Packer16 Posted September 8, 2012 Share Posted September 8, 2012 Has anyone looked at this name? Amongst the life insurers this appears to be one that can achieve an RoE of 10% and is selling at a significant discount to book. It appears they are exposed to further decline in IRs due to VAs but that is reflected in discount to book. In addition, the warrants have the TARP strike price ratchet plus more warrants. The only question is whether it will trade at or above book again. Any thoughts on this or life insurance in general would be appreciated. Disclosure - I have taken a toe hold position. Packer Link to comment Share on other sites More sharing options...
PlanMaestro Posted September 8, 2012 Share Posted September 8, 2012 Packer, with another board member we've been discussing Lincoln for a couple of weeks. For that reason, I will keep the comments at a high level for the moment. Lincoln is a pure life insurance company with a VERY large variable annuity book. Considering that a year ago there were other cheaper and more diversified insurance companies it wasn't worth the analysis time. As has been discussed in other threads, VA guarantees are difficult to hedge and there was an arms race heading into the 2008 crisis. Without good hedges, they might be vulnerable to protracted low interest rates or another S&P crash. http://www.iii.org/facts_statistics/annuities.html But I have to say it looks interesting. * Their hedging program behaved reasonably well in 2008. * Looks as if they have been more disciplined that other players. * Seems they have distribution strengths. * There is a stress test in their presentation day that it is worth checking. * Current VA conditions are excellent, with high expected ROIs and more reasonable guarantees. Some issues, are * A large percentage of their guarantees are in the money. * VA standard bearer and in case of a crash they will crash too. Good hedging program or not. * It is not clear to me why they accepted TARP. Would love to know what you and other posters think about it. Link to comment Share on other sites More sharing options...
PlanMaestro Posted June 8, 2013 Share Posted June 8, 2013 http://www.bloomberg.com/news/2013-06-06/cooper-say-lincoln-national-can-add-risk-in-yield-hunt.html Link to comment Share on other sites More sharing options...
valuefinder0525 Posted April 7, 2016 Share Posted April 7, 2016 Any interest in rekindling the discussion on LNC? Below is a great VIC writeup on the name. https://www.valueinvestorsclub.com/idea/LINCOLN_NATIONAL_CORP/136550 Link to comment Share on other sites More sharing options...
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