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Lincoln National sees potential DOL rule delay as positive for annuities

Lincoln National Corp. executives think a delay of the Department of Labor's Conflict of Interest Rule could ease some of the pressure on the company's annuity business.

A delay and adjustments to the DOL rule could eliminate some marketplace uncertainty contributing to weaker annuity sales, President and CEO Dennis Glass said during a Feb. 2 earnings call. Shifting consumer preferences are also causing the annuity market to recalibrate as it trends away from commission-based products, he added. Glass said Lincoln National "refreshed" its fee-based annuity products in January and expects them to provide key long-term growth.

Glass also said the company's collaboration with BlackRock Inc., which created a variable annuity product that uses the asset manager's iShares exchange-traded funds, should see more notable sales results in the latter part of 2017 and into 2018. He noted that initial feedback from distribution partners and advisers around the new product has been positive.

"It's probably one of the most exciting product concepts that we've ever delivered into the marketplace," Glass said. "But just like any new product, it's going to take time to build sales."

Glass said it is too early to reach specific conclusions about how President Donald Trump's administration will impact Lincoln National's business. Some of the new policies could offer "incremental tailwinds," he said, though he did not specify which of Trump's proposals would benefit Lincoln National. Economic growth and rising interest rates would help alleviate margin compression, he noted.