivering a compelling customer value proposition. In summary, annuities delivered robust results in 2024 for the quarter and the year, and we continue to diversify the product mix. Looking ahead, our strategic focus on further optimizing our investment strategy, leveraging capital-efficient reinsurance solutions to accelerate spread-based product growth, and driving greater expense efficiencies positions this business for continued strength and success. Now turning to life insurance. Last year was one of substantial transition for our life business. As I previously mentioned, we are refocusing this business to deliver accumulation and protection products with more risk sharing. We are currently in these markets today and have been building out additional product features to expand our solution set and position us for future profitable growth. Additionally, we realigned our life distribution team to optimize our wholesaler footprint, which will support the acceleration of our product shift over time. While we made solid progress in 2024, the impact of our actions will take time to be fully reflected in our results. We are confident that leveraging our product distribution and underwriting strengths while investing in our customer centric service model and optimizing our expense efficiency will increase our competitive differentiation and drive higher earnings growth over time. Next, turning to workplace solutions, which includes our group protection and retirement plan services businesses. Group had another excellent quarter, more than doubling its earnings and margin over the prior year quarter. For the full year, the earnings and margin of this business were well ahead of our expectations, with earnings increasing by more than 50% and the margin by 280 basis points when excluding the impact of the annual assumption review. Over the past year, we have substantially advanced this business. We executed our strategy to grow profitably with a targeted segment strategy to rebuild our local market presence and sustain our leadership in the national and regional markets. We also made meaningful investments in our operations, technology, and talent to enhance our customer experience and began to see the benefits of those investments in the results of the business. In what is typically group's highest sales quarter of the year, sales increased 17% year over year, achieving a new fourth quarter record. And for the full year, sales were up 24%. These results reflected disciplined execution of our objective to produce a well proportioned mix among our products and target segments supported by an increase in lines of coverage sold. We also delivered additional growth in supplemental health with annual sales increasing 35% year over year and contributing to a more balanced and diversified book of business. Premium growth was up 3% for the full year, driven by the execution of our pricing strategies for new business and renewals to support our margin expansion efforts. As we reflect on our success in our group business in 2024, we also continue to benefit from our industry leaving position in disability as our solutions oriented approach and strong customer value proposition in leave management differentiate us competitively in this space. We also made substantial progress over the last year to tailor our strategy to each segment and delivered margin improvement in all three market segments. In our local market segment, we invested in transforming our operating model and product portfolio to support customer expectations for ease and access. In our regional segment, we expanded our technology and service capabilities to support our partnerships with strategic broker relationships. In our national segment, where we are a market leader, we leveraged our disability and leave expertise, continued to enhance our voluntary products, such as supplemental health, and provided customer engagement tools and processes to further differentiate our value proposition and generate profitable growth. In summary, Group's performance this year exceeded our expectations, driven by broad-based execution to deliver profitable growth and supported by an ongoing favorable macro backdrop. As we continue executing our targeted segment and product strategies, we expect our Group business to become a larger and more profitable contributor to our overall earnings mix over time. Now turning to retirement plan services or RPS. RPS had a solid quarter with earnings growth of 13% year over year and continued new business momentum driving a 46% increase in first year sales. For the full year, first year sales grew by nearly 70% and total deposits were up 25%. As mentioned in last quarter's remarks, several known plan terminations impacted fourth quarter flows. However, RPS delivered a 10th consecutive year of positive net flows. Throughout 2024, we executed our strategy to generate profitable sales growth by further differentiating RPS and the retirement marketplace. We are focused on solving the needs of all our customers, whether they are employers, participants, or our intermediary partners. We've enhanced our service offerings, expanded the breadth of our product solutions with recent innovations, and partnered to broaden our financial wellness suite to meet the needs of our customers. We also increased our efficiency by optimizing our operating model, allowing us to accelerate sales growth while supporting earnings growth. In closing, we achieved strong results in 2024 that were ahead of our expectations. We demonstrated our continued momentum to build a solid capital foundation, increase operational efficiency, and deliver profitable growth, positioning Lincoln for long-term value creation. Our success to date increases our confidence in achieving our longer-term financial and strategic objectives as you will hear from chris shortly the strength of our broad-based execution sets the stage for future advancement in positioning lincoln for sustained profitable growth we will continue to leverage our competitive advantages including our powerful franchise distribution leadership broad product portfolio and trusted brand to serve our customers and build for the future. We look forward to updating you on our continued progress. With that, I will hand the call over to Chris.

Thank you, Ellen, and good morning, everyone.