Segment Information

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

We provide products and services and report results through our Annuities, Life Insurance, Group Protection and Retirement Plan Services business segments. We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments. The accounting policies of the business segments and Other Operations are the same as those described in Note 1. Our business segments and Other Operations reflect the manner by which our CODM views and manages the business. Our CODM is the Chief Executive Officer. The following is a brief description of these segments and Other Operations.

The Annuities segment provides tax-deferred investment growth and lifetime income opportunities for its clients by offering variable annuities (including RILA) and fixed annuities (including indexed).

The Life Insurance segment focuses on the creation and protection of wealth for its clients by providing life insurance products, including term insurance, both single (including UL, corporate-owned UL and bank-owned UL) and survivorship versions of IUL and VUL products, linked-benefit products (which are UL and VUL with riders providing for long-term care costs), and critical illness and long-term care riders, which can be attached to IUL or VUL policies. We have in-force blocks of UL and VUL products with lifetime secondary guarantees, but we no longer offer new sales of UL and VUL products with lifetime guarantees.

The Group Protection segment offers group non-medical insurance products and services, including short- and long-term disability, statutory disability and paid family medical leave administration and absence management services, term life, dental, vision and accident, critical illness and hospital indemnity benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans.

The Retirement Plan Services segment provides employer-sponsored defined benefit and individual retirement accounts, as well as individual and group variable annuities, group fixed annuities and mutual-fund based programs in the retirement plan marketplace.

Other Operations includes the financial results for operations that are not directly related to our business segments and primarily consists of: investments related to the excess capital in our insurance subsidiaries; corporate investments; interest expense associated with debt; expenses associated with corporate strategic initiatives; expenses associated with benefit plans; the results of certain disability income business; and our run-off Institutional Pension business in the form of group annuity contracts.

Income (loss) from operations is the internal measure used by our CODM that explains the results of our ongoing operations in a manner that allows for a better understanding of the underlying trends by excluding items that are unpredictable and not necessarily indicative of

current operating fundamentals or future performance, and, in many instances, decisions regarding these adjustments do not necessarily relate to the operations of the individual business segments. Income (loss) from operations is used by our CODM to evaluate financial performance, to assess the budgeting and forecasting process and to determine future resource allocation. In the third quarter of 2024, we revised our definition of income (loss) from operations to exclude the impact of certain additional items that are not indicative of the ongoing operations of the business and may obscure trends in the underlying performance of the Company. The presentation of prior period income (loss) from operations was recast for such third quarter 2024 revisions to conform to the current period presentation.

Income (loss) from operations is GAAP net income excluding the following items, as applicable:

•Items related to annuity product features, which include changes in MRBs, including gains and losses and benefit payments, changes in the fair value of the derivative instruments we hold to hedge GLB and GDB riders, net of fee income allocated to support the cost of hedging them, and changes in the fair value of the embedded derivative liabilities of our indexed annuity contracts and the associated index options we hold to hedge them, including collateral expense associated with the hedge program (collectively, “net annuity product features”);

•Items related to life insurance product features, which include changes in the fair value of derivatives we hold as part of VUL hedging, changes in reserves resulting from benefit ratio unlocking associated with the impact of capital markets, and changes in the fair value of the embedded derivative liabilities of our IUL contracts and the associated index options we hold to hedge them (collectively, “net life insurance product features”);

•Credit loss-related adjustments on fixed maturity AFS securities, mortgage loans on real estate and reinsurance-related assets (“credit loss-related adjustments”);

•Changes in the fair value of equity securities, certain derivatives, certain other investments and realized gains (losses) on sales, disposals and impairments of financial assets (collectively, “investment gains (losses)”);

•Changes in the fair value of reinsurance-related embedded derivatives, trading securities and mortgage loans on real estate electing the fair value option (“changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans”);

•Income (loss) from the initial adoption of new accounting standards, accounting policy changes and new regulations, including changes in tax law;

•Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;

•Losses from the impairment of intangible assets and gains (losses) on other non-financial assets;

•Income (loss) from discontinued operations;

•Other items, which include the following: certain legal and regulatory accruals; severance expense related to initiatives that realign the workforce; transaction and integration costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of businesses or blocks of business; mark-to-market adjustment related to the LNC stock component of our deferred compensation plans (“deferred compensation mark-to-market adjustment”); gains (losses) on modification or early extinguishment of debt; and impacts from settlement or curtailment of defined benefit obligations; and

•Income tax benefit (expense) related to the above pre-tax items, including the effect of tax adjustments such as changes to deferred tax valuation allowances.

We use our prevailing corporate federal income tax rate of 21% and an estimated state income tax rate, where applicable, net of the impacts related to dividends-received deduction and foreign tax credits and any other permanent differences for events recognized differently in our consolidated financial statements and federal income tax returns.

We do not report total assets by segment because this is not a metric used by the CODM to allocate resources or evaluate segment performance.

The tables below reconcile our internal measure of performance to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss) (in millions):

	For the Year Ended December 31, 2024
	Annuities		Life Insurance		Group Protection		Retirement Plan Services		Other Operations		Total
Operating Revenues (1)	$	4,896	$	6,248	$	5,717	$	1,321	$	160	$	18,342
Operating Expenses (2)
Benefits and policyholder liability
remeasurement (gain) loss	145		3,893		3,692		–		12		7,742
Interest credited	1,536		1,194		6		675		32		3,443
Commissions	1,115		461		462		103		–		2,141
General and administrative expenses	495		563		870		340		256		2,524
Interest and debt expense	–		–		–		–		336		336
Other (3)	217		242		149		17		(10)		615
Total operating expenses	3,508		6,353		5,179		1,135		626		16,801
Total federal income tax expense (benefit)	228		(42)		113		23		(96)		226
Total income (loss) from operations	1,160		(63)		425		163		(370)		1,315
Reconciliation of total income (loss) from
operations to net income (loss):
Net annuity product features, pre-tax											2,508
Net life insurance product features, pre-tax											(207)
Credit loss-related adjustments, pre-tax											(152)
Investment gains (losses), pre-tax											(483)
Changes in the fair value of
reinsurance-related embedded
derivatives, trading securities and
certain mortgage loans, pre-tax (4)											535
Gains (losses) on other non-financial assets –
sale of subsidiaries/businesses, pre-tax (5)											582
Other items, pre-tax (6) (7) (8) (9)											(270)
Income tax benefit (expense) related to
the above pre-tax items											(553)
Total net income (loss)											$	3,275

(1)    See table below for reconciliation of total operating revenues to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss).

(2)    The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Inter-segment expenses are included within the amounts shown.

(3)    Other operating expenses include: Annuities: DAC and VOBA capitalization and amortization; broker-dealer expenses before the sale of our wealth management business in the second quarter of 2024; taxes, licenses and fees; expenses associated with reserve financing and LOCs and amortization of deferred loss on business sold through reinsurance. Life Insurance: DAC and VOBA capitalization and amortization; taxes, licenses and fees; expenses associated with reserve financing and LOCs; amortization of deferred loss on business sold through reinsurance and other intangible amortization. Group Protection: Taxes, licenses and fees; DAC capitalization and amortization; other intangible amortization and expenses associated with LOCs. Retirement Plan Services: DAC capitalization and amortization; taxes, licenses and fees and expenses associated with LOCs. Other Operations: Reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of LOCs.

(4)    Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. For more information, see Note 7.

(5)    For information on the sale of our wealth management business, see Note 1.

(6)    Includes certain legal accruals of $(129) million, primarily attributable to a first quarter 2024 accrual related to the settlement of cost of insurance litigation, and regulatory accruals of $(12) million related to estimated state guaranty fund assessments net of estimated state premium tax recoveries associated with the Bankers Life Insurance Company and Colorado Bankers Life Insurance Company insolvencies (see “State Guaranty Fund Assessments” in Note 17 for more information).

(7)    Includes severance expense related to initiatives to realign the workforce of $(74) million.

(8)    Includes transaction and integration costs related to mergers, acquisitions and divestitures of $(40) million.

(9)    Includes deferred compensation mark-to-market adjustment of $(15) million.

	For the Year Ended December 31, 2023
	Annuities		Life Insurance		Group Protection		Retirement Plan Services		Other Operations		Total
Operating Revenues (1)	$	3,002	$	6,907	$	5,563	$	1,310	$	(755)	$	16,027
Operating Expenses (2)
Benefits and policyholder liability
remeasurement (gain) loss (3)	(1,504)		4,583		3,732		–		(866)		5,945
Interest credited	1,252		1,290		5		665		36		3,248
Commissions	971		571		446		87		–		2,075
General and administrative expenses	471		617		846		341		258		2,533
Interest and debt expense	–		–		–		–		331		331
Other (4)	599		77		155		16		(8)		839
Total operating expenses	1,789		7,138		5,184		1,109		(249)		14,971
Total federal income tax expense (benefit)	140		(72)		80		30		(112)		66
Total income (loss) from operations	1,073		(159)		299		171		(394)		990
Reconciliation of total income (loss) from
operations to net income (loss) (5):
Net annuity product features, pre-tax											68
Net life insurance product features, pre-tax											(393)
Credit loss-related adjustments, pre-tax											(80)
Investment gains (losses), pre-tax											(959)
Changes in the fair value of
reinsurance-related embedded
derivatives, trading securities and
certain mortgage loans, pre-tax (6)											(802)
Other items, pre-tax (7) (8) (9) (10)											(55)
Income tax benefit (expense) related to
the above pre-tax items											479
Total net income (loss)											$	(752)

(1)    See table below for reconciliation of total operating revenues to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss).

(2)    The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Inter-segment expenses are included within the amounts shown.

(3)    Annuities and Other Operations: Reflects the fourth quarter 2023 reinsurance transaction ceding of in-force life-contingent payout fixed annuities and institutional pension business that had no income (loss) from operations impact. See Note 7 for more information on the transaction.

(4)    Other operating expenses include: Annuities: Broker-dealer expenses; DAC and VOBA capitalization and amortization; taxes, licenses and fees and expenses associated with reserve financing and LOCs. Life Insurance: DAC and VOBA capitalization and amortization; taxes, licenses and fees; expenses associated with reserve financing and LOCs and other intangible amortization. Group Protection: Taxes, licenses and fees; DAC capitalization and amortization; other intangible amortization and expenses associated with LOCs. Retirement Plan Services: DAC capitalization and amortization; taxes, licenses and fees and expenses associated with LOCs. Other Operations: Reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of LOCs.

(5)    The prior period presentation was recast to conform to the revised definition of income (loss) from operations.

(6)    Includes primarily changes in the fair value of the embedded derivative related to the fourth quarter 2023 reinsurance transaction. For more information, see Note 7.

(7)    Includes certain legal accruals of $(12) million.

(8)    Includes severance expense related to initiatives to realign the workforce of $(7) million.

(9)    Includes transaction and integration costs related to mergers, acquisitions and divestitures of $(34) million.

(10)    Includes deferred compensation mark-to-market adjustment of $(2) million.

	For the Year Ended December 31, 2022
	Annuities		Life Insurance		Group Protection		Retirement Plan Services		Other Operations		Total
Operating Revenues (1)	$	4,482	$	6,747	$	5,304	$	1,274	$	156	$	17,963
Operating Expenses (2)
Benefits and policyholder liability
remeasurement (gain) loss	253		6,925		3,931		–		66		11,175
Interest credited	894		1,310		5		629		39		2,877
Commissions	1,018		698		394		79		–		2,189
General and administrative expenses	408		554		766		303		267		2,298
Interest and debt expense	–		–		–		–		283		283
Other (3)	563		(59)		156		16		(5)		671
Total operating expenses	3,136		9,428		5,252		1,027		650		19,493
Total federal income tax expense (benefit)	185		(587)		11		36		(93)		(448)
Total income (loss) from operations	1,161		(2,094)		41		211		(401)		(1,082)
Reconciliation of total income (loss) from
operations to net income (loss) (4):
Net annuity product features, pre-tax											4,133
Net life insurance product features, pre-tax											26
Credit loss-related adjustments, pre-tax											(130)
Investment gains (losses), pre-tax											20
Changes in the fair value of
reinsurance-related embedded
derivatives, trading securities and
certain mortgage loans, pre-tax											(52)
Impairment of intangibles (5)											(634)
Other items, pre-tax (6) (7)											(109)
Income tax benefit (expense) related to
the above pre-tax items											(814)
Total net income (loss)											$	1,358

(1)    See table below for reconciliation of total operating revenues to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss).

(2)    The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Inter-segment expenses are included within the amounts shown.

(3)    Other operating expenses include: Annuities: Broker-dealer expenses; DAC and VOBA capitalization and amortization; taxes, licenses and fees and expenses associated with reserve financing and LOCs. Life Insurance: DAC and VOBA capitalization and amortization; taxes, licenses and fees; expenses associated with reserve financing and LOCs and other intangible amortization. Group Protection: Taxes, licenses and fees; DAC capitalization and amortization; other intangible amortization and expenses associated with LOCs. Retirement Plan Services: DAC capitalization and amortization and taxes, licenses and fees. Other Operations: Reimbursements to Other Operations from the Life Insurance segment for the use of proceeds from certain issuances of senior notes that were used as long-term structured solutions, net of expenses incurred by Other Operations for its access to a financing facility and issuance of LOCs.

(4)    The prior period presentation was recast to conform to the revised definition of income (loss) from operations.

(5)    See Note 8 for more information.

(6)    Includes certain legal accruals of $(147) million.

(7)    Includes deferred compensation mark-to-market adjustment of $38 million.

The tables below reconcile our total operating revenues to the GAAP measure presented in the Consolidated Statements of Comprehensive Income (Loss) (in millions):

	For the Year Ended December 31, 2024
	Annuities		Life Insurance		Group Protection		Retirement Plan Services		Other Operations		Total
Operating revenues	$	4,896	$	6,248	$	5,717	$	1,321	$	160	$	18,342
Revenue adjustments from annuity and life
insurance product features	(130)		(252)		–		–		–		(382)
Credit loss-related adjustments	(71)		(10)		(4)		(32)		(35)		(152)
Investment gains (losses)	13		(252)		(2)		(11)		(231)		(483)
Changes in the fair value of reinsurance-
related embedded derivatives, trading
securities and certain mortgage loans	(6)		554		–		–		(13)		535
Gains (losses) on other non-financial assets -
sale of subsidiaries/businesses	–		–		–		–		582		582
Total revenues	$	4,702	$	6,288	$	5,711	$	1,278	$	463	$	18,442

	For the Year Ended December 31, 2023
	Annuities (1)		Life Insurance		Group Protection		Retirement Plan Services		Other Operations (1)		Total
Operating revenues	$	3,002	$	6,907	$	5,563	$	1,310	$	(755)	$	16,027
Revenue adjustments from annuity and life
insurance product features	(2,131)		(410)		–		–		–		(2,541)
Credit loss-related adjustments	(14)		(54)		(4)		(1)		(7)		(80)
Investment gains (losses)	(95)		(733)		(6)		(35)		(90)		(959)
Changes in the fair value of reinsurance-
related embedded derivatives, trading
securities and certain mortgage loans	(30)		(781)		–		–		9		(802)
Total revenues (1)	$	732	$	4,929	$	5,553	$	1,274	$	(843)	$	11,645

(1)    Includes ceded insurance premiums primarily related to the fourth quarter 2023 reinsurance transaction. For more information, see Note 7.

	For the Year Ended December 31, 2022
	Annuities		Life Insurance		Group Protection		Retirement Plan Services		Other Operations		Total
Operating revenues	$	4,482	$	6,747	$	5,304	$	1,274	$	156	$	17,963
Revenue adjustments from annuity and life
insurance product features	974		35		–		–		–		1,009
Credit loss-related adjustments	(10)		(124)		3		(3)		4		(130)
Investment gains (losses)	(21)		88		(3)		(13)		(31)		20
Changes in the fair value of reinsurance-
related embedded derivatives, trading
securities and certain mortgage loans	84		(1)		–		–		(135)		(52)
Total revenues	$	5,509	$	6,745	$	5,304	$	1,258	$	(6)	$	18,810

Other business segment and Other Operations information (in millions) was as follows:

	For the Years Ended December 31,
	2024		2023		2022
Net Investment Income
Annuities	$	1,636	$	1,668	$	1,463
Life Insurance	2,434		2,712		2,587
Group Protection	348		339		334
Retirement Plan Services	997		1,012		976
Other Operations	110		148		155
Total net investment income	$	5,525	$	5,879	$	5,515