Lincoln National: Customers Aren't Concerned We Used TARP
31 July 2009 - 2:40AM
Dow Jones News
Insurer Lincoln National Corp. (LNC) said sales of variable
annuities and other retirement products aren't suffering from any
"taint" of accepting government assistance last month, the
company's chief executive said Thursday.
Comments from customers on the matter "have been few and far
between," CEO Dennis Glass said during the company's earnings
conference call Thursday.
"We are one of two [insurers] that decided to take this," he
said. He compared that to the "700 or 800 commercial banks that
operate with CPP," or the Capital Purchase Program operated by the
U.S. Treasury that has made equity investments in
financial-services companies that need help raising their capital
levels.
Lincoln National and Hartford Financial Services Group Inc.
(HIG) were the two insurers that accepted help from the program
last month, which is a part of Treasury's Troubled Asset Relief
Program, or TARP.
CEO Glass also said the company hasn't run into serious problems
retaining distributors or employees.
On Wednesday, Lincoln reported a loss of $161.4 million, or 62
cents a share, compared with a year-earlier profit of $124.7
million, or 48 cents a share. It was the company's third
consecutive quarterly loss.
The latest results included a 65-cent-a-share charge related to
the sale of its U.K. arm and 84 cents in charges related to
investment losses and other items.
Lincoln's operating income, which excludes realized investment
gains and losses, fell to 81 cents a share from $1.24 last year,
below the Thomson Reuters analyst estimate of 83 cents per
share.
Shares of Lincoln National and other life insurers surged
Thursday, after Lincoln National and Hartford reported
second-quarter results.
Shares of Lincoln National recently were up 9.8% to $19.81.
Hartford Financial was up 10.3% to $16.50 recently.
The Dow Jones US Life Insurance Index (DJUSIL-DJX) rose 4.38%
recently.
-By Lavonne Kuykendall, Dow Jones Newswires; 312-750-4141;
lavonne.kuykendall@dowjones.com