EX-99.3 4 lnc-20230509xex99_3.htm EX-99.3

This document may not be accurate after its date, and LNC does not undertake to update or keep it accurate after such date.Al CopersinoHead of Investor Relations203-257-4493Albert.Copersino@LFG.com1Q23 Investment SupplementMay 9, 2023

Forward looking statements –cautionary languageCertain statements made in this presentation and in other written or oral statements made by Lincoln or on Lincoln’s behalf are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements. Forward-looking statements may contain words like: “anticipate,”“believe,” “estimate,” “expect,” “project,” “shall,” “will” and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in Lincoln’s businesses, prospective services or products, future performance or financial results and the outcome of contingencies, such as legal proceedings. Lincoln claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including: •Weak general economic and business conditions that may affect demand for our products, account balances, investment results, guaranteed benefit liabilities, premium levels and claims experience; •Adverse global capital and credit market conditions that may affect our ability to raise capital, if necessary, and may causeusto realize impairments on investments and certain intangible assets, including goodwill and the valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures; •The inability of our subsidiaries to pay dividends to the holding company in sufficient amounts, which could harm the holdingcompany’s ability to meet its obligations;•Legislative, regulatory or tax changes, both domestic and foreign, that affect: the cost of, or demand for, our subsidiaries’products; the required amount of reserves and/or surplus; our ability to conduct business and our captive reinsurance arrangements as well as restrictions on the payment of revenue sharing and 12b-1 distribution fees;•The impact of U.S. federal tax reform legislation on our business, earnings and capital; •The impact of regulations adopted by the Securities and Exchange Commission (“SEC”), the Department of Labor or other federalorstate regulators or self-regulatory organizations relating to the standard of care owed by investment advisers and/or broker-dealers that could affect our distribution model; •The impact of new and emerging privacy regulations that may lead to increased compliance costs and reputation risk;•Increasing scrutiny and evolving expectations and regulations regarding ESG matters that may adversely affect our reputation andour investment portfolio;•Actions taken by reinsurers to raise rates on in-force business;•Declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses anddemand for our products; •Rapidly increasing interest rates causing policyholders to surrender life insurance and annuity policies, thereby causing realized investment losses;•The impact of the implementation of the provisions of the European Market Infrastructure Regulation relating to the regulation of derivatives transactions;•The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as: adverse actions related to present or past business practices common in businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought byfederal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings;

Forward looking statements –cautionary language (contd.)•A decline or continued volatility in the equity markets causing a reduction in the sales of our subsidiaries’ products; a reduction of asset-based fees that our subsidiaries charge on various investment and insurance products; and an increase in liabilities related to guaranteed benefit riders, which are accounted for as market risk benefits, of our subsidiaries’ variable annuity products;•Ineffectiveness of our risk management policies and procedures, including our various hedging strategies; •A deviation in actual experience regarding future policyholder behavior, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries’ products and in establishing related insurance reserves, which may reduce future earnings; •Changes in accounting principles that may affect our consolidated financial statements;•Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations and the adverse effect such action may have on our ability to raise capital and on our liquidity and financial condition;•Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries and the adverse effect such action may have on the premium writings, policy retention, profitability of our insurance subsidiaries and liquidity;•Significant credit, accounting, fraud, corporate governance or other issues that may adversely affect the value of certain financial assets, as well as counterparties to which we are exposed to credit risk, requiring that we realize losses on financial assets;•Interruption in telecommunication, information technology or other operational systems or failure to safeguard the confidentiality or privacy of sensitive data on such systems, including from cyberattacks or other breaches of our data security systems;•The effect of acquisitions and divestitures, restructurings, product withdrawals and other unusual items;•The inability to realize or sustain the benefits we expect from, greater than expected investments in, and the potential impact of efforts related to, our strategic initiatives, including the Spark Initiative; •The adequacy and collectability of reinsurance that we have obtained;•Pandemics, acts of terrorism, war or other man-made and natural catastrophes that may adversely impact liabilities for policyholder claims, affect our businesses and increase the cost and availability of reinsurance;•Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affectthe level of premiums and fees that our subsidiaries can charge for their products;•The unknown effect on our subsidiaries’ businesses resulting from evolving market preferences and the changing demographics of our client base; and•The unanticipated loss of key management, financial planners or wholesalers.The risks and uncertainties included here are not exhaustive. Our most recent Form 10-K, as well as other reports that we file with the SEC, include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, Lincoln disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this presentation. The reporting of Risk-Based Capital (“RBC”) measures is not intended for the purpose of ranking any insurance company or for usein connection with any marketing, advertising or promotional activities.

Special note regarding data•All information regarding LNC’s investment portfolio excludes assets related to certain modified coinsurance (“Modco”) transactions. The Modcoinvestment portfolio has counterparty protections in place including investment guidelines, as well as additional support through over-collateralization and a letter of credit that were established to meet LNC’s risk management objectives.

Portfolio overview

High-quality and well-diversified investment portfolioThe portfolio is well-positionedfor the current environment•Long-term investment strategyistightlyaligned with our liabilityprofile andpositioned forvarious economiccycles–97%investment grade, theportfoliois at its highest qualityin the last decade•Realestate andbanking exposureis well positioned–Commercial real estateexposureisprimarily Commercial MortgageLoans (CMLs), with conservative LTVs1(46%) and DSCs2(2.4x), and minimalnear-term maturities–Currentbanking exposureis 5% ofinvested assetsand weighted toward a diversemixoflarge, high-quality global banks–1%exposure to regional banks, well diversified with only0.04%in failed regional banksPortfolio allocation byasset class3©2023 LincolnNationalCorporationIndustrialRMLsOtherTransportationAlts1%CMLs (ex-office)CMLs (office)3%2%2%9.5%Communications3%CMLs12%ConsumerNoncyclical12%Structured12%Utilities10%OtherFinancials8%2.5%Basic Industry3%Energy4%Technology$137B4%BroadMunicipal4%DiversificationConsumerCyclical4%Banking5%RegionalBanksOther45%CapitalGoods5%1%1Loan tovalueisabbreviatedat LTV.2 Debtservice coverage ratio is abbreviated as DSCR.3 As of 3/31/2023.4Otherasset classes primarilyinclude:quasi-sovereign,cash/collateral, and UST/agency.

High-quality and well-performing fixed incomeportfolioThe portfolioisat its highest qualityinthe last decade•Thefixed incomeportfolioexperienced theseventhconsecutivequarterofpositivenet ratings migration•BBB rated exposure is“up in quality” with majority of exposurerated BBB+/BBBNAIC-2/CM2–~0.1% BBB-onnegative outlook37%•Leveraged multi-manager platform to further de-risk regional bankingexposure during 1Q23–Total net credit losses were$49M3NAIC1/CM160%BBB+14%BBB18%BBB5%NAIC-3-6/CM33%CM30.4%Portfolioallocation byrating197% IG1($128B TotalRated Assets)~0.1% BBB-onnegative outlook21As of 3/31/23.As a % of ratedassetsincludingrated CML assetswhere CM1=NAIC1, CM2=NAIC2, CM3=NAIC3.2NAIC 5-6represents less than $100Mof portfolio| CM4-CM7represents less than $2Mof portfolio3After-tax losses; inclusiveofcreditallowance.©2023 LincolnNationalCorporation

Bank exposure is high-quality and well diversifiedby issuerand geography Well-positioned exposureto the banking sector•Banking makesup 5% of invested assetsand is70%senior in capital structure priority•98%ofexposureis investment gradewith averagerating ofA-•Geographically diversifiedin highly-rated developed countries–Focused onlargest banks in each respectivecountry–Noexposure to Swiss AT1 securities•Regional bankexposure at1% ofinvestedassets,highquality,and diversified –$19M of Silicon Valley Bank and $37M of FirstRepublicexposure (0.04% of invested assets)–No exposure to PacWest Bancorp,SilvergateCapital,Signature Bank orWestern Alliance Bancorp1 As of 3/31/2023.Total bank exposureby rating1BIGBBB-BBB9%A59%AA4%BBB+23%$7.5B2%3%Avg. Rating:A-©2023 LincolnNationalCorporation

High-quality commercialmortgageloan portfolioConservatively positionedCMLportfolio•Disciplinedportfolioconstruction delivering consistentloan performance–Portfolio46%loan tovalueand 2.4x debt service coverage–Virtuallynocreditlosses since2019 or currentloan modifications•Middle marketinvestmentstrategy focused 100%on fixed rate, stabilized seniorloans using conservativelyunderwritten valuation andcashflowassumptions •Robustsurveillance process (e.g. loan level financialreview, rentroll analysis, stress testing,etc.)•Manageable near-term portfolio maturitiesin 2023 (1%),2024 (3%) and 2025 (4%)–$7.3M average loan sizein 2023-2025•Portfoliowell diversifiedbypropertytype andgeography–Reduced office loan exposure by 400 bpssince 2020 to21%of theCML portfolio–Increased Industrial exposureby 600 bps since2020•No direct commercialreal estateequityexposure1 As of 3/31/2023.2 Excludesassets managedbynon-LFG third-party managers.Property typesOtherMobile Home4%$16.5BApartments33%2%Industrial25%Office21%Retail15%CML portfoliostatistics112.1%Inv Assets$11MAvg Loan Size100%Fixed Rate9.8 YearsRemaining Term2.4xDebtService Coverage46%Loan toValueCredit Quality80%CM120%CM2<1%CM3-6©2023 LincolnNationalCorporation

Office portfolio conservatively positioned with limited near-term maturitiesStable performance from office portfolio•Office portfolio credit quality delivering stable loan performance•Position sizing provides diversified exposure across portfolio•Less than 1% of office portfolio or $21.5M is below 1.0x debt service coverage and loan to value greater than 70%•Manageable near-term office loan maturity schedule with average loan size of $7.7M–Remaining 2023 office loan maturities of $34M (1% of office portfolio)–Office loan maturities in 2024 of $164M (5% of office portfolio) and in 2025 $189M (6% of office portfolio)•Disciplined portfolio construction and stress testing reflects our conservative positioning1 As of 3/31/2023.>1.50x1.25 - <1.50x1.00 - <1.25x<1.00xTotal<50%48%1%2%1%52%50-<60%21%5%3%0%28%60-<70%14%1%1%0%16%70-<80%0%0%0%1%1%80-<100%1%1%0%0%2%>100%0%0%0%0%0%Total84%8%6%2%100%Debt service coverageLoan to value$3.4B CML Office Portfolio CML portfolio statistics121%Portion of CML Portfolio2.5%Portion of Total Invested Assets$16MAvg Loan Size8.8 yearsRemaining Term2.3xDebt Service Coverage46%Loan to Value88%OccupancyCredit Quality83%CM117%CM2<1%CM3-6

Othercommercial real estate exposure islimited,high-quality and well-diversifiedREITportfolio highlights1•Total exposureis $1.7B•Portfolio is diversifiedacrossgeographies, MSAs, and propertytypes•Averagerating is BBB+with anaverageposition size of$26M•Office REIT exposure is lessthan $240M orlessthan 0.2% of invested assetsCMBSPortfolio Highlights1•Total exposureis $1.9B•CMBSportfolio is 70%/30% AAA/AA withaveragecredit enhancement of 29%•AverageSASB CMBS position sizeis less than $6M•CMBS office exposure2is 0.1%ofinvested assetsand is rated 59%/38%/3% AAA/AA/A1 Asof3/31/2023.2OfficewithinCMBS definedasSASB OfficeplusCMBS conduitdeals with> 50%exposure to office.Percent oftotal invested assetsREITSCMBS1.3%1.4%1.1%0.2%1.3%0.1%Other REITsOffice REITsOther CMBSOffice CMBS©2023 LincolnNationalCorporation11

Reinsurance transaction impacts

Ourrecently announced reinsurancetransaction supportsourstrategic direction and maintains our portfolio credit qualityPost reinsurance transaction asset allocation1Ratings mix1•Reduces total investedassets by$28B •Portfoliowill shift in-linewithourinvestment strategy ofmaintaining ahigh-quality portfolioand further