Case | HBS Case Collection | May 2010 (Revised January 2012)

Lincoln Financial Meets the Financial Crisis

by Robert C. Pozen and Peter Goodspeed Spring

Abstract

In March of 2009, Lincoln Financial Group's CEO Dennis Glass was facing a difficult decision as to how he would replenish his company's capital, which could quickly fall to dangerously low levels as a result of the financial crisis. Though the cost of raising capital in the private sector was much higher than a government bailout, the latter also came with strings attached, including restrictions on executive compensation, limitations on dividends, and potential damage to the company's brand among its stakeholders. Glass needed to weigh the pros and cons of private capital versus federal assistance or somehow combine the two. This case reviews the impact of the financial crisis on the life insurance and annuity industry by analyzing the options available to Glass at Lincoln Financial.

Keywords: Cost vs Benefits; Financial Crisis; Capital; Private Equity; Crisis Management; Business and Government Relations; Business and Stakeholder Relations; Insurance Industry;

Citation:

Pozen, Robert C., and Peter Goodspeed Spring. "Lincoln Financial Meets the Financial Crisis." Harvard Business School Case 310-137, May 2010. (Revised January 2012.)