Best’s News & Research Service - March 13, 2026 04:20 PM (EDT)
AM Best Affirms Credit Ratings of Lincoln National Corporation and Its Subsidiaries
- March 13, 2026 04:20 PM (EDT)
//BestWire// - AM Best has affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “a+” (Excellent) of The Lincoln National Life Insurance Company (Fort Wayne, IN) and its wholly owned subsidiary, Lincoln Life & Annuity Company of New York (Syracuse, NY). These companies are the key life/annuity insurance subsidiaries of Lincoln National Corporation (LNC) (headquartered in Radnor, PA) and are referred to collectively as Lincoln Financial Insurance Group (Lincoln). Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a” (Excellent) of First Penn-Pacific Life Insurance Company (FPP) (Fort Wayne, IN), a wholly owned subsidiary of LNC in run-off. Lastly, AM Best has affirmed the Long-Term ICR of “bbb+” (Good) and the Long- and Short-Term Issue Credit Ratings (Long-Term IR; Short-Term IR) of securities issued by LNC, the ultimate holding company. The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed listing of the Long- and Short-Term IRs.)
The ratings reflect Lincoln’s balance sheet strength, which AM Best assesses as strong, as well as its strong operating performance, favorable business profile and appropriate enterprise risk management (ERM).
The ratings of FPP reflect its balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, limited business profile and appropriate ERM. The ratings of FPP also reflect implicit support from the greater organization.
The rating affirmations reflect a continuation of Lincoln’s rebuild of its level of consolidated risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), driven by very strong capitalization of its two primary U.S. registered insurers and growth in the group’s adjusted GAAP equity, which includes its onshore captive and offshore affiliate reinsurers. Lincoln has managed the volume and mix of its sales to mitigate the strain on available capital, with a focus on long-term capital generation through growing spread-based earnings through registered indexed-linked annuities, fixed annuities and funding agreement-backed notes, as well as exiting their external flow reinsurance treaty. The group has a track record of maintaining good financial flexibility through access to various liquidity sources, including bank credit facilities, senior debt, subordinated debt, preferred stock, an internal surplus note, Federal Home Loan Bank membership and contingent capital in the form of pre-capitalized trust securities. The organization also has additional flexibility through a recent equity investment in 2025 by Bain Capital Prairie LLC, a subsidiary of Bain Capital. Lincoln also utilizes a variety of other external investment managers to provide further expertise in the management of a diversified invested asset portfolio, which has supported a trend of strong investment income and operating earnings.
Partially offsetting these positive rating factors is Lincoln’s high utilization of affiliate reinsurance, which retains more liabilities within the enterprise when compared with non-affiliate reinsurance. The company is projecting to retain more earnings over time while ceding other select blocks to a diversified pool of non-affiliate reinsurers that are well-rated. Risk is also mitigated somewhat by the experienced management team, which maintains strong relationships with counterparties. Incremental internal reinsurance on new sales is expected to support profitable premium growth further in competitive markets, through the capital relief and ceding commissions provided by reinsurance provides; however, this is partially offset by greater dependence on reinsurance. The group has steadily increased its allocations to private credit and real estate investments, which presents concentration and liquidity risks. As part of Lincoln’s robust risk-management process, the company regularly performs holistic, multi-scenario stress testing and identifies management actions that can be utilized to protect liquidity and capital. The group’s efficient capital management strategies have also been used to manage its financial leverage, which remains close to LNC’s target.
The following Long-Term IRs have been assigned with stable outlooks:
Lincoln National Corporation—
- “bbb+” (Good) on $150 million floating rate term loan, due 2027
- “bbb+” (Good) on $500 million, 2.33% senior unsecured notes, due 2030
- “bbb+” (Good) on $500 million, 5.35% senior unsecured notes, due 2035
The following Long-Term IRs have been affirmed with stable outlooks:
Lincoln National Corporation—
- “bbb+” (Good) on $500 million 3.8% senior unsecured notes, due 2028
- “bbb+” (Good) on $500 million 3.05% senior unsecured notes, due 2030
- “bbb+” (Good) on $500 million 3.40% senior unsecured notes, due 2031
- “bbb+” (Good) on $300 million 3.40% senior unsecured notes, due 2032
- “bbb+” (Good) on $350 million 5.852% senior unsecured notes, due 2034
- “bbb+” (Good) on $500 million 6.15% senior unsecured notes, due 2036
- “bbb+” (Good) on $375 million 6.30% senior unsecured notes, due 2037
- “bbb+” (Good) on $500 million 7.00% senior unsecured notes, due 2040
- “bbb+” (Good) on $450 million 4.35% senior unsecured notes, due 2048
- “bbb+” (Good) on $300 million 4.375% senior unsecured notes, due 2050
- “bbb” (Good) on $562 million SOFR + 236 basis points (bps) subordinated notes, due 2066
- “bbb” (Good) on $433 million SOFR + 204 bps subordinated notes, due 2067
- “bbb-” (Good) on $800 million SOFR + 236 bps junior subordinated capital securities, due 2066
- “bbb-” (Good) on $500 million SOFR + 204 bps junior subordinated capital securities, due 2067
- “bbb-” (Good) on $500 million 9.25% non-cumulative preferred stock
- “bbb-” (Good) on $500 million 9.00% non-cumulative preferred stock
The following Short-Term IR has been affirmed:
Lincoln National Corporation—
- AMB-2 (Satisfactory) on commercial paper
The following indicative Long-Term IRs on securities available under a universal shelf registration have been affirmed with stable outlooks:
Lincoln National Corporation—
- “bbb+” (Good) on senior unsecured notes
- “bbb” (Good) on subordinated notes
- “bbb-” (Good) on junior subordinated notes
- “bbb-” (Good) on preferred stock
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings (BCR), Best’s Performance Assessments (PA), Best’s Preliminary Credit Assessments (PCA) and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.