Lincoln National Corporation · NYSE:LNC
Lincoln National — Merger or Acquisition (January 2018)
13 slides from Lincoln National's merger presentation, Jan 19, 2018
Slide 1: Lincoln to Acquire Liberty Mutual Group Benefits Business
Lincoln to Acquire Liberty mutual group benefits business January 19, 2018 Contact Information 484-583-1793 Christopher.Giovanni@LFG.com Exhibit 99.2
Slide 2: Forward-looking statements
This presentation contains certain forward-looking statements that are based upon current expectations and certain unaudited pro forma information that is presented for illustrative purposes only and involves certain risks and uncertainties within the meaning of the U.S. Private Securities Litigatio
Slide 3: Overview of Liberty Mutual Group Benefits Acquisition
Overview of Liberty mutual group benefits Acquisition 1 Total net investment includes purchase price for Liberty Mutual Group Benefits business and required capital. Strategic benefits for Group Protection • Significantly increases scale of Group business • Expand into large-case market and national
Slide 4: Strategic rationale for acquisition
Strategic rationale for acquisition Group Protection Significantly increases scale of Group Protection business Top 3 group benefits provider; largest seller of disability insurance Nearly double in-force market share1 Comprehensive product offering across all customer sizes Further expand into larg
Slide 5: Group insurance provides attractive growth profile
Group insurance provides attractive growth profile Mid-single digit industry growth 5% CAGR in sales 4% CAGR in premiums Upside with current economic environment Fast-growing employee-paid market Employee-paid sales growth ~2X overall market Disability penetration rates to improve further LTD and ST
Slide 6: Liberty Mutual Group Benefits business overview
Top 10 group benefits provider $1.7B of premiums and ~$300M of sales in 20171 2/3 of premium is disability insurance1 Focus on large-case market More than 2/3 of premium from > 5K lives Leading disability claims and absence management capabilities Best-in-class clinical model focused on recovery and
Slide 7: Significantly Increases Scale in Group Insurance
Significantly Increases Scale in Group Insurance Top 3 group benefits provider #7 #3 Premium nearly doubles #9 #6 Increases group benefits market position1 Sales rank increases to #3 from #7 Will become #1 seller of group disability insurance; market share of 14.1% vs. 7.2% Premium nearly doubles to
Slide 8: Comprehensive product offering across all case sizes
Comprehensive product offering across all case sizes 1 Company data estimated for 2017. Lincoln Liberty Balanced premium profile Premiums: $2.0B1 Premiums: $1.7B1 Lincoln pro-forma premiums: $3.7B1 Complementary models; limited sales overlap Further expand into large-case market Premiums balanced ac
Slide 9: Strengthens Capabilities and Competitive Position
Significant increase in covered lives Strengthens Capabilities and Competitive Position Strong absence management capabilities Significant expansion into large brokers % of premium from top 4 national brokers All other ▪▪ ▪▪ Broad distribution reach to brokers ~1/3 of premiums expected to come from
Slide 10: Proven ability to restore profitability
Proven ability to restore profitability Significant opportunity to improve margins Lincoln after-tax margin shown on GAAP basis; Liberty after-tax margin shown on statutory basis. Results have been adjusted to reflect a $5M after-tax gain for a favorable disability reserve refinement in 2016 and a $
Slide 11: Components of acquisition and purchase price
Components of acquisition and purchase price Lincoln to acquire LLAC from Liberty Mutual Will retain Group Benefits business Will reinsure individual life and annuity business to Protective Life Includes $13B of traditional life and annuity liabilities Backed by assets held in trust on Lincoln’s beh
Slide 12: Key financial metrics remain strong
Key financial metrics remain strong Leverage ratio ~25% Coverage ratio > 5X RBC ~460% Holding company cash > $450 million Pro-forma financial metrics expected to remain within Lincoln and rating agency targets1 1 Pro-forma metrics exclude impacts from tax reform.
Slide 13: Highly strategic and financially compelling transaction
Highly strategic and financially compelling transaction Highly strategic Significantly increases scale of group business Top 3 based on total group life and disability sales1 Complements current model Expand into large-case market and national brokers; opportunity to accelerate growth in employee-pa
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