Lincoln Financial

Group(A)

Neeraj Panjwani
170103134
History of Lincoln Group

1997
1905 1998 1999
1955 Acquisition 1998
Lincoln 1995 Acquisition LFG is a
of Cigna Life
National Life Becomes the of Aetna Boscia Diversified
Acquisition Insurance
Insurance 9th Largest Domestic becomes Financial
of Delaware and
Company life insurer Individual CEO Services
Annuities
developed ($ 1 Bn.) Provider
($1.4 Bn.)
Overview

• Customers are the distributors of financial products and services 

B2B
 Banks, independent brokers, wirehouse dealers and
MGAs.

• LFG customers needs and wants:

 Eager for information about the products & services in order to sell
it the right target customer  educate themselves on these
products by going online.
 To begin offering packages of financial products and services to
their customers  more coordinated approach
3
Life Insurance Division
• Core Business
• Revenue – 23% of the group revenue (Year 1999)
• Earnings- 46% of the group earnings (Year 1999)

Term Universal Life

Insurance
Permanent Whole Life

Variable
Universal
Life Insurance Division: Distribution Channels

Lincoln Insurance
Products

Lincoln Financial
Wholesale operation
Advisors – MGA
100% YoY Growth Lincoln Life
2,000 advisors-39 Rate Distributors
offices

Wirehouses
Banks
Annuity Division
• Annuities – 63% of the group revenue (Year 1999)

• Variable Annuity Product- Most Important for Lincoln- Investment portion of this annuity managed thru
American Funds

• Net Income- 16% of the group income(Year 1999)

Annuity Division: Distribution Channels

Lincoln Annuity
Products

American Funds Cigna

Wholesaling Wholesaling
operations Group

Variable Choice Plus

Annuity Annuity
Product Product
Investment Management
• Majority of business due to acquisition of Delaware in 1995

• Offerings- Mutual Funds and Managed Accounts

• Available for both retail and institutional investors

Investment Business Financial Analysis

1995 1996 1997 1998 1999
Income from operations 17.4 8.6 6.1 22 24.6
Growth Rate - -50.57% -29.07% 260.66% 11.82%
Mutual Funds Distribution Strategy
Lincoln MFs+
Delaware
Investment Funds

65- Life Insurance

Wholesalers 20-Annuities, 20-IM
135 External -----------------------------
------
85 Internal 80- Wirehouses
9- Banks, 20-
Independent Agents,
15- MGA’s
GATEKEEPERS

Financial Advisors

Retirement Plan
Wirehouses Banks Regional Investors
Sponsors
LFD Concept
Establishment of integrated distribution of Lincoln Financial services

• Brining together the distribution channels and sales efforts of all SBU’s under one umbrella

• Non uniformity in compensation plan for Wholesalers

• Reduce multiple personnel from the same company calling for different product

• Lack of coordination between SBUs at Lincoln

• The wholesaling quality was not the same in the different business units  The new distribution structure is
a good move in order to better organize distribution.
Customer Intimacy
Matching customer needs with tailor made offerings (Enhanced customer value)

Information about the products and services offered:

Financial advisors need to persuade them to invest in funds  persuasion process.

• Bundle financial products and services as a package was an emerging trend among major Wirehouses

• New and diversified investment options necessitated the adoption of an improved way of serving the
customers

• Help customers to identify and sell the right product to the target market

• LFD would make their job easier by reducing confusion

Benefits-LFD
• Increase in number of touch points  Increase in customer loyalty

• Chance to become an integrated solutions provider

• Better coordination among various SBU’s  Better coordination among MGA’s Better selling performance
(avoid missing sales leads)  Increased customer satisfaction
Steps to implement strategy
• Use consultant report to gain ground within the company

• SBU Managers fear lose on control of sales due to creation of LFD Reassure team about coordination
between various SBU’s

• Fear of loss of link between Product Development and Sales  Explain the benefits accruing out of
combined efforts leading to better development of new products

• Increasing incentives for whole sellers on selling as well as referring products

• Start educating its whole sellers to be solution providers rather than product pushers