Lincoln National (LNC) risk factors, FY2025 10-K

Other

1. 01Weak conditions in the global capital markets and the economy generally may materially adversely affect our business and results of operations
2. 02Changes in interest rates and sustained low interest rates may cause interest rate spreads to decrease, impacting our profitability, and make it more challenging to meet certain statutory requirements
3. 03Increases in interest rates and sustained higher interest rates may negatively affect our profitability, capital position and the value of our investment portfolio and may also result in increased contract withdrawals and surrenders24% rewritten
4. 04Because the equity markets impact the profitability and expected profitability of many of our products, changes in equity markets may significantly affect our business and profitability
5. 05Changes in the equity markets, interest rates and/or volatility affect the profitability of our products with guaranteed benefits; therefore, such changes may have a material adverse effect on our business and profitability47% rewritten
6. 06Our hedging strategies may not be fully effective to offset the changes in the carrying value of the guarantees on certain of our products, which could result in volatility in our results of operations and financial condition under GAAP and in the capital levels of our insurance and reinsurance subsidiaries
7. 07Our businesses are heavily regulated and changes in regulation and in supervisory and enforcement policies may affect our insurance subsidiary capital requirements, reduce our profitability, limit our growth or otherwise adversely affect our business, results of operations and financial condition39% rewritten
8. 08Compliance with existing and emerging rules and regulations governing the use of AI could result in increased compliance costs and/or lead to changes in business practices and policies, and challenges with properly managing the use of AI could result in reputational harm, competitive harm and legal liability27% rewritten
9. 09Continued scrutiny and evolving expectations from investors, customers, regulators and other stakeholders regarding ESG matters may adversely affect our reputation or otherwise adversely impact our business and results of operations31% rewritten
10. 10Federal or state regulatory actions could result in substantial fines, penalties or prohibitions or restrictions on our business activities that could materially adversely affect our business, results of operations and financial condition35% rewritten
11. 11Changes to laws or regulations could adversely affect our distribution model and sales of our products and may result in additional disclosure and other requirements related to the sale and delivery of our products and services, which may adversely affect our business, results of operations and financial condition
12. 12Changes in tax law or the interpretation or application of existing tax laws could impact our tax costs and the products that we sell43% rewritten
13. 13Legal and regulatory actions are inherent in our businesses and could result in financial losses or harm our businesses
14. 14Climate change and climate change regulation may adversely affect our investment portfolio and financial condition33% rewritten
15. 15Changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect our financial statements45% rewritten
16. 16Anti-takeover provisions could delay, deter or prevent a change in control of LNC, even if the change in control would be beneficial to LNC shareholders
17. 17Adverse capital and credit market conditions may affect our ability to meet liquidity needs, access to capital and cost of capital
18. 18Because we are a holding company with no direct operations, the inability of our subsidiaries to pay dividends to us in sufficient amounts would harm our ability to meet our obligations
19. 19A decrease in the capital and surplus of our insurance subsidiaries may result in a downgrade to our credit and insurer financial strength ratings
20. 20An inability to access our credit facility or committed repurchase facilities could result in a reduction in our liquidity, which in turn could lead to downgrades in our credit and financial strength ratings
21. 21As a result of changes in assumptions, estimates and methods in calculating reserves, our reserves for future policy benefits and claims related to our current and future business as well as businesses we may acquire in the future may prove to be inadequate
22. 22We may be required to recognize an impairment of our goodwill or to establish a valuation allowance against our deferred income tax assets
23. 23The determination of the amount of allowance for credit losses and impairments taken on our investments is highly subjective and could materially impact our results of operations and financial condition
24. 24Changes to our valuation of investments and our methodologies, estimations and assumptions could harm our results of operations and financial condition
25. 25Significant adverse mortality experience may result in the loss of, or higher prices for, reinsurance, which could adversely affect our profitability
26. 26Pandemics and other catastrophes may adversely impact liabilities for contract holder claims
27. 27Our enterprise risk management policies and procedures may leave us exposed to unidentified or unanticipated risk, which could negatively affect our businesses or result in losses
28. 28We face risks of non-collectability of reinsurance and increased reinsurance rates, which could materially affect our results of operations
29. 29Competition for our employees is intense, and we may not be able to attract and retain the highly skilled people we need to support our business
30. 30We may not be able to protect our intellectual property and may be subject to infringement claims
31. 31Our information systems may experience interruptions, breaches in security and/or a failure of disaster recovery systems that could result in a loss or disclosure of confidential information, damage to our reputation, impairment of our ability to conduct business effectively and increased expense
32. 32Finally, our cyber liability insurance may not be sufficient to protect us against all losses resulting from any cyberattack or other interruption, breach in security or failure of our disaster recovery systems
33. 33We are subject to third-party information system and other operational risks due to our reliance on third-party vendors and suppliers and the outsourcing of certain of our business operations34% rewritten
34. 34Acquisitions and dispositions of businesses may not produce anticipated benefits and could result in operating difficulties, unforeseen liabilities or asset impairments, which may adversely affect our operating results and financial condition37% rewritten
35. 35A downgrade in our financial strength or credit ratings could limit our ability to market products, increase the number or value of policies being surrendered and/or hurt our relationships with creditors
36. 36We may have difficulty selling certain holdings in our investment portfolio in a timely manner and realizing full value
37. 37The amount and timing of income from certain investments can be uneven, and their valuations infrequent or volatile, which can impact the amount of income we record or lead to lower-than-expected returns, and thereby adversely impact our earnings
38. 38Defaults and write-downs on our mortgage loans may adversely affect our profitability
39. 39The difficulties faced by other financial institutions could adversely affect us
40. 40Our requirements to post collateral or make payments related to declines in market value of specified assets may adversely affect our liquidity and expose us to counterparty credit risk
41. 41Intense competition could negatively affect our ability to maintain or increase our profitability
42. 42The sales representatives through which LFD distributes our products are not captive and may sell products of our competitors40% rewritten