US life Q4 2023 earnings: Lincoln sees largest revenue decline

Lincoln National Corp. posted the biggest year-over-year drop in revenue in the fourth quarter of 2023 among the largest publicly traded US life insurers.

The life insurer's total revenue stood at $700 million for the fourth quarter of 2023, representing a steep decline from the $3.84 billion it booked in total revenue in the year-ago period. For the fourth quarter, Lincoln also had the lowest total revenue figure out of the group.

Lincoln reported fourth-quarter 2023 earnings that reflect a net loss of $1.2 billion, or $7.35 per share, a sharp decrease from the fourth quarter of 2022, which resulted in net income of $812 million, or $4.73 per share. Adjusted operating income for the period was $246 million, or $1.45 per share.

During the company's earnings call, CFO Christopher Neczypor announced layoffs totaling 5% of Lincoln's workforce, an effort he said is intended to remove "organizational complexity" and put the insurer on a more "efficient and agile" path.

Lincoln's stock suffered in the week it reported earnings and also underperformed the S&P 500 and peers in 2023 with the worst stock decline over the course of the year among public US life insurers. Lincoln declined to comment.

Mixed revenue results

Top US life insurers broke the trend from the previous two quarters of having majority year-over-year revenue decreases among the group and instead posted mixed results in the fourth quarter of 2023.

MetLife Inc., Prudential Financial Inc. and Jackson Financial Inc. booked the largest year-over-year revenue gains for the fourth quarter of 2023.

Metlife, which added to its asbestos reserves during the fourth quarter as it experienced a new trend in more severe claims, saw its revenue grow to $19.03 billion in the fourth quarter from $15.61 billion a year ago.

Prudential reported fourth-quarter revenue of $15.08 billion, up from $13.43 billion a year earlier, and Jackson had fourth-quarter revenue of $890 million, an uptick from a loss of $2.01 billion in the prior-year period.

Prudential executives said during its earnings call that its commercial real estate portfolio is "holding up quite well." In 2023, the life insurer had $2 billion in scheduled maturities in its portfolio and provided modifications resulting in the offer of longer-term extensions to less than $400 million of those maturities.

Earnings growth split

US life insurers saw an even divide between growth and shrinkage of fourth-quarter earnings when compared to the year-ago period.

Lincoln booked the most substantial year-over-year earnings gain out of the group in the fourth quarter, a feat it also accomplished during the third quarter of 2023. The insurer reported earnings per share of $1.45, an increase from earnings per share of 76 cents in the fourth quarter of 2022.

Meanwhile, Brighthouse Financial experienced the biggest drop in earnings. The insurer logged earnings per share of $2.73 in the fourth quarter of 2023, a large decrease from $7.81 in the fourth quarter of 2022.

Genworth Financial Inc. was the only life insurer in the group to book negative earnings for the fourth quarter of 2023 with a loss in earnings per share of 51 cents.

Genworth completed its annual assumption review in the fourth quarter which resulted in unfavorable impacts in life insurance and long-term care amounting to $227 million, or 50 cents per share. During Genworth's earnings call CEO Thomas McInerney said the insurer was able to obtain "significant" rate increases in one of its long-term care blocks due to efforts made by the National Association of Insurance Commissioners to unify states.