Lincoln, other insurers rise after strong results

NEW YORK, Oct 29 (Reuters) - Shares of Lincoln National Corp, a life insurer that took a government bailout to boost capital, rose more than 10 percent on Thursday, a day after the company reported better-than-expected quarterly results, raising hopes that it is headed for recovery. "The key takeaway was the surprisingly strong sales and net asset flow trends, which suggest to us LNC's core franchise value remains intact despite the company having to take TARP assistance to rebuild its capital base," Citigroup analyst Colin Devine said in a research note. Lincoln shares rose $2.46, or 11 percent, to $24.71 in morning trade on the New York Stock Exchange. Late Wednesday, Lincoln reported higher third-quarter net income, and its operating earnings beat Wall Street expectations Lincoln was the second-biggest percentage gainer on the Dow Jones U.S.

life insurance index after Genworth Financial Inc, which rose 12 percent on optimism that it would report better-than-expected results later Thursday. Other insurers, including Aflac Inc and Assurant Inc, have already reported results that beat forecasts, and they also gained on Thursday. Aflac rose 4 percent to $42.21, and Assurant was up nearly 4 percent at $30.49. In Lincoln's case, one-time items were largely responsible for the higher profit, but strong business performance underpinned the results, analysts said. "Fundamentally, LNC's results continue to demonstrate resilience of the franchise, as net flows were generally positive, lapse rates improved further, and sales do not appear to be reflecting any negative reactions by distribution to TARP participation," Sterne Agee analyst John Nadel said in a research note. Philadelphia-based Lincoln turned to Washington for a cash injection earlier this year after heavy investment losses and a surge in costs for stock market-linked annuities eroded capital. Lincoln received $950 million from the U.S. Treasury to help shore up its finances, and raised additional funds through the capital markets. (Reporting by Lilla Zuill; editing by John Wallace) Keywords: LINCOLN/SHARES ([e-mail];[phone]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.