Lincoln National Corp (LNC) 2024 Q2 法說會逐字稿

Good morning, and thank you for joining Lincoln Financial Group's second quarter 2024 earnings conference call. (Operator Instructions) Now I would like to turn the conference over to Senior Vice President, Head of Investor Relations, Tina Madon. Please go ahead.

早安，感謝您參加林肯金融集團 2024 年第二季財報電話會議。（操作員指示）現在我想將會議交給高級副總裁兼投資者關係主管蒂娜·馬登（Tina Madon）。請繼續。

Thank you. Good morning, everyone, and welcome to our second quarter earnings call. We appreciate your interest in Lincoln. Our quarterly earnings press release, earnings supplement and statistical supplement can all be found on the Investor Relations page of our website, www.lincolnfinancial.com.

謝謝。大家早安，歡迎參加我們的第二季財報電話會議。我們感謝您對林肯的興趣。我們的季度收益新聞稿、收益補充和統計補充均可在我們網站 www.lincolnfinancial.com 的投資者關係頁面上找到。

These documents include reconciliations of the non-GAAP measures used on today's call, including adjusted income from operations or adjusted operating income and adjusted income from operations available to common stockholders to their most comparable GAAP measures.

這些文件包括今天電話會議中使用的非公認會計原則衡量標準的調節表，包括調整後的營運收入或調整後的營運收入和調整後的營運收入，可供普通股股東與其最可比的公認會計原則衡量標準比較。

Before we begin, I want to remind you that any statements made during today's call regarding expectations, future actions, trends in our businesses, prospective services or products, future performance or financial results, including those related to deposits, expenses, income from operations, share repurchases, liquidity and capital resources are forward-looking statements under the Private Securities Litigation Reform Act of 1995.

在我們開始之前，我想提醒您，今天的電話會議中發表的有關預期、未來行動、我們業務趨勢、預期服務或產品、未來業績或財務業績的任何聲明，包括與存款、費用、營運收入相關的聲明，股票回購、流動性和資本資源屬於 1995 年《私人證券訴訟改革法案》規定的前瞻性陳述。

These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from our current expectations. These risks and uncertainties include those described in the cautionary statement disclosures in our earnings release issued earlier this morning as well as those detailed in our 2023 annual report on Form 10-K, most recent quarterly reports on Form 10-Q and from time to time in our other filings with the SEC.

這些前瞻性陳述涉及風險和不確定性，可能導致我們的實際結果與我們目前的預期有重大差異。這些風在我們向 SEC 提交的其他文件中。

These forward-looking statements are made only as of today, and we undertake no obligation to update or revise any of them to reflect events or circumstances that occur after today.

這些前瞻性陳述僅在今天作出，我們沒有義務更新或修改其中任何陳述以反映今天之後發生的事件或情況。

Presenting this morning are Ellen Cooper, Chairman, President and CEO; and Chris Neczypor, Chief Financial Officer. After their prepared remarks, we'll address your questions.

今天早上出席會議的有董事長、總裁兼執行長艾倫·庫柏 (Ellen Cooper)；和財務長 Chris Neczypor。在他們準備好發言後，我們將回答您的問題。

Let me now turn the call over to Ellen. Ellen?

現在讓我把電話轉給艾倫。艾倫？

Thank you, Tina, and good morning, everyone. Thank you for joining our call today. During the second quarter, we continued to make steady progress toward the three objectives we outlined earlier this year: build upon a strong capital foundation to ensure enterprise stability across market cycles and support investment for future growth; optimize our operating model to advance scalable framework to maximize our resources; and deliver profitable growth to improve free cash flow and grow the franchise.

謝謝蒂娜，大家早安。感謝您今天加入我們的電話會議。第二季度，我們繼續穩步推進今年稍早提出的三個目標：建立強大的資本基礎，確保企業在市場週期中保持穩定，並支持未來成長的投資；優化我們的營運模式，推進可擴展的框架，從而最大限度地利用我們的資源；並實現獲利成長，以改善自由現金流並發展特許經營權。

Let me briefly touch on each of these objectives, starting with foundational capital. We are pleased to update you that we ended the quarter with an estimated RBC ratio of more than 420% as we successfully closed the sale of our wealth management business. In our industrial outlook from earlier this year, we communicated our goal to build and maintain an RBC buffer of 420%, 20 points over our 400% RBC target as we continue to take the necessary steps to minimize our capital volatility.

讓我從基礎資本開始簡要介紹每個目標。我們很高興地向您通報，隨著我們成功完成了財富管理業務的出售，本季結束時，我們的 RBC 比率估計超過 420%。在今年稍早的產業展望中，我們傳達了建立並維持 420% 的 RBC 緩衝的目標，比 400% RBC 的目標高出 20 個點，同時我們將繼續採取必要措施盡量減少資本波動。

The combination of the build of capital above our target level and the actions we are taking to increase free cash flow generation should provide greater capital flexibility over the next few years. This is an important milestone as we position our business for its next chapter.

高於我們目標水準的資本建設和我們為增加自由現金流產生而採取的行動相結合，應該會在未來幾年提供更大的資本靈活性。這是一個重要的里程碑，因為我們為我們的業務開啟了新的篇章。

We also made further progress in optimizing our operating model this quarter and started to see the benefits of the expense reductions we made earlier this year. Additionally, we received the license for our affiliated Bermuda subsidiary, which will help us stay competitive in new business segments and support our financial objectives such as enhancing our free cash flow.

本季我們在優化營運模式方面也取得了進一步進展，並開始看到今年稍早削減費用的好處。此外，我們還獲得了附屬百慕達子公司的許可證，這將有助於我們在新業務領域保持競爭力，並支持我們的財務目標，例如增強我們的自由現金流。

Lastly, we advanced against our objective of delivering profitable growth as we transform Lincoln into an organization characterized by businesses, segments and products with more stable cash flow and higher risk-adjusted returns.

最後，我們朝著實現獲利成長的目標邁進，將林肯轉變為一個以業務、部門和產品為特徵的組織，具有更穩定的現金流和更高的風險調整回報。

As we look ahead, we expect to continue to grow and diversify our group business across products and market segments, evolve our annuity business with a well-balanced product mix that includes expansion of spread and spread like products, reposition our life business to emphasize more risk sharing and accumulation products and positioned our retirement business for future growth.

展望未來，我們預計將繼續在產品和細分市場上實現集團業務的成長和多元化，以均衡的產品組合發展我們的年金業務，包括擴大利差和利差類產品，重新定位我們的壽險業務以強調更多風險分擔和累積產品，為我們的退休業務未來的成長奠定了基礎。

We are a market leader in our at scale businesses and will leverage our competitive advantages, including our powerful franchise, trusted brand, distribution leadership, and broad product portfolio to lay the groundwork for future expansion.

我們是大規模業務的市場領導者，並將利用我們的競爭優勢，包括強大的特許經營權、值得信賴的品牌、分銷領導力和廣泛的產品組合，為未來的擴張奠定基礎。

While this is a multiyear journey and the strategic realignment in each of our four businesses is at different stages, we are executing well as demonstrated this quarter in our overall sales level and most importantly in our sales mix.

雖然這是一個多年的歷程，而且我們四項業務的策略調整處於不同階段，但正如本季度我們的整體銷售水平，最重要的是我們的銷售組合所證明的那樣，我們的執行情況良好。

Turning to our second quarter performance. Our results were solid and exceeded our expectations as we continued to execute on our strategic priorities with a few key highlights. Our annuities business grew earnings by 10% year-over-year, delivering its highest earnings quarter in two years and achieving its second strongest sales quarter in over four years.

轉向我們第二季的業績。隨著我們繼續執行我們的策略重點並提出一些關鍵亮點，我們的業績非常紮實，超出了我們的預期。我們的年金業務獲利年增 10%，實現兩年來最高的季度獲利，並實現四年多來第二強勁的銷售季度。

Group protection continued its momentum, delivering earnings in line with its record prior year quarter and strong sales growth across all products and segments.

集團保護持續保持成長勢頭，獲利與去年同期創紀錄的水平一致，所有產品和細分市場的銷售均強勁增長。

Our life business, excluding the impact of below target alternative investment income delivered earnings in line with our expectations and a sequential increase in sales. And finally, retirement plan services produced sequential earnings growth and sales within the range of the last few quarters.

我們的壽險業務（排除低於目標的另類投資收入的影響）所帶來的收益符合我們的預期，銷售額連續成長。最後，退休計劃服務在過去幾季的範圍內實現了連續的獲利成長和銷售額成長。

Now turning to retail solutions, which includes our annuities and life businesses. Our annuity strategy focuses on growth, while shifting to a more balanced mix. We aim to achieve this by expanding our addressable market and enhancing our competitiveness through the optimization of our capabilities.

現在轉向零售解決方案，其中包括我們的年金和人壽業務。我們的年金策略著重於成長，同時轉向更平衡的組合。我們的目標是透過擴大我們的目標市場並透過優化我們的能力來增強我們的競爭力來實現這一目標。

The strong earnings delivered this quarter in our annuities business were broad-based and reflected continued progression and solid returns on a diversified book of business.

本季我們的年金業務實現了強勁的盈利，基礎廣泛，反映出多元化業務的持續進步和穩健回報。

Total annuity sales of $3.8 billion were up 48% from the prior year quarter. Sequentially, sales were up 34% and sales levels were higher across all product categories, with more than 70% of the overall sales in the quarter in spread and spread like products.

年金銷售額總額為 38 億美元，比去年同期成長 48%。隨後，銷售額成長了 34%，所有產品類別的銷售水準都更高，本季總銷售額的 70% 以上是傳播和傳播產品。

We are building on our long-standing relationships with distribution partners to further expand shelf space in select product categories and utilizing our leading distribution framework to provide marketing, training, and data to support our partners and enlarge footprints.

我們正在與分銷合作夥伴建立長期關係，進一步擴大精選產品類別的貨架空間，並利用我們領先的分銷框架提供行銷、培訓和數據來支持我們的合作夥伴並擴大足跡。

Our fixed sales more than doubled year over year and increased more than 70% sequentially as we apply the capabilities we have built over the course of the last year to sustain a consistent and growing competitive presence in the fixed marketplace. RILA also continued to be a strategic focus and demonstrated solid momentum with sales increasing by more than 15% sequentially.

我們的固定銷售額年增了一倍多，環比增長超過 70%，因為我們運用去年建立的能力來維持固定市場中持續且不斷增長的競爭地位。RILA 也繼續成為戰略重點，並表現出強勁的勢頭，銷售額環比增長超過 15%。

We successfully launched our second generation product in the quarter. And although it is still early, the refreshed features and unique crediting strategies are resonating in the market. VA with guaranteed living benefits sales were up 28% year-over-year and continue to be integral to our overall product solutions, while delivering a strong customer value proposition. However, this product category remains a smaller contributor to our total annuity sales, representing less than 20% of sales in the quarter.

我們在本季成功推出了第二代產品。儘管現在還為時過早，但更新的功能和獨特的積分策略正在市場上引起共鳴。具有生活保障福利的 VA 銷售額年增 28%，並繼續成為我們整體產品解決方案的組成部分，同時提供強大的客戶價值主張。然而，該產品類別對我們年金總銷售額的貢獻仍然較小，佔本季銷售額的不到 20%。

In summary, these results reflect the strength of our annuities business as we continue to achieve our objectives for a balanced product mix while providing customers with a broad range of solutions to fulfill their evolving needs.

總而言之，這些結果反映了我們年金業務的實力，我們繼續實現平衡產品組合的目標，同時為客戶提供廣泛的解決方案，以滿足他們不斷變化的需求。

Now turning to Life. We achieved 15% sequential sales growth as a result of our ongoing strategic realignment. We are adapting our business to focus on products with more stable cash flows and higher risk-adjusted returns. And we are supporting this by repositioning our life distribution team to optimize our wholesalers' footprint.

現在轉向生活。由於我們持續的策略調整，我們實現了 15% 的連續銷售額成長。我們正在調整業務，專注於現金流量更穩定、風險調整後回報更高的產品。我們透過重新定位我們的生活分銷團隊來支持這一目標，以優化我們批發商的足跡。

This will improve our reach and elevate our coverage and by doing so, we aim to better enable and accelerate our product shift. While the realignment of our life business will take time, we are confident that leveraging our strengths in product, distribution, and underwriting, while strengthening our customer-centric service will increase our competitive differentiation and drive higher earnings growth.

這將擴大我們的覆蓋範圍並擴大我們的覆蓋範圍，透過這樣做，我們的目標是更好地實現和加速我們的產品轉變。雖然我們的壽險業務的調整需要時間，但我們有信心利用我們在產品、分銷和承保方面的優勢，同時加強以客戶為中心的服務，將提高我們的競爭優勢並推動更高的盈利增長。

Next, turning to workplace solutions, which includes our group protection and retirement plan services businesses. Within group our strategy is to grow and achieve sustainable target margins by diversifying our business across products and market segments, with an emphasis on expanding our presence in small market and supplemental health. Group delivered another excellent quarter, and we are very pleased with the results and strategic momentum of this business.

接下來，轉向工作場所解決方案，其中包括我們的團體保護和退休計畫服務業務。在集團內部，我們的策略是透過跨產品和細分市場的業務多元化來成長並實現可持續的目標利潤，重點是擴大我們在小市場和補充健康領域的業務。集團又交付了出色的季度業績，我們對該業務的業績和戰略勢頭感到非常滿意。

Adjusted for the timing impact of an experienced refunds that Chris will further discuss, earnings were in line with its record prior year quarter, resulting in an 8.2% margin. We continue to prioritize margin expansion over top line growth.

根據克里斯將進一步討論的經驗豐富的退款的時間影響進行調整後，收益與去年同期的創紀錄水平一致，利潤率為 8.2%。我們繼續將利潤率擴張置於營收成長之上。

Premium growth of 3% reflected disciplined new business and renewal pricing, combined with persistency in line with our expectations, reinforcing the strength of our relationships and ability to deliver value to our customers.

3% 的保費成長反映了嚴格的新業務和續訂定價，再加上持續符合我們的預期，增強了我們的關係實力和為客戶提供價值的能力。

Sales levels for the second quarter, which have typically accounted for 15% to 20% of our annual sales volume increased by 68% compared to a lower than usual quarter last year. This growth spanned all products and market segments driven primarily by new business from existing customers, including supplemental health. These results highlight our continued execution to diversify our business and achieve profitable growth.

第二季的銷售水準通常占我們年銷量的 15% 至 20%，與去年同期相比成長了 68%。這種成長涵蓋了所有產品和細分市場，主要由現有客戶的新業務（包括補充保健品）推動。這些結果凸顯了我們持續執行業務多元化並實現獲利成長。

Our targeted segment strategies, which are key pillars of our margin expansion efforts, our gaining further traction as we offer tailored solutions within each segment. As we continue to grow our leadership position in national and regional markets, we are also building the necessary capabilities to accelerate the expansion of our presence in the small market segment with strategic investments in talent, capabilities and technology.

我們的目標細分市場策略是我們利潤擴張努力的關鍵支柱，隨著我們在每個細分市場中提供量身定制的解決方案，我們獲得了進一步的吸引力。隨著我們在國家和地區市場的領導地位不斷增強，我們也在建立必要的能力，透過對人才、能力和技術的策略投資，加速擴大我們在小型細分市場的業務。

To accelerate the pace at which our group business evolves, we are meeting our customers where they want to be met. Expanding our digital and self service capabilities, upgrading our underwriting technology, and reengineering our client service model. These investments, along with expanded product offerings are driving our growth. We are confident that executing our strategy can deliver sustainable results will help our group business become a more significant part of our overall business mix.

為了加快集團業務發展的步伐，我們在客戶希望的地方與他們會面。擴大我們的數位和自助服務能力，升級我們的核保技術，並重新設計我們的客戶服務模式。這些投資以及擴大的產品供應正在推動我們的成長。我們相信，執行我們的策略可以帶來可持續的成果，這將有助於我們的集團業務成為我們整體業務組合中更重要的一部分。

Now turning to retirement plan services or RPS. In RPS, our strategy is to continue growing in our core recordkeeping and institutional market segments through our differentiated service model. RPS's quarterly results were in line with our expectations. Although earnings declined year-over-year due to lower spread income, they grew 11% sequentially due to higher account balances and expense improvements. While first year sales were flat year-over-year, total deposits increased by 13%.

現在轉向退休計劃服務或 RPS。在 RPS 中，我們的策略是透過差異化的服務模式繼續發展我們的核心記錄保存和機構市場領域。RPS 的季度業績符合我們的預期。儘管由於利差收入下降，盈利同比下降，但由於帳戶餘額增加和費用改善，盈利環比增長了 11%。雖然第一年銷售額與去年同期持平，但存款總額卻增加了 13%。

And as we look ahead to the remainder of the year, we continue to have a strong pipeline of known wins across all of our segments, which we anticipate will materialize beginning in the third quarter of this year. We continue to invest in RPS, benefiting from our flexible model to enhance the products and services we offer our customers. We are also increasing the operational efficiency of this business, which is consistent with our objective to optimize our overall operating model.

當我們展望今年剩餘時間時，我們在所有細分市場中繼續擁有強大的已知勝利管道，我們預計這些勝利將在今年第三季開始實現。我們持續投資 RPS，受益於我們的靈活模式，以增強我們為客戶提供的產品和服務。我們也提高了該業務的營運效率，這與我們優化整體營運模式的目標是一致的。

In closing, I want to reiterate our conviction in our strategic repositioning. We see substantial opportunity to continue transforming Lincoln. Our foundation is built on at-scale retail and workplace businesses with leading distribution and a strengthened balance sheet. Our focus is on leveraging our competitive advantages to evolve our businesses, enhance differentiation, and create a platform for sustainable growth, increasing profitability, operational efficiency, and greater capital flexibility.

最後，我想重申我們對策略重新定位的信念。我們看到了繼續改造林肯的巨大機會。我們的基礎是建立在大規模零售和工作場所業務之上，擁有領先的分銷和強化的資產負債表。我們的重點是利用我們的競爭優勢來發展我們的業務，增強差異化，並創建一個可持續成長的平台，提高獲利能力、營運效率和更大的資本靈活性。

Our strong second quarter performance sets the stage for further momentum. We are confident in our ability to deliver results that will drive long-term value creation for our shareholders. I look forward to sharing further updates with you in the coming quarters.

我們強勁的第二季業績為進一步的發展動能奠定了基礎。我們相信我們有能力交付成果，為股東創造長期價值。我期待在未來幾季與您分享更多最新消息。

With that let me now turn the call over to Chris.

現在讓我把電話轉給克里斯。

Thank you, Ellen, and good morning, everyone. Our second quarter results demonstrated further execution against our strategic priorities, and our underlying results came in at the high end of our expectations. I'm going to focus on three areas this morning.

謝謝你，艾倫，大家早安。我們第二季的業績證明了我們對策略重點的進一步執行，我們的基本業績超出了我們的預期。今天早上我將重點放在三個領域。

First, I'll recap our second quarter results, including a review of our segment level financials. Second, I'll touch on capital and third I'll review our investment portfolio. So let's start with a recap of the quarter.

首先，我將回顧我們第二季的業績，包括對我們部門財務狀況的回顧。其次，我將談談資本，第三我將回顧我們的投資組合。讓我們先回顧一下本季的情況。

This morning, we reported second quarter adjusted operating income available to common stockholders of $319 million or $1.84 per share. There were no significant items in the quarter, but there were two normalizing items.

今天早上，我們報告了第二季普通股股東調整後的營業收入為 3.19 億美元，即每股 1.84 美元。本季沒有重大項目，但有兩個正常化項目。

First, our alternative investments portfolio delivered a 4% annualized return in the quarter were $36 million. On an after-tax basis, this amount was $41 million below our return target were $0.23 per share. Second, there was a $23 million benefit in group protection due to the timing of an experienced refund. I'll touch on this further when discussing our segment results.

首先，我們的另類投資組合在本季實現了 4% 的年化報酬率為 3,600 萬美元。以稅後計算，這筆金額比我們每股 0.23 美元的回報目標低 4,100 萬美元。其次，由於經驗豐富的退款時機，團體保障有 2,300 萬美元的收益。在討論我們的部門結果時，我將進一步討論這一點。

Now turning to net income for the quarter. We reported net income available to common stockholders of $884 million, or $5.11 per diluted share. The difference between net and adjusted operating income was predominantly driven by three factors that impacted net income.

現在轉向本季的淨利潤。我們報告普通股股東可獲得的淨利潤為 8.84 億美元，即稀釋後每股收益 5.11 美元。淨收入和調整後營業收入之間的差異主要由三個影響淨收入的因素所驅動。

The first was a favorable impact of $436 million related to the closing of the sale of our wealth management business. The second was a favorable impact of $198 million within nonoperating income. This was driven by a net positive movement in market risk benefits that resulted from higher interest rates and equity markets in the second quarter and was inclusive of hedge program performance.

第一個是與完成財富管理業務出售相關的 4.36 億美元的有利影響。第二個是營業外收入 1.98 億美元的有利影響。這是由第二季利率和股市上漲導致的市場風險收益淨正變動所推動的，其中包括對沖計畫的表現。

The third was a positive change of $158 million in the fair value of the GAAP embedded derivative related to our Fortitude Re reinsurance transaction. This change was primarily driven by the impact of higher interest rates on available-for-sale securities in the funds withheld portfolio backing the agreements with the corresponding offset flowing through accumulated other comprehensive income or AOCI. Partially offsetting these positive impacts were GAAP accounting losses driven by the expected turnover of assets like Fortitude Re in our reinsured block.

第三個是與我們的 Fortitude Re 再保險交易相關的 GAAP 嵌入式衍生性商品的公允價值發生了 1.58 億美元的正面變化。這項變更主要是由於支持協議的基金預扣投資組合中可供出售證券利率上升的影響，以及透過累積其他綜合收益或 AOCI 流動的相應抵銷。我們再保險區塊中的 Fortitude Re 等資產的預期週轉導致的 GAAP 會計損失部分抵消了這些正面影響。

Now turning to the segment results. Let's start with group, which reported a record quarter with operating income of $130 million and a margin of 10% compared to $109 million in the prior year quarter and a margin of 8.6%. Of note, included in this quarter's result was a $23 million benefit within our disability results from the timing of an annual experience refund related to One State's Paid family Leave Program.

現在轉向細分結果。讓我們從集團開始，該集團報告了創紀錄的季度營業收入為 1.3 億美元，利潤率為 10%，而去年同期為 1.09 億美元，利潤率為 8.6%。值得注意的是，本季的業績包括與一州帶薪家事假計畫相關的年度體驗退款時間所帶來的 2,300 萬美元的殘障福利。

In prior years, this benefit was recognized in the third quarter. Excluding this benefit, group's operating income was $107 million and a margin of 8.2%. Group's results this quarter are a continued reflection of the execution of our strategy to diversify our book of business and maintain discipline in our pricing actions. Additionally, the benefits from the favorable macro backdrop, including low unemployment and a supportive interest rate environment persisted in the quarter.

往年，這項收益在第三季就得到了確認。不計此收益，集團營業收入為 1.07 億美元，利潤率為 8.2%。集團本季的業績持續反映了我們業務多元化和維持定價行為紀律的策略執行情況。此外，本季持續受益於有利的宏觀背景，包括低失業率和有利的利率環境。

Turning to group product line results for the quarter. The group life loss ratio was 76% this quarter, 4-percentage-points higher versus the prior year quarter. The increased loss ratio was driven by severity volatility as our mortality trended towards younger age populations who typically have higher benefit amounts.

轉向本季集團產品線業績。本季團體壽險損失率為 76%，比去年同期高 4 個百分點。損失率的增加是由嚴重程度波動造成的，因為我們的死亡率趨向於通常擁有更高福利金額的年輕族群。

For disability, the loss ratio was 66% this quarter, decreasing by approximately 5-percentage-points year-over-year. The timing of the annual experience refund accounted for 4-percentage-points of this improvement.

殘疾方面，本季損失率為66%，年減約5個百分點。年度體驗返還的時間安排佔了這項改進的 4 個百分點。

The loss ratio was favorable relative to our longer-term expectations and benefited from record low claim incidents and strong LTV recoveries, enabling positive returned to work outcomes for our claimants. As we look to the second half of the year, there are a couple of items to keep in mind.

損失率相對於我們的長期預期有利，並受益於創紀錄的低索賠事件和強勁的生命週期價值恢復，為我們的索賠人帶來了積極的重返工作成果。當我們展望下半年時，有幾件事需要牢記。

First, disability results are seasonally favorable in the first half of the year, and we expect moderation of the strong results in the third and fourth quarters, consistent with historical trends. And second, as I mentioned earlier, our third quarter results have historically included the benefit from the annual experience refund.

首先，上半年的殘障業績季節性有利，我們預期第三季和第四季的強勁業績將有所放緩，這與歷史趨勢一致。其次，正如我之前提到的，我們第三季的業績歷來包括年度體驗退款的收益。

Overall group results continue to reflect our commitment to an execution against our margin expansion strategy. And while the results in the second half of the year will moderate relative to the record results we experienced in the first half. We remain confident that our results will be at the high end of our 50 basis points to 100 basis points of expected margin expansion in 2024.

集團整體績效持續反映了我們對執行利潤擴張策略的承諾。雖然下半年的業績將相對於上半年創紀錄的業績放緩。我們仍有信心，我們的業績將達到 2024 年預期利潤率擴張 50 個基點至 100 個基點的上限。

Now turning to annuities. Annuities reported operating income of $297 million compared to $271 million in the prior year quarter. On a sequential basis, results improved $7 million, excluding the unfavorable significant items that impacted first quarter results. The year over year and sequential improvements were broad-based, driven by higher account balances, increased spread income and reduced expenses.

現在轉向年金。年金報告營業收入為 2.97 億美元，去年同期為 2.71 億美元。剔除影響第一季業績的不利重大項目，業績則是環比成長 700 萬美元。在帳戶餘額增加、利差收入增加和費用減少的推動下，同比和環比的改善是廣泛的。

Turning to account balances. Ending account balances totaled $160 billion, a 5% increase versus the prior year quarter, as higher equity markets more than offset the impact of outflows. Overall outflow levels were elevated in the quarter, which was expected given the higher interest rate environment and strong equity market performance.

轉向帳戶餘額。期末帳戶餘額總計 1,600 億美元，比上年同期增長 5%，因為股市上漲足以抵消資金外流的影響。鑑於較高的利率環境和強勁的股市表現，本季整體流出水準有所上升，這是預期的。

However, net flows improved relative to the first quarter due to strong sales in both fixed and variable annuities. At the end of the quarter, general account products represented more than 25% of total account balances as we continue to focus on expanding our spread and spread like product lines.

然而，由於固定年金和可變年金的強勁銷售，淨流量相對第一季有所改善。截至本季末，隨著我們繼續專注於擴大利差和利差類產品線，普通帳戶產品佔帳戶總餘額的比例超過 25%。

RILA now represents 20% of total account balances up 4-percentage-points versus the prior year quarter. This quarter's results reflect not only the strength of our in-force annuities business, but also our continued execution of our product mix shift. Our annuities business remains well positioned to deliver strong earnings second half of the year.

RILA 目前佔帳戶餘額總額的 20%，比去年同期增加了 4 個百分點。本季的業績不僅反映了我們有效年金業務的實力，也反映了我們對產品結構轉變的持續執行。我們的年金業務仍然處於有利地位，可以在今年下半年實現強勁的盈利。

Now turning to retirement plan services, which reported operating income of $40 million compared to $47 million in the prior year quarter. The decline was primarily driven by elevated participant driven stable value outflows over the last 12 months, resulting from higher interest rates, partially offset by reduced net G&A expenses.

現在轉向退休計畫服務，該服務的營業收入為 4,000 萬美元，而去年同期為 4,700 萬美元。下降的主要原因是過去 12 個月參與者驅動的穩定價值流出增加，這是由於利率上升造成的，但部分被淨 G&A 費用減少所抵消。

However, results increased by $4 million or 11% sequentially due to higher account balances and lower net G&A expenses. Our base spread for the quarter was 103 basis points compressing roughly 15 basis points compared to the prior year quarter. In the current rate environment, we expect spreads to stabilize at around 100 basis points in the second half of the year.

然而，由於帳戶餘額增加和淨 G&A 費用減少，業績環比增長了 400 萬美元，即 11%。我們本季的基本利差為 103 個基點，與去年同期相比壓縮約 15 個基點。在目前利率環境下，我們預計下半年利差將穩定在100個基點左右。

While stable value outflows persisted in the quarter. The quarterly trend continues to be encouraging, and we experienced our lowest level of stable value outflows in the last seven quarters.

本季價值持續穩定流出。季度趨勢繼續令人鼓舞，我們經歷了過去七個季度中最低水準的穩定價值流出。

Now turning to account balances. Average account balances for the quarter increased over 13% year-over-year, and end-of-period account balances were nearly $108 billion, up 12% versus the prior year quarter. Overall, the sequential improvement reflects our disciplined focus on revenue growth and continued focus on expense efficiencies, and we remain well positioned to deliver solid earnings in the coming quarters.

現在轉向帳戶餘額。本季平均帳戶餘額年增超過 13%，期末帳戶餘額接近 1,080 億美元，比去年同期成長 12%。總體而言，環比的改善反映了我們對收入成長的嚴格關注以及對費用效率的持續關注，並且我們仍然處於有利位置，可以在未來幾個季度實現穩健的收益。

Lastly, turning to life insurance. Life reported an operating loss of $35 million compared to operating income of $33 million in the prior year quarter as the run rate impacts of the Fortitude Re transaction and below target alternative investment income were partially offset by lower expenses.

最後，轉向人壽保險。人壽保險報告的營業虧損為 3500 萬美元，而去年同期的營業收入為 3300 萬美元，原因是 Fortitude Re 交易對運行率的影響以及低於目標的另類投資收入被較低的費用部分抵消。

Mortality in the retail life business was in line with expectations this quarter as slightly elevated mortality in our universal life business, driven by a small number of high fees amount claims was offset by favorability in our term business.

本季零售壽險業務的死亡率符合預期，因為我們的萬能壽險業務死亡率因少數高額索賠而略有上升，但被我們定期業務的優惠所抵消。

Net G&A expenses for the quarter were down $11 million versus the prior year quarter, reflecting the targeted expense reductions we made in the first half of the year. Overall, while lower alternative investment income pressured life's reported earnings this quarter, the underlying result was in line with our expectations, reflecting the strategic actions we've been taking to improve the earnings profile of this business.

本季的淨 G&A 費用比去年同期減少了 1,100 萬美元，反映了我們在上半年制定的費用削減目標。整體而言，雖然另類投資收入下降給本季人壽報告的獲利帶來壓力，但基本結果符合我們的預期，反映了我們為改善該業務的獲利狀況而採取的策略行動。

We expect favorability from mortality seasonality and the actions we have taken on expenses to support improvement in the life business in the second half of the year.

我們預計死亡率季節性因素以及我們為支持下半年壽險業務改善而採取的費用行動將帶來有利影響。

Let me now touch briefly on company-wide expenses. Managing expenses remain the key strategic area of focus. In the first quarter, we announced actions that were focused on reducing organizational complexity resulting in a reduction in headcount across the organization in addition to the ongoing efforts focused on removing unnecessary discretionary spending. As a result of these actions, excluding significant items from the first quarter of this year, G&A expenses have declined both sequentially and year-over-year.

現在讓我簡單談談公司範圍內的開支。管理費用仍然是關鍵的策略重點領域。在第一季度，除了持續努力消除不必要的可自由支配支出外，我們還宣布了旨在降低組織複雜性的行動，從而減少了整個組織的員工人數。由於這些行動，排除今年第一季的重要項目，一般管理費用較上季和年比均有所下降。

As we think about expenses more broadly, I want to highlight three items. First, seasonal items, particularly higher sales volumes drive sequential expense growth over the course of the year. We saw those impacts in the second quarter, and we'll continue to experience this impact in the second half of the year.

當我們更廣泛地考慮支出時，我想強調三項。首先，季節性商品，特別是較高的銷售量推動全年費用較上季成長。我們在第二季度看到了這些影響，並將在下半年繼續經歷這種影響。

Second, we continue to evaluate opportunities to invest in talent, process efficiencies, and technology to improve the overall profitability of our business. And third, while the financial outcomes from our actions earlier this year, strengthen the efficiency of our operations, we continue to see further opportunity to rationalize our expense base while growing the franchise alongside our strategic objectives.

其次，我們持續評估人才、流程效率和技術方面的投資機會，以提高我們業務的整體獲利能力。第三，雖然我們今年稍早採取的行動的財務成果提高了我們的營運效率，但我們繼續看到進一步的機會來合理化我們的費用基礎，同時根據我們的策略目標發展特許經營權。

Shifting to capital. We ended the quarter with an estimated RBC ratio above 420%. As a reminder, our target RBC ratio is 400%, and we view a 420% RBC level, as allowing a buffer to maintain our target RBC during a recessionary environment.

轉向資本。本季結束時，我們估計 RBC 比率高於 420%。提醒一下，我們的目標 RBC 比率是 400%，我們認為 420% RBC 水準是在經濟衰退的環境下為維持我們的目標 RBC 提供緩衝。

As we discussed last quarter, the sequential improvement was driven by the completion of the sale of our wealth management business to Osaic, delivering roughly $650 million of statutory capital benefits.

正如我們上季度所討論的，連續改善是由於完成將我們的財富管理業務出售給 Osaic，帶來了約 6.5 億美元的法定資本收益。

Our leverage ratio improved 120 basis points sequentially to 28.9%, driven by the after-tax gain related to the close of the Osaic transaction and paydown of outstanding debt of over $50 million.

受 Osaic 交易結束和償還超過 5000 萬美元未償債務相關的稅後收益的推動，我們的槓桿率環比提高了 120 個基點，達到 28.9%。

Overall, as Ellen mentioned, achieving an RBC ratio above 420% is a key milestone, reflecting the targeted actions we've taken to rebuild and protect capital and should provide significantly greater capital flexibility over the next few years.

總體而言，正如Ellen 所提到的，實現RBC 比率高於420% 是一個重要的里程碑，反映了我們為重建和保護資本而採取的有針對性的行動，並且應該在未來幾年內提​​供顯著更大的資本靈活性。

Lastly, I want to provide an update on our newly licensed Bermuda-based reinsurance subsidiary, Alpine. In June, the Bermuda Monetary Authority issued a Class E license for Alpine, a wholly owned subsidiary of LNC. Additionally, we executed an initial reinsurance transaction covering in-force blocks of fixed indexed annuities and certain group disability business to drive scale into the entity. Looking ahead, Alpine will operate as an affiliated life and annuity reinsurance company. We are very pleased to join the Bermuda marketplace.

最後，我想介紹一下我們新獲得許可的百慕達再保險子公司 Alpine 的最新情況。6月，百慕達金融管理局為LNC全資子公司Alpine頒發E級執照。此外，我們還執行了一項初始再保險交易，涵蓋有效的固定指數年金和某些團體傷殘業務，以擴大實體規模。展望未來，阿爾派將作為一家附屬人壽和年金再保險公司運作。我們很高興加入百慕達市場。

The creation of Alpine and the increased reinsurance capacity centered around affiliate flow reinsurance for new business will support our strategy of improving free cash flow and ensuring a competitive presence in the products and markets that are in line with our long-term strategic objectives. We expect to achieve the initial phase of this new business flow support later in 2024 or early 2025.

Alpine 的創建以及以新業務聯盟流量再保險為中心的再保險能力的增強，將支持我們改善自由現金流的策略，並確保在符合我們長期戰略目標的產品和市場上具有競爭力。我們預計將在 2024 年稍後或 2025 年初實現此新業務流支援的初始階段。

Now moving to investments. Overall performance was solid and continues to reflect the high-quality nature of our portfolio. The portfolio remains 97% investment grade and continued to deliver positive net ratings migrations.

現在轉向投資。整體表現穩健，持續體現了我們投資組合的高品質。該投資組合仍保持 97% 的投資評級，並繼續實現積極的淨評級遷移。

Similar to last quarter, I want to provide three updates on the portfolio: First on our general account optimization efforts, 2, on our commercial mortgage loan and third, on our alternative investment performance.

與上季類似，我想提供三個關於投資組合的更新：首先是我們的一般帳戶優化工作，2是我們的商業抵押貸款，第三是我們的另類投資績效。

Starting with the progress on our general account portfolio optimization efforts, where we continue to leverage our multi-manager platform to drive increased value to the organization. We experienced sequential improvement in our new money yield in the second quarter with new money invested at a 6.9% yield.

從我們的一般帳戶投資組合優化工作的進展開始，我們繼續利用我們的多經理平台為組織增加價值。第二季度，我們的新資金收益率持續改善，新資金投資收益率為 6.9%。

While a portion of this increase was driven by higher rates, the primary driver was a targeted shift in our asset mix to less liquid assets and high quality structured products. As we look ahead to the second half of the year, we expect continued progress as we execute our optimization strategy, which will further support spread earnings and product competitiveness.

雖然這種成長的部分原因是利率上升，但主要驅動因素是我們的資產組合有針對性地轉向流動性較低的資產和高品質的結構性產品。展望下半年，我們預計在執行優化策略時將繼續取得進展，這將進一步支持利差收益和產品競爭力。

Next, a brief update on our commercial mortgage loan portfolio. The portfolio remains high quality and represents 15% of total invested assets with office representing only 2.9% of total invested assets. Office is going through a longer-term transition and there are headwinds in the sector, but we believe we are well positioned to navigate the environment.

接下來，我們簡單介紹一下我們的商業抵押貸款組合。此投資組合保持高品質，佔總投資資產的 15%，而辦公室僅佔總投資資產的 2.9%。Office 正在經歷長期轉型，該行業存在一些阻力，但我們相信我們已做好應對環境的有利條件。

As discussed on prior calls, near term maturities within our office portfolio remain manageable and are conservatively positioned from a debt service coverage and loan to value perspective. additional details on our CML portfolio can be found in quarterly earnings supplement.

正如先前電話會議中所討論的那樣，我們辦公室投資組合的近期到期期限仍然可控，並且從償債覆蓋率和貸款價值比的角度來看，其定位保守。有關我們 CML 投資組合的更多詳細信息，請參閱季度收益補充資料。

Lastly, our alternative investments generated a quarterly return of 1% this quarter below our quarterly expectation of 2.5%. As a reminder, our alternatives portfolio is comprised of a diverse mix of private equity and real asset strategies with relatively small allocations to hedge fund and real estate related strategies.

最後，我們的另類投資本季的季度回報率為 1%，低於我們 2.5% 的季度預期。提醒一下，我們的另類投資組合由私募股權和實體資產策略的多樣化組合組成，對沖基金和房地產相關策略的配置相對較少。

However, over the last several quarters, our returns have been slightly below expectations, primarily due to lower merger and acquisition activity, which has reduced the pace of realizations in certain private equity strategies and higher interest rates, which can negatively impacted valuations on sub strategies such as real estate.

然而，在過去的幾個季度中，我們的回報率略低於預期，主要是由於併購活動減少，這降低了某些私募股權策略的實現速度，而且利率上升，這可能對子策略的估值產生負面影響例如房地產。

As we look ahead to the third quarter, similar to recent quarters, we expect alternative investment returns to be moderately below the 2.5% expectation. In closing, I want to reiterate three points. First, building a strong capital foundation has been a primary focus. With the execution of key strategic initiatives over the last year, including the closing of the sale of our wealth management business this quarter, we have made significant progress towards building the capital foundation that will support enterprise stability across market cycles and ensure investment for profitable growth.

展望第三季度，與最近幾季類似，我們預期另類投資報酬率將略低於 2.5% 的預期。最後，我想重申三點。首先，夯實資本基礎是首要任務。隨著去年關鍵策略舉措的執行，包括本季度完成財富管理業務的出售，我們在建立資本基礎方面取得了重大進展，將支持企業跨市場週期的穩定性並確保投資實現盈利增長。

Second, momentum in our earnings this quarter reflects the progress being made from our operating model optimization efforts and ongoing expense discipline. And third, while we are pleased with the progress we've made, our overall focus remains unchanged as we execute against our longer-term strategic objectives. To maintain a strong balance sheet, improved free cash flow and grow the franchise.

其次，我們本季獲利的動能反映了我們的營運模式優化工作和持續的費用紀律所取得的進展。第三，雖然我們對所取得的進展感到滿意，但在執行長期策略目標時，我們的整體重點保持不變。保持強勁的資產負債表，改善自由現金流並發展特許經營權。

With that, let me turn the call back over to Tina.

接下來，讓我把電話轉回給蒂娜。

(event instructions)

（活動說明）

(Operator Instructions) Ryan Krueger, from KBW.

（操作員說明）Ryan Krueger，來自 KBW。

Hey, Got it. Good morning. My first question was on free cash flow. Can you just -- I guess first for can you just can you give us a rough sense of what year first half of the year free cash flow was?

嘿，明白了。早安.我的第一個問題是關於自由現金流。我想首先您能給我們大致了解一下今年上半年的自由現金流嗎？

Hey, Ryan, good morning. So look, I think what I would say is you can get a sense from the growth in capital and the continued paying of the common dividend and see that we're on track relative to the longer-term outlook that we put out earlier this year. So as a reminder, the three year outlook that we had talked about was a 35% free cash flow conversion in 2023 growing to 45% to 55% in 2026.

嘿，瑞安，早安。所以，我想我想說的是，你可以從資本的增長和普通股息的持續支付中得到一些感覺，並看到相對於我們今年早些時候提出的長期前景，我們正走在正軌上。提醒一下，我們討論的三年前景是 2023 年自由現金流轉換為 35%，到 2026 年將成長到 45% 至 55%。

I think at the time, as a reminder, what we said was there's going to be puts and takes each quarter, as we make the longer-term investments to make sure that we get to that three year number that we're targeting. So I think if you step back, if you think about first quarter, right, we generated the capital that we had thought we would, and then we used some of it for severance, given some of the expense actions that we took.

我想，提醒一下，我們當時說過，每季都會有看跌期權和看跌期權，因為我們進行長期投資，以確保達到我們目標的三年數字。所以我認為，如果你退一步，想想第一季度，對吧，我們產生了我們原以為會產生的資本，然後考慮到我們採取的一些費用行動，我們將其中一些用於遣散費。

This quarter, we used some of the proceeds from Osaic as an example for deleveraging. And then we're able to set up the Alpine, whereas I think we mentioned we started the entity in an overcapitalized position as we get ready for thinking about executing on the flow deal.

本季度，我們以奧克的部分收益作為去槓桿的例子。然後我們就能夠建立阿爾派，而我想我們提到我們在資本過剩的情況下啟動了該實體，因為我們準備考慮執行流量交易。

So at the end of the day, if you think about it and step back, we're making the progress that we had thought about and communicated as part of the outlook we are on track to get to that 45% to 55%, free cash flow conversion by 2026.

因此，歸根結底，如果你想一想並退後一步，我們正在取得我們所考慮和溝通的進展，作為前景的一部分，我們有望實現 45% 至 55%，免費到 2026 年實現現金流轉換。

We've got some wood to chop still, but this quarter was a big step forward, both from getting to the [420%] RBC, bringing the leverage ratio down and executing on Alpine. So there's going to be puts and takes each quarter. I think at the end of the day, if you look at the progress that we're making relative to what we've described as the path to get to the 2026 numbers, you can feel confident that we're making the progress that we need to make.

我們還有一些工作要做，但本季是向前邁出的一大步，無論是從達到 [420%] RBC、降低槓桿率還是在 Alpine 上執行。因此，每季都會有賣出和賣出。我認為歸根結底，如果你看看我們所取得的進展相對於我們所描述的實現 2026 年數字的路徑，你就會對我們正在取得的進展充滿信心。

Thanks. And then on Bermuda, can you give us any more sense, how much capital did you originally contribute to it? What was the impact of the class you initially seeded? And then how are you thinking about the magnitude of internal reinsurance going forward?

謝謝。那麼在百慕達，你能給我們更多的了解嗎，你最初向它投入了多少資金？您最初播種的班級有什麼影響？那麼您如何看待未來內部再保險的規模？

Sure. So the establishment of the Bermuda entity is as an important step forward. It's one of the key strategic objectives that we talked about as you think about executing on competing in the products and markets that are going to be critical to achieving our strategic objectives over the next couple of years. So really thinking about growth and spread and spread like products.

當然。因此，百慕達實體的成立是向前邁出的重要一步。這是我們在考慮執行產品和市場競爭時討論的關鍵策略目標之一，這對於未來幾年實現我們的策略目標至關重要。所以真正像產品一樣思考成長、傳播和傳播。

I think step one for us was to establish the entity. We worked with Bermuda for the past year. We got licensed this quarter. We feel really good about that. We ceded about $7 billion plus or minus in fixed annuities and then a little bit less than that in disability reserves. And really the goal there is to create scale at inception and a block that will throw off free cash flow going forward.

我認為我們的第一步是建立實體。去年我們與百慕達合作。我們本季獲得了許可。我們對此感覺非常好。我們在固定年金中放棄了約 70 億美元上下，然後比傷殘準備金略少一些。實際上，我們的目標是在成立之初就形成規模，並形成一個阻礙未來自由現金流的障礙。

I will also say that we overcapitalized the entity relative to its long-term target, again, with the goal of being able to execute an internal flow deals on the next couple of quarters. We're not going to get into all the different puts and takes capital for LNL versus Alpine. The capital still in the system. But you can get a sense for the scale relative to the reserves that we move down there.

我還要說的是，我們再次對該實體進行了相對於其長期目標的過度資本化，目標是能夠在接下來的幾個季度執行內部流動交易。我們不會考慮 LNL 與 Alpine 的所有不同看跌期權和資金。資本仍在系統內。但你可以了解相對於我們轉移到那裡的儲備的規模。

At the end of the day, the next step will be to execute on a new business flow reinsurance agreement. We're working through that now. I think over time, there will be a number of different products that look attractive in Bermuda. As an example, fixed annuities, we do have a flow deal in place with an external partner, but we also retain a substantial amount of the sales that we generate there. So one example I think fixed annuities work very well in the economic framework that is Bermuda. So more to come, but it's a good step, and we're really pleased with the progress.

最終，下一步將是執行新的業務流程再保險協議。我們現在正在解決這個問題。我認為隨著時間的推移，百慕達將會出現許多看起來有吸引力的不同產品。以固定年金為例，我們確實與外部合作夥伴達成了流量交易，但我們也保留了在那裡產生的大量銷售。我認為固定年金在百慕達的經濟框架中運作良好的一個例子。還會有更多的事情發生，但這是一個很好的一步，我們對進展感到非常滿意。

Great. Thanks a lot.

偉大的。多謝。

Nick Lu, Evercore.

尼克·盧，Evercore。

Thank you. So for the group protection sales was very strong year over year. Just wanted to in line with some recent peer commentary on elevated pricing competition. Just wanted to see how comfortable are you guys feel about the pricing adequacy and new sales going from here? Thank you.

謝謝。因此，團體保護銷售年比非常強勁。只是想與最近一些同業對價格競爭加劇的評論保持一致。只是想看看你們對這裡的定價充足性和新銷售感覺如何？謝謝。

Sure. So I'm happy to take that and good morning. So we -- what we have seen is that first of all, the environment as it relates to group and sales, has been and remains competitive. Having said that, we are not seeing any noticeable change in the landscape. We view the market as competitive and it always has been but largely rational.

當然。所以我很高興接受這一點，早安。因此，我們所看到的是，首先，與集團和銷售相關的環境一直並且仍然具有競爭力。話雖如此，我們並沒有看到情況有任何明顯的變化。我們認為市場具有競爭性，而且一直以來都在很大程度上是理性的。

We have seen an uptick in some new entrants into the market, most of those carriers tend to start in the small market segment. And at this point in time, those new entrants, they have not had a material impact on the market to date.

我們看到一些新進入市場的公司有所增加，其中大多數營運商往往都是從小型細分市場起步。目前，這些新進入者尚未對市場產生重大影響。

I want to also just mention that success in the group business is very much predicated on really having the proper balance as we have been messaging between prioritizing margin over growth and then importantly, operational and service needs and the capabilities and the infrastructure that are required to really service, serve and grow the group protection business are just critical, in terms of how to think about ultimately being successful in this business.

我還想提一下，集團業務的成功很大程度上取決於真正實現適當的平衡，因為我們一直在優先考慮利潤而不是增長之間傳遞信息，然後重要的是，運營和服務需求以及所需的能力和基礎設施就如何思考最終在該業務中取得成功而言，真正服務、服務和發展團體保護業務至關重要。

So as we've mentioned, we are very much targeting differentiated strategies across market. And we're also in the process of refreshing all of our products. We very much remain disciplined as it relates to pricing and that's reflected in the fact that we've got 3% overall premium growth. That's a combination of new business and also renewal pricing. And we feel very comfortable in terms of where we are and how again we are prioritizing that margin overgrowth.

正如我們所提到的，我們非常注重跨市場的差異化策略。我們也正在更新我們所有的產品。我們在定價方面仍然非常嚴格，這反映在我們的整體保費成長了 3%。這是新業務和續訂定價的結合。我們對自己的處境以及我們如何再次優先考慮利潤率過度成長感到非常滿意。

Thank you. And the follow-up is on annuities. Sales was also very strong, both year over year and sequentially, especially on fixed annuities. Was there any particular key driver that you would point to, as to what was behind that? Thank you.

謝謝。後續是年金。銷售也非常強勁，無論是同比還是環比，尤其是固定年金。您是否會指出背後的任何特定關鍵驅動因素？謝謝。

Sure. So we are very pleased with our 48% overall year-over-year increase in annuity sales. As we mentioned in our upfront remarks, annuity sales for the quarter came in at $3.8 billion, and we saw a very significant increase in our fixed annuity sales. We spent the better part of last year, building a number of the operational capabilities that were required to be able to have a consistent presence in the fixed market.

當然。因此，我們對年金銷售額年增 48% 感到非常滿意。正如我們在前面的評論中提到的，本季年金銷售額為 38 億美元，我們看到固定年金銷售額出現了非常顯著的成長。在去年的大部分時間裡，我們建立了一些能夠在固定市場保持穩定地位所需的營運能力。

And so examples of that, and Chris mentioned one of them was to put an attractive flow agreement in place with an external provider of that. We also focused on leveraging our distribution relationships, and we established consistent shelf space with some of our key strategic partners. And we also refined and are utilizing our strategic asset allocation.

克里斯提到的例子之一是與外部提供者簽訂有吸引力的流量協議。我們也專注於利用我們的分銷關係，並與一些主要策略合作夥伴建立了一致的貨架空間。我們也完善並正在利用我們的策略資產配置。

And going forward, as Chris mentioned, we also have the opportunity now that we have our Bermuda affiliated reinsurer center to leverage that to continue to drive sales and growth in the fixed market. We also, although we saw RILA sales year over year relatively flat, down about 2%, we saw a sequential increase there of over 15%.

展望未來，正如克里斯所提到的，我們現在也有機會，因為我們擁有百慕達附屬再保險公司中心，可以利用這一點繼續推動固定市場的銷售和成長。我們還發現，儘管 RILA 銷售額比去年同期相對持平，下降了約 2%，但環比增長超過 15%。

And RILA has been an important product segment for us. We were one of the earlier entrants into the RILA market, more than five years ago. We continue to maintain a significant competitive presence there. And in the quarter we refreshed our RILA product and we have some unique features that we offer in our RILA products that enable us to compete there on product features overprice, which we think is very valuable.

RILA 一直是我們的重要產品領域。五年多前，我們是較早進入 RILA 市場的公司之一。我們繼續在那裡保持顯著的競爭優勢。在本季度，我們更新了 RILA 產品，我們在 RILA 產品中提供了一些獨特的功能，使我們能夠在產品功能價格過高方面進行競爭，我們認為這是非常有價值的。

And then as you all know, variable annuity has been and continues to be an important part of our overall annuity strategy. VA with guarantees represented about 16% of our overall annuity sales. We're comfortable with annuities at that level, we're achieving good target returns, and we feel again, very good about where we are.

眾所周知，可變年金一直是並將繼續是我們整體年金策略的重要組成部分。有擔保的 VA 約占我們年金總銷售額的 16%。我們對這個水平的年金感到滿意，我們正在實現良好的目標回報，並且我們再次對我們所處的位置感到非常滿意。

Suneet Kamat, Jefferies.

蘇尼特·卡馬特，傑弗里斯。

Thanks. Good morning. I wanted to start off on expenses. Obviously, you've talked about expense improvement is pretty important part of the free cash flow improvement story. So I just wanted to get a sense of maybe what sort of target is and what's really the best way to measure it?

謝謝。早安.我想從開支開始。顯然，您已經談到費用改善是自由現金流改善故事中非常重要的一部分。所以我只是想了解一下目標是什麼類型以及衡量目標的最佳方法是什麼？

Because obviously you're making some efficiency moves, but then you're also investing in the business, so I think externally, sometimes it's hard to actually see that progress. So are there some metrics that you would point us to kind of track how you're performing against that?

因為顯然你正在採取一些效率舉措，但你也在對業務進行投資，所以我認為從外部來看，有時很難真正看到這種進展。那麼，您是否會向我們提供一些指標來追蹤您的表現？

Hey, good morning, Suneet. Thanks for the question. So I think big picture, one of the framing points that we've made in the past is, if you go back a couple of years, G&A expenses in aggregate are up $200 million for the company, right? And so just as a starting point, given the environment that we're in, there certainly seems room for optimization. So that's the first big picture for me.

嘿，早上好，蘇妮特。謝謝你的提問。所以我認為，從大局來看，我們過去提出的框架點之一是，如果你回到幾年前，公司的一般管理費用總計增加了 2 億美元，對嗎？因此，作為一個起點，考慮到我們所處的環境，似乎確實存在著優化的空間。這是我的第一張大圖。

I think, to your specific question, if you look at a business unit level, that's probably the best way to go about it because for each business, there's going to be different metrics and different need for investment versus room for optimization. Group is a great example, where we're seeing a lot of investment and it'll come through in higher expenses, but the offset will be better margins overall.

我認為，對於你的具體問題，如果你考慮業務部門級別，這可能是最好的方法，因為對於每個業務來說，都會有不同的指標和不同的投資需求與優化空間。集團就是一個很好的例子，我們看到了大量的投資，並且會帶來更高的費用，但抵銷的將是整體利潤率的提高。

On the life side, I think if you look at the quarter, second quarter net G&A expenses were $125 million, down from $130 million last quarter and a year ago, $136 million, right? And so we see opportunity in each of the different businesses, that's slightly different. We continue to make investments where we need. But at the end of the day, we just think in aggregate, there should be a significant expense to come out over the next couple of years.

在生活方面，我認為如果你看一下本季度，第二季度的淨 G&A 費用為 1.25 億美元，低於上季度的 1.3 億美元和一年前的 1.36 億美元，對嗎？因此，我們在每個不同的業務中都看到了機會，這略有不同。我們繼續在需要的地方進行投資。但歸根結底，我們只是認為總體而言，未來幾年應該會產生大量費用。

We started that this year, we see more room to go. And I think ultimately, it's incumbent on us to highlight the metrics that we think are critical at a business unit level, and that's something that we continue to look at. You can look at the operating expense ratio for the company. Obviously, to the degree that the denominator has some volatility in it, we try to normalize for that.

我們從今年開始，我們看到還有更多的空間。我認為最終，我們有責任強調我們認為在業務部門層面至關重要的指標，這是我們繼續關注的事情。您可以查看該公司的營業費用率。顯然，如果分母具有一定的波動性，我們會嘗試將其標準化。

But generally speaking, I would say when you look at a business unit level, you should see in aggregate the G&A expenses come down and then in certain pockets expenses reflecting investment but coming through in other ways in terms of margin. Does that help?

但一般來說，我想說，當你看一個業務部門層面時，你應該看到總的一般管理費用下降，然後在某些反映投資的支出中，但在利潤方面以其他方式體現。這樣有幫助嗎？

Yeah, that's helpful. And obviously, any more detail you guys can provide would be helpful as well.

是的，這很有幫助。顯然，你們能提供的任何更多細節也會有所幫助。

In terms of my follow-up, I wanted to follow up on annuities. Ellen it looks like second quarter here was going to be a record for the industry. And I just wanted to get your thoughts on, what's behind that. How sustainable is that? And are you seeing any irrational behavior in terms of your competitors so maybe perspective on the industry would be helpful and then a perspective on Lincoln, if you could. Thanks.

就我的跟進而言，我想跟進年金。艾倫，看來第二季將創下該產業的紀錄。我只是想了解您的想法，背後的原因是什麼。這有多可持續？您是否看到競爭對手有任何不合理的行為，因此也許對行業的看法會有所幫助，然後如果可以的話，對林肯的看法會有所幫助。謝謝。

Sure. So we continue exactly to your point to see, first of all, that there's just significant customer demand and we think it's a combination of a couple of things. Number one is that we know that there is a demographic trend here where we have more Americans turning 65 this year and for the next 4 years than we ever have in history. And so you really have a need for deferred savings and for retirement planning is one thing.

當然。因此，我們繼續按照您的觀點首先看到，客戶需求很大，我們認為這是多種因素的結合。第一，我們知道這裡有一種人口趨勢，即今年和未來 4 年年滿 65 歲的美國人比歷史上任何時候都要多。因此，您確實需要延期儲蓄，而退休計劃是一回事。

And secondly, and we know that interest rates are still at relatively higher than they certainly had been for the previous decade. So that is another thing that is also driving some of the customer value proposition.

其次，我們知道利率仍然比過去十年相對較高。因此，這也是推動某些顧客價值主張的另一件事。

And then we also know that some of the operational capabilities that we just talked about that we built last year that had a number of competitors have built similar types of capabilities as well, that enabled them to be in the annuity space as well.

然後我們也知道，我們剛剛談到的一些營運能力是我們去年建立的，許多競爭對手也建立了類似類型的能力，這使他們也能夠進入年金領域。

So we think all of that is factoring in. Similar to what I had said previously about group is that annuity and the annuity landscape is definitely competitive. We are all from best that we can see being largely rational. And we are ensuring importantly, that we are achieving our target returns.

所以我們認為所有這些都被考慮在內。與我之前關於團體所說的類似，年金和年金格局絕對是競爭激烈的。我們都來自最好的，我們可以看到在很大程度上是理性的。重要的是，我們要確保我們實現目標回報。

And we've talked about the fact that capital efficiency is important to us and ensuring that we've got the appropriate risk-adjusted returns in our annuity products in each of the segments, in aggregate and across all of our products. So I hope that helps, Suneet.

我們已經討論過這樣一個事實，即資本效率對我們很重要，並確保我們的年金產品在每個細分市場、總體上以及我們所有產品中獲得適當的風險調整回報。所以我希望這會有所幫助，Suneet。

Yeah, that's helpful. Thanks.

是的，這很有幫助。謝謝。

Wes Carmichael, Autonomous Research.

韋斯·卡邁克爾，自主研究。

Hey, good morning. Thanks for taking my question. My first question was on leverage. And now that, RBC is above your buffer. You mentioned deleveraging is a priority, but the ratio did come down a bit under 29%. And I think there's roughly $300 million of prefunded debt for margin next year. So given that, I mean, do you think there's more work to do after that maturity, or are there other pieces I'm missing?

嘿，早安。感謝您提出我的問題。我的第一個問題是關於槓桿。現在，RBC 已超出您的緩衝範圍。你提到去槓桿是當務之急，但這個比率確實下降到略低於29%。我認為明年大約有 3 億美元的預融資債務用於保證金。所以考慮到這一點，我的意思是，你認為在成熟之後還有更多的工作要做，還是我還遺漏了其他部分？

So, Wes, you're right. The leverage ratio came down. I think it peaked last year at around [30.7%], [30.8%] somewhere around there. We're now down to [28.9%]. As a reminder, what we said is the long-term goal is closer to '25. So we certainly still think there's room to go. There's work to be done. I think you can accomplish that in a couple of different ways.

所以，韋斯，你是對的。槓桿率有所下降。我認為去年的峰值約為[30.7%]、[30.8%]。我們現在已經到了[28.9%]。提醒一下，我們所說的是長期目標更接近「25」。所以我們當然仍然認為還有空間。還有工作要做。我認為你可以透過幾種不同的方式來實現這一目標。

You can continue to build equity, which obviously we did this quarter, partly just from the macro earnings of the company, but also from the gain on sales from Alpine. You can continue to look at proactively buying in debt, we did some of that this quarter as well. We repaid $50 million of our term loan.

你可以繼續建立股本，顯然我們本季就這樣做了，部分原因是公司的宏觀收益，但也來自阿爾派的銷售收益。您可以繼續考慮主動購買債務，我們本季也做了一些這樣的事情。我們償還了 5000 萬美元的定期貸款。

And then there's the combination of looking longer-term at attractive liability management tools, all of which are on the table. So at the end of the day, we also have the preferred that'll come due or we'll have the opportunity to buy in, in a couple of years that's a priority as we've talked about at length.

然後是從長遠角度考慮有吸引力的負債管理工具，所有這些工具都已擺在桌面上。因此，歸根結底，我們還有即將到期的優先股，或者我們將有機會在幾年內買入，這是我們詳細討論的優先事項。

So I think if you put all that together, you would say we're not done. We think that the end goal for leverage is lower than where it is today. And at the moment, we're balancing deploying capital into areas that achieve our goals and get the best return for the dollars invested, at the same time that we're looking to bring leverage down.

所以我想如果你把所有這些放在一起，你會說我們還沒完成。我們認為槓桿的最終目標低於今天的水平。目前，我們正在平衡將資本部署到實現我們目標並獲得投資美元最佳回報的領域，同時我們希望降低槓桿率。

Got it. Thanks Chris. And I guess my follow-up would be on the group business again and results across the industry have been very strong. And I know you expect a little moderation maybe in disability in the second half of the year. But do you think, given the environment we're in, we're probably above the top end of your 5% to 7% margin target. I think you're kind of targeting 7%. But do you think there's a little bit of room to run above that in the near term?

知道了。謝謝克里斯。我想我的後續行動將再次集中在集團業務上，整個產業的業績都非常強勁。我知道您預計下半年殘疾情況可能會有所緩和。但您是否認為，考慮到我們所處的環境，我們可能已經超出了 5% 到 7% 利潤率目標的上限。我認為你的目標是 7%。但您認為短期內還有一點超越該水準的空間嗎？

So I think that the range that we provided in terms of improvement this year still holds. So we communicated a 50 basis points to 100 basis points improvement for 2024. And as a reminder, we ended last year at 5.5%.

所以我認為我們今年提供的改進範圍仍然有效。因此，我們表示 2024 年的利率將提高 50 到 100 個基點。提醒一下，我們去年的成長率為 5.5%。

So if you look at the -- and there's a noise, right? But if you look at the first half of 2024 versus the first half of 2023, you're basically tracking at the high end of that range, right. So we're still within the range, but we're at the high end.

所以如果你看一下——有噪音，對吧？但如果你對比 2024 年上半年和 2023 年上半年，你基本上會追蹤到該範圍的高端，對吧。所以我們仍在範圍內，但我們處於高端。

And then as a reminder, as I said in the prepared remarks, there's seasonality in our group business, right, So if you look at last year's second half, I think broad strokes, the number would be somewhere around a 4% margin, 3.8%, 3.9%, somewhere around there relative to the 7.1% in the first half gets you to the 5.5%, right?

然後提醒一下，正如我在準備好的發言中所說，我們集團業務存在季節性，對吧，所以如果你看看去年下半年，我認為粗略地說，這個數字將在4% 左右，即3.8 % %、3.9%，相較於上半年的 7.1%，大約可以達到 5.5%，對嗎？

So it is important to just understand that, ours the seasonality of our group results will bring earnings down relative to the second quarter and first quarter. But year-over-year, you'll continue to see that improvement.

因此，重要的是要了解，我們集團業績的季節性將導致收益相對於第二季和第一季下降。但與去年同期相比，您將繼續看到這種改進。

The last thing just to I mean, like we said in the prepared remarks, but just to reiterate the benefit that we received this quarter from the experience refund, we normally get in third quarter, we got it in second quarter this year.

我的最後一件事是，就像我們在準備好的發言中所說的那樣，但只是為了重申本季度我們從體驗退款中獲得的好處，我們通常在第三季度獲得，今年我們在第第二季獲得。

So when you think about your estimates, just make sure that you're factoring that in. At the end of the day, we relative to the first half and what we see at the moment, we still think the prior guidance holds, and it's probably at the higher end of that range to your point.

因此，當您考慮估算時，請確保將其考慮在內。歸根結底，相對於上半年和我們目前所看到的情況，我們仍然認為先前的指導是成立的，而且對於您的觀點來說，它可能處於該範圍的較高端。

Thank you.

謝謝。

Brian Meredith, UBS.

布萊恩·梅雷迪思，瑞銀集團。

Hi this is, Tucker on for Brian. My first question is on group. You mentioned the higher mortality amongst the younger age group. Could you kind of unpack that a little more and what's kind of driving that trend and how you see it going forward? And additionally, are there any other age groups that you're seeing higher mortality in? Thank you.

大家好，我是塔克，替補布萊恩。我的第一個問題是關於團體的。您提到年輕族群的死亡率較高。您能否進一步解釋一下是什麼推動了這一趨勢以及您如何看待它的未來發展？此外，您是否發現其他年齡層的死亡率較高？謝謝。

Thanks for the question. Look, I would say that it's -- you get volatility in any given quarter in our group life business. So I wouldn't read too much into it. I think the point was explaining the year over year an increase in the loss ratio. When you have a handful of claims that come through in the younger age cohorts that can just have higher mortality attached to it, because the expected earnings from those folks are higher, all else being equal.

謝謝你的提問。聽著，我想說的是，我們的團體人壽業務在任何特定季度都會出現波動。所以我不會對其進行過多的解讀。我認為重點是解釋損失率逐年增加。當年輕族群中出現一些索賠時，死亡率可能會更高，因為在其他條件相同的情況下，這些人的預期收入更高。

But at the end of the day, there's volatility in the severity in the life business -- and in the group life business. I just -- I wouldn't read too much into it from a trend, but it helps to explain what happened this quarter.

但歸根結底，人壽保險業務以及團體人壽保險業務的嚴重程度存在波動。我只是——我不會從趨勢中解讀太多，但這有助於解釋本季發生的事情。

Got it. And then my second question is on. So now that you have the RBC ratio at that 420% margin, the flexibility that Bermuda gives you. How do you kind of think about capital return going forward? And are there any opportunities for M&A that you're focused on or are you more focused on organic growth? Thank you.

知道了。然後我的第二個問題就開始了。現在您的 RBC 比率為 420%，百慕達為您提供了靈活性。您如何看待未來的資本回報？您是否關注併購機會，或者您更關注有機成長？謝謝。

Yeah. Thanks for the question. Look -- so I think I would reiterate what we discussed as part of the investor outlook. We are thinking on capital return hasn't changed. I think there are a number of steps that we need to take over the next couple of years to get to the run rate free cash flow that we've been describing, right?

是的。謝謝你的提問。所以我想我會重申我們在投資者前景中討論的內容。我們對資本回報的思考沒有改變。我認為在接下來的幾年裡，我們需要採取許多步驟才能達到我們一直在描述的運行率自由現金流，對嗎？

So moving from that 35% in '23 of free cash flow conversion to the 45% to 55%. If you go back to what we talked about earlier, this year, there are uses of capital that are required in order to get there. So part of it, as an example, is being, using capital to fund the establishment of Alpine thinking about using capital to grow deal with the expense associated with optimizing our infrastructure.

因此，自由現金流轉換率從 23 年的 35% 提高到 45% 到 55%。如果你回到我們早些時候討論過的問題，今年，為了實現這一目標，需要使用一些資本。例如，其中一部分是使用資本來資助阿爾派的建立，考慮使用資本來發展與優化我們的基礎設施相關的費用。

So if you think about severance relative to the payback, if you think about the use of capital from a deleveraging perspective, and the preferred there is a good example, which is expensive from a coupon perspective.

因此，如果你考慮相對於回報的遣散費，如果你從去槓桿化的角度考慮資本的使用，首選有一個很好的例子，從優惠券的角度來看，這是昂貴的。

So at the end of the day, our thinking hasn't changed. We think that there's a lot of opportunity for us to use capital to get to a run rate. And in fact, probably higher than what we had in 2026 over the longer term. But we are very focused on using the free cash flow that we're generating to improve the operating efficiency of the company and to make the investments that's needed for the long-term.

所以歸根究底，我們的想法沒有改變。我們認為我們有很多機會利用資本來達到運作率。事實上，從長遠來看，可能會高於 2026 年的水平。但我們非常注重利用我們產生的自由現金流來提高公司的營運效率並進行長期所需的投資。

Great. Thank you.

偉大的。謝謝。

There are no more questions at this time. I will now turn the call over to Tina Madon for closing remarks.

目前沒有更多問題。現在我將把電話轉給蒂娜·馬登（Tina Madon）做總結發言。

Thank you for joining us this morning. We're happy to address any follow-up questions you have. Please e-mail us at investorrelations@lfg.com.

感謝您今天早上加入我們。我們很樂意解答您的任何後續問題。請發送電子郵件至investorrelations@lfg.com。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。