Lincoln National Corporation (NYSE:LNC) Q1 2020 Earnings Conference Call - Final Transcript

May 07, 2020 • 10:00 am ET

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Lincoln National Corporation (NYSE:LNC) Q1 2020 Earnings Conference Call - Final Transcript

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Executive
Randy Freitag

to capture all the capital we generate in a given year. For instance, in 2019, we returned $938 million of capital to shareholders including $640 million in buybacks. However, we allocated an additional $1.7 billion of capital to the production of new business.

As Dennis noted, we expect sales to decrease as we reprice business for the current environment combined with disruption from COVID-19 and the weaker. As a result I expect the amount of capital that we allocate to new business will be lower by approximately $400 million in 2020. Turning to our expectations for buybacks. We have made the decision to temporarily halt buybacks considering the events of the past few months. Now that is not an announcement about anything beyond the second quarter. We will assess and reassess as time goes on and resume buybacks when it is prudent to do so.

In the meantime, we are focused on achieving the three primary goals we defined in our stress test and for all the reasons I have described based on what we know today, I am very confident in our ability to achieve those goals. So to conclude we had a solid first quarter with mid single-digit revenue and EPS growth and a 13.5% ROE. The impact of COVID-19 are primarily a near-term earnings headwind. And with a strong RBC ratio, significantly lower expectations for reserve strengthening in a low rate environment and the actions we have taken and will take, the balance sheet is in a good position to manage the stressful environment we are currently in.

With that, let me turn the call back over to Chris.

Executive
Chris Giovanni

Thank you Dennis and Randy. We will now begin the question and answer portion of the call. [Operator Instructions]

With that, let me turn the call back to operator.