A.M. Best Comments on Credit Ratings of Lincoln National Corporation and Its Subsidiaries Following Announced Transaction

A.M. Best has commented that the Credit Ratings of Lincoln National Corporation (Lincoln) (headquartered in Radnor, PA) [NYSE:LNC] and its insurance subsidiaries remain unchanged following the Jan. 19, 2018, announcement that Lincoln has reached a definitive agreement to acquire Liberty Life Assurance Company of Boston (Liberty Life) from Liberty Mutual Holding Company Inc.

Under the terms of the agreement, Lincoln will acquire Liberty Life for $3.3 billion sourced through excess capital, long-term debt issuance, and reduced share buybacks. The acquisition expands Lincoln’s group segment into the large case market, providing added scale and enhancements to its capabilities in the disability markets.

As part of the transaction, all existing life and annuity business at Liberty Life will be reinsured to Protective Life Insurance Company with the net result that only group insurance will be retained by Lincoln. Following the transaction, it is expected that Lincoln will be a top five provider in the group disability and life markets based on sales, and a top five disability provider based on inforce premiums. Furthermore, the transaction is expected to increase materially Lincoln’s operating performance in the segment, including sales, premiums and earnings. However, A.M. Best notes that the impact to the consolidated balance sheet and operating profile is relatively modest. The transaction is expected to close in the second quarter of 2018, pending regulatory approval and other customary closing conditions.

This press release relates to Credit Ratings that have been published on A.M. 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 A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and A.M. Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and A.M. Best Rating Action Press Releases.

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