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Exclusive Interview With The President, Insurance And Retirement Solutions: Lincoln Financial Group (LNC) - Mark Konen

67 WALL STREET, New York - July 24, 2012 - The Wall Street Transcript has just published its Insurance Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Insurance Reserves Adequacy, Low Profitability and Interest Rates, Commercial Line Brokers and Underwriters, Life and Property/Casualty Insurers

Companies include: CNO Financial (CNO); Fortegra Financial (FRF); Protective Life (PL); A.J. Gallagher (AJG); Aflac (AFL); and many more.

In the following brief excerpt from the Insurance Report, expert analysts discuss the outlook for the sector and for investors.

Mark Konen is President, Insurance and Retirement Solutions, at Lincoln Financial Group, which provides advice and solutions to help customers secure their financial futures. In this role, Mr. Konen is responsible for strategic leadership and profitability management of the life insurance, annuity and group protection businesses. In addition, he is responsible for sales and distribution for group protection. Previously, Mr. Konen served as President of the individual markets segment for Lincoln Financial Group. He has more than 30 years of experience in the insurance industry. Mr. Konen served in various senior management positions with Jefferson Pilot Financial and was Executive Vice President of Life and Annuity Manufacturing at the time of its merger with Lincoln Financial Group in 2006. Mr. Konen is a fellow of the Society of Actuaries and earned his B.S. in mathematics from the University of Nebraska.

TWST: Would you begin with a brief introduction to Lincoln Financial, including some highlights from the company's history and an overview of its product offerings?

Mr. Konen: Lincoln Financial Group (LNC) was founded in 1905, headquartered in the Philadelphia area, with operations in various parts of the country and assets under management of approximately $170 billion. We offer a variety of insurance and retirement solutions to help Americans meet their financial needs, including annuities, life insurance, group benefits, 401(k) and 403(b) plans, as well as comprehensive financial planning and advisory services.Lincoln's history is marked by strong organic growth, coupled with a series of sound strategic acquisitions, such as our merger with Jefferson Pilot in 2006.

TWST: In which product categories has Lincoln Financial seen the most growth over the past several quarters? What do you believe have been the drivers for that growth, and what indicators does the company have that those drivers will remain in place?

Mr. Konen: If we step back, at the enterprise level, we've posted positive and consistent net flows throughout and since the financial crisis. As one of our goals is to attract and retain assets, this consistent positive net flow is an important measure of our success, and a core strength of our franchise.Then, we can drop down into the various business units. In annuities, we look at the fact that only 8% of America's investable assets are in this product class, so there is real room for growth there. Also, a recent Cogent Research study showed that annuities are of interest to younger investors as guaranteed income grows in appeal. One of our current annuity growth strategies is based on the introduction of a series of protected funds, which afford upside potential and downside protection for our policyholders.

Further, we have an industry-leading hedge program, so we remain very comfortable in this business line.Group protection, a market which is undergoing a substantive change due to employee-paid benefits and health care reform, is the major growth area for the company. As we invest more in technology, in staffing and in distribution, we are targeting $500 million of sales by 2014. Increased deposits and net flows in our retirement plan services business are strong. In quarter one, our deposits of $1.5 billion were up 13% versus the prior year. So we continue to see our solutions having market appeal and see our investments in this business paying off.In terms of the life business, which has been challenged by persistently low interest rates, we are in a "protect and pivot" strategy, which is protecting the margins of key product lines and market positions while pivoting to higher return, less interest-rate-sensitive products. In that regard, sales of our indexed universal, variable universal and term life products were up collectively 11% in the first quarter.

TWST: In which customer verticals and geographic areas do you see the best opportunities for growth, and how is the company positioning itself to take advantage of those opportunities?

Mr. Konen: First, we pursue demographic rather than geographic opportunities, so let me speak to the demographics. In terms of our customer base, we cast a pretty wide net. Clearly, we have a strong foothold with existing retirees, especially in the affluent and emerging affluent areas, and are tapping the enormous opportunities afforded by the Baby Boomer retirement phenomena. Simply put, we are serving growing markets.Further, we see a mindset change that favors our suite of solutions. The boom-and-bust cycle of the last 10 years has created a consumer desire for financial solutions that provide a level of certainty and of security, which is in our wheelhouse across all of our product lines.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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