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Aflac Incorporated

AFL Financial Services Q1 2025

Document 12025

EX-99.1 2 aflex991-q12025.htm EX-99.1 Document

    



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News Release

Aflac Incorporated Announces First Quarter Results,
Reports First Quarter Net Earnings of $29 Million,
Declares Second Quarter Dividend

COLUMBUS, Ga. - April 30, 2025 - Aflac Incorporated (NYSE: AFL) today reported its first quarter results.

Total revenues were $3.4 billion in the first quarter of 2025, compared with $5.4 billion in the first quarter of 2024, primarily due to net investment losses of $963 million this quarter compared to net investment gains of $951 million in the first quarter of 2024. Net earnings were $29 million, or $0.05 per diluted share, compared with $1.9 billion, or $3.25 per diluted share a year ago.

Net earnings in the first quarter of 2025 included net investment losses of $963 million, or $1.76 per diluted share, compared with net investment gains of $951 million, or $1.65 per diluted share a year ago. These net investment losses were driven by net losses of $888 million on certain derivatives and foreign currency activities; a $61 million loss from a decrease in the fair value of equity securities; and $55 million of reserves for current expected credit losses (CECL); offset by net gains from sales and redemptions of $41 million; and no impairments.

Adjusted earnings* in the first quarter were $906 million, compared with $961 million in the first quarter of 2024, reflecting a decrease of 5.7%. Adjusted earnings per diluted share* remained flat in the quarter at $1.66. Variable investment income ran $27 million below the company's long-term return expectations. Net investment income included $16 million, or $0.02 per share, from a make-whole call of a security in the Japan segment. The weaker yen/dollar exchange rate negatively impacted adjusted earnings per share by $0.01.

The average yen/dollar exchange rate in the first quarter of 2025 was 152.40, or 2.4% weaker than the average rate of 148.67 in the first quarter of 2024.

Shareholders’ equity was $26.3 billion, or $48.55 per share, at March 31, 2025, compared with $23.5 billion, or $41.27 per share, at March 31, 2024. Shareholders’ equity at the end of the first quarter included a cumulative increase of $3.9 billionfor the effect of the change in discount rate assumptions on insurance reserves, compared with a corresponding cumulative decrease of $1.5 billion at March 31, 2024 and a net unrealized loss on investment securities and derivatives of $1.3 billion, compared with a net unrealized gain of $1.1 billion at March 31, 2024. Shareholders’ equity at the end of the first quarter also included an unrealized foreign currency translation loss of $4.5 billion, compared with an unrealized foreign currency translation loss of $4.7 billion at March 31, 2024. The annualized return on average shareholders’ equity in the first quarter was 0.4%.

Shareholders’ equity excluding AOCI (or adjusted book value*) was $28.2 billion, or $51.98 per share at March 31, 2025, compared with $28.6 billion, or $50.22 per share, at March 31, 2024. Adjusted book value excluding foreign currency remeasurement* was $23.1 billion, or $42.61 per share, at March 31, 2025, compared with $23.8 billion, or $41.68 per share, at March 31, 2024. The annualized adjusted return on equity excluding foreign currency remeasurement* in the first quarter was 15.6%.



    



AFLAC JAPAN

In yen terms, Aflac Japan's net earned premiums were ¥256.5 billion for the quarter, or 5.0% lower than a year ago, mainly due to internal cancer reinsurance transactions, as well as limited-pay policies reaching paid-up status. Adjusted net investment income decreased 7.6% to ¥89.2 billion primarily due to lower floating rate income. Total adjusted revenues in yen declined 5.7% to ¥346.5 billion. Pretax adjusted earnings in yen for the quarter declined 8.7% on a reported basis to ¥110.0 billion, primarily due to a decline in revenue, partially offset by lower benefits. Pretax adjusted earnings decreased 9.8% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment decreased to 31.8%, compared with 32.8% a year ago.

In dollar terms, net earned premiums decreased 7.4% to $1.7 billion in the first quarter. Adjusted net investment income decreased 9.6% to $586 million. Total adjusted revenues declined by 8.1% to $2.3 billion. Pretax adjusted earnings declined 10.9% to $722 million.

For the quarter, total new annualized premium sales (sales) increased 12.6% to ¥14.1 billion, or $93 million, primarily reflecting strong sales of Tsumitasu, a first sector product, as well as the initial two weeks of sales for Miraito, the new cancer insurance product.

AFLAC U.S.

Aflac U.S. net earned premiums increased 1.8% to $1.5 billion in the first quarter compared to the prior year, reflecting improved sales and persistency. Adjusted net investment income decreased 1.9% to $202 million, primarily due to lower floating rate income. Total adjusted revenues were up 1.3% to $1.7 billion. Pretax adjusted earnings were $358 million, 0.6% higher than a year ago, reflecting higher premiums and lower expenses which were partially offset by higher benefits. As a result, the pretax adjusted profit margin for the U.S. segment was 20.8%, compared with 21.0% a year ago.

Aflac U.S. sales increased 3.5% in the quarter to $309 million, driven by sales of group products.

CORPORATE AND OTHER

For the quarter, total adjusted revenues increased 32.0% to $326 million compared to the prior year. The increase was primarily driven by higher adjusted net investment income due to a lower volume of tax credit investments and an increase due to reinsurance activity, which also increased total net earned premiums. Total benefits and adjusted expenses increased $33 million compared to the prior year primarily due to reinsurance activity and higher interest expense. Pretax adjusted earnings were a gain of $43 million, compared with a loss of $3 million a year ago.

DIVIDEND AND CAPITAL RETURNED TO SHAREHOLDERS

The board of directors declared the second quarter dividend of $0.58 per share, payable on June 2, 2025 to shareholders of record at the close of business on May 21, 2025.

In the first quarter, Aflac Incorporated deployed $900 million in capital to repurchase 8.5 million of its common shares. At the end of March 2025, the company had 38.8 million remaining shares authorized for repurchase.

OUTLOOK

Commenting on the company’s results, Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos stated: "I am pleased that Aflac delivered very solid adjusted earnings for the quarter.

"Looking at our operations in Japan, I am pleased with Aflac Japan’s 93.8% premium persistency and 12.6% year-over-year sales increase. We have continued to focus on third sector products, including Miraito, our new cancer insurance product, while continuing to introduce these policies to new and younger customers through Tsumitasu, our first sector product.



    



"In the U.S., I continue to be pleased with our premium persistency results of 79.3%, in addition to our 1.8% increase in net earned premiums and 3.5% increase in sales. We are encouraged by the momentum we are seeing within all areas of our group business, especially our group life and disability as well as network dental. We continue to focus on more profitable growth through our stronger underwriting discipline and improving the productivity of agents and brokers. We are seeing improvement in net earned premiums and continue our prudent approach to expense management and maintaining a strong pretax margin.

"We continue to generate strong capital and cash flows while maintaining our commitment to prudent liquidity and capital management. We have been pleased with our investments, which have continued to produce strong net investment income. We treasure our 2024 milestone of 42 consecutive years of dividend increases and remain committed to extending this record, supported by our financial strength. We repurchased $900 million in shares for the quarter. We intend to continue our balanced approach of investing in growth and driving long-term operating efficiencies."

*See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures.

ABOUT AFLAC INCORPORATED

Aflac Incorporated (NYSE: AFL), a Fortune 500 company, has helped provide financial protection and peace of mind for nearly seven decades to millions of policyholders and customers through its subsidiaries in the U.S. and Japan. In the U.S., Aflac is the No. 1 provider of supplemental health insurance products.1 In Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance in terms of policies in force. The company takes pride in being there for its policyholders when they need us most, as well as being included in the World’s Most Ethical Companies by Ethisphere for 19 consecutive years (2025) and Fortune’s World’s Most Admired Companies for 24 years (2025). In addition, the company became a signatory of the Principles for Responsible Investment (PRI) in 2021 and has been included in the Dow Jones Sustainability North America Index (2024) for 11 years. To find out how to get help with expenses health insurance doesn't cover, get to know us at aflac.com or aflac.com/español. Investors may learn more about Aflac Incorporated and its commitment to corporate social responsibility and sustainability at investors.aflac.com under “Sustainability.”

1 LIMRA 2023 U.S. Supplemental Health Insurance Total Market Report

A copy of Aflac’s financial supplement for the quarter can be found on the “Investors” page at aflac.com.

Aflac Incorporated will webcast its quarterly conference call via the “Investors” page of aflac.com at 8:00 a.m. (ET) on May 1, 2025.

Note: Tables within this document may not foot due to rounding.


    



AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31,20252024% Change
Total revenues$3,398 $5,436 (37.5)%
Benefits and claims, net1,945 2,010 (3.2)
Total acquisition and operating expenses1,308 1,256 4.1 
Earnings before income taxes145 2,170 (93.3)
Income taxes116 291 
Net earnings$29 $1,879 (98.5)%
Net earnings per share – basic$0.05 $3.27 (98.5)%
Net earnings per share – diluted0.05 3.25 (98.5)
Shares used to compute earnings per share (000):
Basic544,707 574,886 (5.2)%
Diluted546,878 577,482 (5.3)
Dividends paid per share$0.58 $0.50 16.0 %



    



AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS)
MARCH 31,20252024% Change
Assets:
Total investments and cash$107,446 $111,716 (3.8)%
Deferred policy acquisition costs9,083 8,819 3.0 
Other assets3,729 4,207 (11.4)
Total assets$120,258 $124,742 (3.6)%
Liabilities and shareholders’ equity:
Policy liabilities$78,828 $85,364 (7.7)%
Notes payable and lease obligations7,751 7,912 (2.0)
Other liabilities7,341 7,929 (7.4)
Shareholders’ equity26,338 23,537 11.9 
Total liabilities and shareholders’ equity$120,258 $124,742 (3.6)%
Shares outstanding at end of period (000)542,493 570,278 (4.9)%




    



NON-U.S. GAAP FINANCIAL MEASURES

This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations.

Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).

The company defines the non-U.S. GAAP financial measures included in this earnings release as follows:

•Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that are outside of management’s control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The most comparable U.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively.

•Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in Japan and foreign exchange rates are outside management’s control; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) into U.S. dollars. The most comparable U.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively.

•Adjusted return on equity is annualized adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using annualized net earnings and average total shareholders’ equity.

•Adjusted return on equity excluding foreign currency remeasurement is annualized adjusted earnings divided by average shareholders’ equity, excluding both accumulated other comprehensive income and the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The Company considers adjusted return on equity excluding foreign currency remeasurement important because it excludes both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity excluding foreign currency remeasurement is return on average equity as determined using annualized net earnings and average total shareholders’ equity.

•Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign exchange risks in the Company's Japan segment or in Corporate and other. These amortized hedge costs/income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a


    



straight-line basis over the contractual term of the derivative. The Company believes that amortized hedge costs/income measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income. There is no comparable U.S. GAAP financial measure for amortized hedge costs/income.

•Adjusted book value is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude accumulated other comprehensive income, which fluctuates due to market movements that are outside management’s control. The most comparable U.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively.

•Adjusted book value excluding foreign currency remeasurement is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet and excluding the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. Adjusted book value excluding foreign currency remeasurement per common share is adjusted book value excluding foreign currency remeasurement at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share important as they exclude both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measures for adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share are total book value and total book value per common share, respectively.

•Adjusted net investment income is net investment income adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, and ii) net interest income/expense from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and losses to net investment income. The Company considers adjusted net investment income important because it provides a more comprehensive understanding of the costs and income associated with the Company’s investments and related hedging strategies. The most comparable U.S. GAAP financial measure for adjusted net investment income is net investment income.

•Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest income/expense from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses. The Company considers adjusted net investment gains and losses important as it represents the remainder amount that is considered outside management’s control, while excluding the components that are within management’s control and are accordingly reclassified to net investment income and interest expense. The most comparable U.S. GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.




    



RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31,20252024% Change
Net earnings$29 $1,879 (98.5)%
Items impacting net earnings:
Adjusted net investment (gains) losses924 (1,009)
Other and non-recurring (income) loss
53 2 
Income tax (benefit) expense on items excluded
from adjusted earnings 		(100)89 
Adjusted earnings 906 961 (5.7)%
Current period foreign currency impact 1
8 N/A
Adjusted earnings excluding current period foreign
currency impact 2
$914 $961 (4.9)%
Net earnings per diluted share$0.05 $3.25 (98.5)%
Items impacting net earnings:
Adjusted net investment (gains) losses1.69 (1.75)
Other and non-recurring (income) loss
0.10 — 
Income tax (benefit) expense on items excluded
from adjusted earnings 		(0.18)0.15 
Adjusted earnings per diluted share1.66 1.66 — %
Current period foreign currency impact 1
0.01 N/A
Adjusted earnings per diluted share excluding
current period foreign currency impact 2
$1.67 $1.66 0.6 %

1    Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.
2    Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes.



    



RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED MARCH 31,20252024% Change
Net investment (gains) losses$963 $(951)(201.3)%
Items impacting net investment (gains) losses:
Amortized hedge costs(7)(6)
Amortized hedge income30 28 
Net interest income (expense) from derivatives associated
     with certain investment strategies
(65)(88)
Impact of interest from derivatives associated with
     notes payable1
4 8 
Adjusted net investment (gains) losses$924 $(1,009)(191.6)%
1    Amounts are included with interest expenses that are a component of adjusted expenses.



RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME
(UNAUDITED – IN MILLIONS)
THREE MONTHS ENDED MARCH 31,20252024% Change
Net investment income$955 $1,000 (4.5)%
Items impacting net investment income:
Amortized hedge costs(7)(6)
Amortized hedge income30 28 
Net interest income (expense) from derivatives associated
     with certain investment strategies
(65)(88)
Adjusted net investment income$913 $934 (2.2)%



    



RECONCILIATION OF U.S. GAAP BOOK VALUE TO ADJUSTED BOOK VALUE
(EXCLUDING FOREIGN CURRENCY REMEASUREMENT)
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS)
MARCH 31,20252024% Change
U.S. GAAP book value $26,338 $23,537 
Less:
Unrealized foreign currency translation gains (losses)
(4,549)(4,666)
Unrealized gains (losses) on securities and derivatives
(1,251)1,066 
Effect of changes in discount rate assumptions3,899 (1,495)
Pension liability adjustment
42 (7)
Total AOCI
(1,859)(5,102)
Adjusted book value$28,197 $28,639 
Less:
Foreign currency remeasurement gains (losses)5,083 4,868 
Adjusted book value excluding foreign currency remeasurement$23,114 $23,771 
Number of outstanding shares at end of period (000)542,493 570,278 
U.S. GAAP book value per common share $48.55 $41.27 17.6 %
Less:
Unrealized foreign currency translation gains (losses) per common share
(8.39)(8.18)
Unrealized gains (losses) on securities and derivatives per common share
(2.31)1.87 
Effect of changes in discount rate assumptions
     per common share		7.19 (2.62)
Pension liability adjustment per common share
0.08 (0.01)
Total AOCI per common share
(3.43)(8.95)
Adjusted book value per common share$51.98 $50.22 3.5 %
Less:
Foreign currency remeasurement gains (losses) per common share9.37 8.54 
Adjusted book value excluding foreign currency remeasurement per common share$42.61 $41.68 2.2 %




    



RECONCILIATION OF U.S. GAAP RETURN ON EQUITY (ROE) TO ADJUSTED ROE
(EXCLUDING IMPACT OF FOREIGN CURRENCY)
THREE MONTHS ENDED MARCH 31,20252024
U.S. GAAP ROE - Net earnings1
0.4 %33.0 %
Impact of excluding unrealized foreign currency translation gains (losses)
— (5.1)
Impact of excluding unrealized gains (losses) on securities and derivatives
— 1.3 
Impact of excluding effect of changes in discount rate assumptions— (2.4)
Impact of excluding pension liability adjustment
— — 
Impact of excluding AOCI
— (6.2)
U.S. GAAP ROE - less AOCI0.4 26.8 
Differences between adjusted earnings and net earnings2
12.2 (13.1)
Adjusted ROE - reported12.7 13.7 
Less: Impact of excluding gains (losses) associated with foreign currency remeasurement3
2.9 2.5 
Adjusted ROE, excluding foreign currency remeasurement15.6 16.2 

1    U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.
2    See separate reconciliation of net income to adjusted earnings.
3    Impact of gains/losses associated with foreign currency remeasurement is calculated by restating excluding the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The impact is the difference of adjusted return on equity - reported compared with adjusted return on equity, excluding from shareholders' equity, gains/losses associated with foreign currency remeasurement.



    



EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1
(SELECTED PERCENTAGE CHANGES, UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2025Including
Currency
Changes
Excluding
Currency
Changes2
Net earned premiums3
(2.2)%(0.7)%
Adjusted net investment income4
(2.2)(1.6)
Total benefits and expenses(1.8)(0.5)
Adjusted earnings(5.7)(4.9)
Adjusted earnings per diluted share0.0 0.6 

1Refer to previously defined adjusted earnings and adjusted earnings per diluted share.
2Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes.
3Net of reinsurance
4Refer to previously defined adjusted net investment income.



    



FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as “expect,” “anticipate,” “believe,” “goal,” “objective,” “may,” “should,” “estimate,” “intends,” “projects,” “will,” “assumes,” “potential,” “target,” "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.

The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:

•difficult conditions in global capital markets and the economy, including inflation
•defaults and credit downgrades of investments
•global fluctuations in interest rates and exposure to significant interest rate risk
•concentration of business in Japan
•limited availability of acceptable yen-denominated investments
•foreign currency fluctuations in the yen/dollar exchange rate
•differing interpretations applied to investment valuations
•significant valuation judgments in determination of expected credit losses recorded on the Company's investments
•decreases in the Company's financial strength or debt ratings
•decline in creditworthiness of other financial institutions
•the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
•deviations in actual experience from pricing and reserving assumptions
•ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives
•interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems
•subsidiaries' ability to pay dividends to the Parent Company
•inherent limitations to risk management policies and procedures
•operational risks of third-party vendors
•tax rates applicable to the Company may change
•failure to comply with restrictions on policyholder privacy and information security
•extensive regulation and changes in law or regulation by governmental authorities
•competitive environment and ability to anticipate and respond to market trends
•catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, major public health issues, terrorism or other acts of violence, and damage incidental to such events
•ability to protect the Aflac brand and the Company's reputation
•ability to effectively manage key executive succession
•changes in accounting standards
•level and outcome of litigation or regulatory inquiries
•allegations or determinations of worker misclassification in the United States



Analyst and investor contact - David A. Young, 706.596.3264; 800.235.2667 or [email protected]

Media contact - Ines Gutzmer, 762.207.7601 or [email protected]


Document 1

EX-99.2 3 afl033125-fabdocument.htm EX-99.2 Document

FINAL                                                                     4/30/2025
aflaclogoa01a01a01a33.jpg

Financial Supplement
First Quarter 2025

This document is a statistical supplement to Aflac’s quarterly earnings release. Throughout the presentation, amounts presented may not foot due to rounding. As you review the supplement, please note the non-U.S. GAAP financial measures and definitions found at the back of this document.
The Company adopted the Financial Accounting Standards Board’s Accounting Standard Update 2018-12 Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts, as clarified and amended by (i) ASU 2019-09 Financial Services - Insurance: Effective Date, and (ii) ASU 2020-11 Financial Services - Insurance: Effective Date and Early Application (collectively, “LDTI”) as of January 1, 2023. The amended guidance is applied as of the beginning of the earliest period presented in the Company’s quarterly and annual financial statements, which results in a January 1, 2021 Transition Date. In conjunction with the adoption of LDTI, the Company changed its practice of recording the change in the deferred profit liability (DPL) on products with limited-payment features from the benefits and claims, net line item to the net earned premiums line item in the consolidated statement of earnings. This change in presentation has no impact on net earnings. All quarterly and annual amounts for 2021 and 2022 presented herein reflect these changes for LDTI and DPL.
For more information, contact:
David Young
Phone. 706.596.3264
investors.aflac.com


Aflac Incorporated and Subsidiaries
Share Data
(In Thousands)
1Shares IssuedShares PurchasedQTD Weighted Avg. SharesYTD Weighted Avg. Shares
PeriodBeginning Shares OutstandingStk. Bon. & DRPStk. Opt. & Misc.Treas. Shares
Misc. Purch. (1)
Ending Shares OutstandingAvg. SharesDilutive SharesAvg. DilutedAvg. SharesDilutive SharesAvg. Diluted
20231615,256 239 1,152 10,348 347 605,952 611,205 2,745 613,950 611,205 2,745 613,950 
2605,952 259 225 10,461 6 595,969 600,742 2,187 602,929 605,945 2,466 608,411 
3595,969 210 115 9,390 7 586,897 591,246 2,350 593,596 600,991 2,427 603,419 
4586,897 191 94 8,698 5 578,479 581,876 3,005 584,881 596,173 2,572 598,745 
20241578,479 212 1,320 9,276 457 570,278 574,886 2,596 577,482 574,886 2,596 577,482 
2570,278 217 186 9,288 24 561,369 564,573 2,265 566,838 569,730 2,430 572,160 
3561,369 165 75 4,882 10 556,717 557,899 2,515 560,414 565,757 2,459 568,216 
4556,717 156 77 6,982 4 549,964 552,767 2,716 555,483 562,492 2,523 565,015 
20251549,964 173 1,251 8,497 398 542,493 544,707 2,171 546,878 544,707 2,171 546,878 

(1) Includes previously owned shares used to purchase options (swapped shares) and/or shares purchased for deferred compensation program


2

Aflac Incorporated and Subsidiaries
Summary of Adjusted Results by Business Segment
(In Millions, except per-share data)
Years Ended December 31,3 Months Ended March 31,
2020202120222023202420242025% Change
Aflac Japan$3,263 $3,755 $3,281 $3,234 $3,494 $810 $722 (10.9)%
Aflac U.S.1,268 1,356 1,359 1,501 1,419 356 358 0.6 
1
Corporate and other (1)
(115)(293)(218)(425)32 (3)43 
Pretax adjusted earnings4,416 4,819 4,422 4,310 4,945 1,163 1,123 (3.4)
Income taxes (1)
864 893 808 577 873 202 217 7.4 
2
Adjusted earnings (2)
3,552 3,925 3,614 3,733 4,072 961 906 (5.7)
Reconciling items:
Adjusted net investment gains (losses)(229)462 447 914 1,495 1,009 (924)
Other and non-recurring income (loss)
(28)(73)1 39 (23)(2)(53)
3
Income tax benefit (expense) on items excluded from adjusted earnings (3)
72 (83)357 (26)(101)(89)100 
4
Tax valuation allowance release (4)
1,411 — — — — — — 
Net earnings$4,778 $4,231 $4,418 $4,659 $5,443 $1,879 $29 (98.5)%
Effective Tax rate(14.9)%18.7 %9.3 %11.5 %15.2 %13.4 %80.3 %
Earnings per share of common stock:
Net earnings (basic)$6.69 $6.28 $6.96 $7.81 $9.68 $3.27 $0.05 (98.5)%
Net earnings (diluted)6.67 6.25 6.93 7.78 9.63 3.25 0.05 (98.5)
Adjusted earnings (basic) (2)
$4.98 $5.83 $5.69 $6.26 $7.24 $1.67 $1.66 (0.6)%
Adjusted earnings (diluted) (2)
4.96 5.80 5.67 6.23 7.21 1.66 1.66 — 
(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $8 and $32 for the three-month periods ended March 31, 2025, and 2024, respectively, is included as a reduction to net investment income. Tax credits on these investments of $7 and $33 for the three-month periods ended March 31, 2025, and 2024, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings.
(2) See non-U.S. GAAP financial measures for definition of adjusted earnings.
(3) Primarily reflects release of $452 in deferred taxes in 2022.
(4) Tax benefit recognized in 2020 represents the release of valuation allowances on deferred tax benefits related to foreign tax credits.
3

Aflac Incorporated and Subsidiaries
Consolidated Statements of Earnings - U.S. GAAP
(In Millions, except per-share data)
Years Ended December 31,3 Months Ended March 31,
2020202120222023202420242025% Change
Revenues:
Net earned premiums:
Gross premiums$18,955 $17,305 $15,025 $14,318 $13,562 $3,482 $3,433 
Assumed (ceded)(333)(210)(124)(195)(122)(26)(52)
1
Total net earned premiums (1)
18,622 17,095 14,901 14,123 13,440 3,456 3,381 (2.2)%
Net investment income3,638 3,818 3,656 3,811 4,116 1,000 955 (4.5)
Net investment gains (losses)
(270)468 363 590 1,271 951 (963)
Other income
157 173 220 177 100 29 25 
Total revenues22,147 21,554 19,140 18,701 18,927 5,436 3,398 (37.5)
Benefits and Claims:
Benefits and claims, net:
Incurred claims -direct9,364 8,949 8,271 8,005 8,281 2,277 2,388 
Incurred claims -assumed (ceded)(296)(147)(108)(177)(95)(16)(44)
2
Increase in FPB -direct (2)
2,707 1,819 888 594 (184)(195)(357)
Increase in FPB -assumed (ceded) (2)
21 3 51 172 5 — (1)
Total net benefits and claims, excluding reserve remeasurementN/A10,623 9,102 8,594 8,008 2,066 1,986 
Reserve remeasurement (gain) lossN/A(147)(215)(383)(558)(56)(41)
Total net benefits and claims11,796 10,476 8,887 8,211 7,450 2,010 1,945 (3.2)
Acquisition and operating expenses:
3
Amortization of DAC (3)
1,214 835 792 816 851 215 216 
Insurance commissions1,316 1,256 1,117 1,052 998 255 240 
Insurance expenses3,420 3,541 3,249 3,165 3,014 739 802 
Interest expense242 238 226 195 197 47 50 
Total acquisition and operating expenses6,192 5,870 5,384 5,228 5,060 1,256 1,308 4.1 
Total benefits and expenses17,988 16,346 14,271 13,439 12,510 3,266 3,253 (0.4)
Pretax earnings4,159 5,208 4,869 5,262 6,417 2,170 145 
4
Income tax expense (benefit) (4)
(619)977 451 603 974 291 116 
Net earnings$4,778 $4,231 $4,418 $4,659 $5,443 $1,879 $29 (98.5)%
(1) Includes a gain (loss) of an immaterial amount and $(3) for the three-month periods ended March 31, 2025 and 2024, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.
(2) Future policy benefits
(3) Deferred acquisition costs
(4) Primarily reflects release of $452 in deferred taxes in 2022.
4

Aflac Incorporated and Subsidiaries
Analysis of Net Earnings and Net Earnings Per Diluted Share
(In Millions, except for per-share data)
PeriodNet Earnings
Net Investment Gains (Losses) (1)
Other and Non- Recurring Items (1)(3)
Foreign Currency Impact (2)
Net Earnings Per Share
Net Investment Gains (Losses) (1)
Other and Non-Recurring Items Per Share (1)(3)
Foreign Currency Impact Per Share (2)
12020$4,778 $(181)$1,407 $31 $6.67 $(0.25)$1.96 $0.04 
220214,231 365 (59)(42)6.25 0.54 (0.09)(0.06)
20224,418 803 1 (262)6.93 1.26 — (0.41)
320234,659 896 31 (113)7.78 1.50 0.05 (0.19)
20245,443 1,389 (18)(103)9.63 2.46 (0.03)(0.18)
202311,188 235 — (41)1.94 0.38 — (0.07)
21,634 653 28 (25)2.71 1.08 0.05 (0.04)
31,569 472 2 (33)2.64 0.80 — (0.06)
4268 (464)— (14)0.46 (0.79)— (0.02)
202411,879 920 (2)(44)3.25 1.59 — (0.08)
21,755 720 — (37)3.10 1.27 — (0.07)
3(93)(1,304)— (16)(0.17)(2.33)— (0.03)
41,902 1,054 (17)(6)3.42 1.90 (0.03)(0.01)
2025129 (835)(42)(8)0.05 (1.53)(0.08)(0.01)
(1) Items are presented net of tax.
(2) See non-U.S. GAAP financial measures for definition of adjusted earnings excluding current period foreign currency impact
(3) Tax benefit recognized in the third quarter of 2020 represents the release of valuation allowances on deferred tax benefits related to foreign tax credits.
5

Aflac Incorporated and Subsidiaries
Consolidated Balance Sheets
(In Millions, except per-share data)
December 31,March 31,
2020202120222023202420242025
Assets:
Investments and cash:
Securities available for sale:
Fixed maturity securities available for sale, at fair value$101,286 $94,206 $71,936 $69,578 $61,841 $66,452 $63,547 
Fixed maturity securities available for sale - consolidated variable interest entities, at fair value4,596 4,490 3,805 3,712 3,428 3,678 3,597 
Fixed maturity securities held to maturity, at amortized cost, net of allowance for credit losses24,464 22,000 19,056 17,819 15,966 16,689 16,888 
Equity securities, at fair value1,283 1,603 1,091 1,088 796 762 764 
Commercial mortgage and other loans, net of allowance for credit losses10,554 11,786 13,496 12,527 10,869 12,360 10,656 
Other investments2,429 3,842 4,070 4,530 5,958 6,677 6,763 
Cash and cash equivalents5,141 5,051 3,943 4,306 6,229 5,098 5,231 
Total investments and cash149,753 142,978 117,397 113,560 105,087 111,716 107,446 
1
Receivables, net of allowance for credit losses (1)
778 672 647 848 779 1,038 894 
Accrued investment income780 737 745 731 710 693 682 
Deferred policy acquisition costs10,441 9,848 9,239 9,132 8,758 8,819 9,083 
Property and equipment, net601 538 530 445 387 418 391 
2
Other assets, net of allowance for credit losses (1)(2)
2,733 3,377 3,180 2,008 1,845 2,058 1,762 
Total assets$165,086 $158,150 $131,738 $126,724 $117,566 $124,742 $120,258 
Liabilities and Shareholders' Equity:
Liabilities:
Total policy liabilities$114,391 $126,331 $96,910 $91,599 $77,508 $85,364 $78,828 
Notes payable7,899 7,956 7,442 7,364 7,498 7,912 7,751 
Income taxes, primarily deferred4,661 30 698 154 573 777 815 
Other liabilities4,576 6,802 6,548 5,622 5,889 7,152 6,526 
Total liabilities131,527 141,119 111,598 104,739 91,468 101,205 93,920 
Shareholders' equity:
Common stock135 135 135 136 136 136 136 
Additional paid-in capital2,410 2,529 2,641 2,771 2,894 2,806 2,919 
Retained earnings37,984 40,963 44,367 47,993 52,277 49,872 52,308 
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains (losses)(1,109)(1,985)(3,564)(4,069)(4,998)(4,666)(4,549)
Unrealized gains (losses) on fixed maturity securities10,361 9,602 (702)1,139 24 1,092 (1,233)
Unrealized gains (losses) on derivatives(34)(30)(27)(22)(20)(26)(18)
Effect of change in discount rate assumption(s)N/A(15,832)(2,100)(2,560)2,006 (1,495)3,899 
Pension liability adjustment(284)(166)(36)(8)10 (7)42 
Treasury stock(15,904)(18,185)(20,574)(23,395)(26,231)(24,175)(27,166)
Total shareholders' equity33,559 17,031 20,140 21,985 26,098 23,537 26,338 
Total liabilities & shareholders' equity$165,086 $158,150 $131,738 $126,724 $117,566 $124,742 $120,258 
(1) Certain reclassifications have been made to prior-year amounts to conform to current-year reporting classifications. These reclassifications had no impact on net earnings or total shareholders' equity.
(2) Includes goodwill of $260 million in 2025, $263 million in 2024, $265 million in 2023, $265 million in 2022, $268 million in 2021 and $269 million in 2020
6

Aflac Incorporated and Subsidiaries
Quarterly Financial Results
(In Millions, except per-share data)
1Net EPS
Adj. EPS (1)
PeriodNet Earned PremiumsNet Investment IncomeTotal RevenuesBenefits & Claims, NetTotal Acquisitions & Adj. Exp.Total Pretax EarningsNet Earnings
Adjusted Earnings (1)
BasicDil.BasicDil.
2020$18,622 $3,638 $22,147 $11,796 $6,192 $4,159 $4,778 $3,552 $6.69 $6.67 $4.98 $4.96 
202117,095 3,818 21,554 10,476 5,870 5,208 4,231 3,925 6.28 6.25 5.83 5.80 
202214,901 3,656 19,140 8,887 5,384 4,869 4,418 3,614 6.96 6.93 5.69 5.67 
202314,123 3,811 18,701 8,211 5,228 5,262 4,659 3,733 7.81 7.78 6.26 6.23 
202413,440 4,116 18,927 7,450 5,060 6,417 5,443 4,072 9.68 9.63 7.24 7.21 
202313,688 943 4,800 2,150 1,308 1,342 1,188 953 1.94 1.94 1.56 1.55 
23,573 999 5,172 2,098 1,249 1,825 1,634 954 2.72 2.71 1.59 1.58 
33,476 1,004 4,950 1,860 1,285 1,805 1,569 1,095 2.65 2.64 1.85 1.84 
43,385 865 3,777 2,103 1,385 289 268 732 0.46 0.46 1.26 1.25 
202413,456 1,000 5,436 2,010 1,256 2,170 1,879 961 3.27 3.25 1.67 1.66 
23,325 1,095 5,138 1,921 1,198 2,019 1,755 1,035 3.11 3.10 1.83 1.83 
33,328 1,006 2,949 1,595 1,262 92 (93)1,211 (0.17)(0.17)2.17 2.16 
43,331 1,016 5,403 1,923 1,345 2,135 1,902 865 3.44 3.42 1.56 1.56 
202513,381 955 3,398 1,945 1,308 145 29 906 0.05 0.05 1.66 1.66 

(1) See non-U.S. GAAP financial measures for definition of adjusted earnings.
7

Aflac Incorporated and Subsidiaries
Quarterly Book Value Per Share
(In Millions, except per-share data)
1
PeriodEquity BV Per ShareAOCI BV Per Share
Adjusted BV Per Share (1)
Adjusted BV Per Share
% Change
Adjusted BV Per Share Excluding Foreign Currency Remeasurement
G/(L) (1)
Adjusted BV Per Share Excluding Foreign Currency Remeasurement
G/(L) % Change
2020$48.46 $12.90 $35.56 15.7 %$35.56 15.7 %
202126.12 (12.90)39.01 9.7 37.71 6.0 
202232.73 (10.45)43.18 10.7 38.94 3.3 
202338.00 (9.54)47.55 10.1 41.15 5.7 
202447.45 (5.41)52.87 11.2 42.46 3.2 
2023132.65 (12.01)44.66 10.8 40.05 4.8 
234.30 (12.31)46.61 11.5 40.15 5.5 
338.63 (9.81)48.44 10.1 41.10 7.7 
438.00 (9.54)47.55 10.1 41.15 5.7 
2024141.27 (8.95)50.22 12.4 41.68 4.1 
246.40 (5.86)52.26 12.1 41.98 4.6 
344.60 (6.60)51.21 5.7 43.61 6.1 
447.45 (5.41)52.87 11.2 42.46 3.2 
2025148.55 (3.43)51.98 3.5 42.61 2.2 

(1) See non-U.S. GAAP financial measures for definition of adjusted book value and adjusted book value excluding foreign currency remeasurement
8

Aflac Incorporated and Subsidiaries
Return on Equity
Year ended December 31,3 Months Ended March 31,
12020
2021 (4)
2022
2023
202420242025
2
U.S. GAAP ROE - Net earnings (1)
15.3 %26.7 %23.8 %22.1 %22.6 %33.0 %0.4 %
Impact of excluding unrealized foreign currency translation gains (losses)(0.9)(1.7)(2.5)(3.1)(3.6)(5.1)— 
Impact of excluding unrealized gains (losses) on securities and derivatives6.2 10.7 4.1 0.2 0.4 1.3 — 
Impact of excluding effect on change in discount rate assumptionsN/A(18.5)(8.2)(1.9)(0.2)(2.4)— 
Impact of excluding pension liability adjustment(0.2)(0.2)(0.1)— — — — 
Impact of excluding AOCI5.1 (9.7)(6.8)(4.9)(3.4)(6.2)— 
U.S. GAAP ROE - less AOCI20.3 17.0 17.0 17.2 19.2 26.8 0.4 
3
Differences between adjusted earnings and net earnings (2)
(5.2)(1.2)(3.1)(3.4)(4.8)(13.1)12.2 
4
Adjusted ROE - reported (3)
15.1 15.8 13.9 13.8 14.4 13.7 12.7 
5
Less: Impact of excluding gains (losses) associated with foreign currency remeasurement (5)
N/A0.1 1.0 1.8 2.9 2.5 2.9 
Adjusted ROE, excluding foreign currency remeasurement (5)
N/A15.9 14.9 15.6 17.3 16.2 15.6 
(1) U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders' equity.
(2) See separate reconciliation of net income to adjusted earnings.
(3) See non-U.S. GAAP financial measures for definition of adjusted return on equity
(4) Return on equity calculations for 2021 use beginning retained earnings and accumulated other comprehensive income adjusted for the adoption of LDTI.
(5) Impact of gains/losses associated with foreign currency remeasurement is calculated by excluding the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The impact is the difference of adjusted return on equity - reported compared with adjusted return on equity, excluding from shareholders' equity, gains/losses associated with foreign currency remeasurement
9

Aflac Incorporated and Subsidiaries
Adjusted Earnings Per Share Excluding Current Period Foreign Currency Impact (1)
(Diluted Basis)
1Period
Adjusted EPS (1)
Growth
QTD Foreign Currency Impact (1)
YTD Foreign Currency Impact (1)
Excluding Foreign Currency Impact (1)
Change Excluding Foreign Currency Impact
2020$4.96 11.7 %N/A0.04 $4.92 10.8 %
20215.80 16.9 N/A(0.06)5.86 18.1 
20225.67 (2.2)N/A(0.41)6.08 4.8 
20236.23 9.9 N/A(0.19)6.43 13.4 
20247.21 15.7 N/A(0.18)7.39 18.6 
20231$1.55 7.6 %(0.07)(0.07)$1.62 12.5 %
21.58 7.5 (0.04)(0.11)1.62 10.2 
31.84 27.8 (0.06)(0.17)1.90 31.9 
41.25 (4.6)(0.02)(0.19)1.28 (2.3)
$6.23 9.9 %$6.43 13.4 %
20241$1.66 7.1 %(0.08)(0.08)$1.74 12.3 %
21.83 15.8 (0.07)(0.14)1.89 19.6 
32.16 17.4 (0.03)(0.17)2.19 19.0 
41.56 24.8 (0.01)(0.18)1.57 25.6 
$7.21 15.7 %$7.39 18.6 %
20251$1.66 — %(0.01)(0.01)$1.67 0.6 %
$1.66 — %$1.67 0.6 %
(1) See non-U.S.GAAP financial measures for definition of adjusted earnings and adjusted earnings excluding current period foreign currency impact
10

Aflac Incorporated and Subsidiaries
Composition of Invested Assets
(In Millions)
December 31,March 31,
2020202120222023202420242025
1
Fixed Maturity Securities (1)
$116,056 $107,369 $94,525 $88,508 $80,055 $84,283 $84,433 
Commercial mortgage and other loans, net of allowance for credit losses: (1)
Transitional Real Estate (floating rate)5,231 5,246 6,455 5,998 4,703 5,964 4,475 
Middle Market Loans (floating rate)3,635 4,601 5,028 4,531 4,283 4,487 4,301 
Commercial Mortgage Loans1,688 1,854 1,775 1,697 1,523 1,634 1,511 
Other Loans— 20 238 301 360 275 369 
Total Commercial mortgage and other loans, net of allowance for credit losses (1)
10,554 11,721 13,496 12,527 10,869 12,360 10,656 
Equity Securities, at FV through net earnings1,283 1,603 1,091 1,088 796 762 764 
2
Alternatives (2)
919 1,703 2,107 2,619 3,167 2,686 3,217 
Total Portfolio$128,812 $122,396 $111,219 $104,742 $94,887 $100,091 $99,070 
Unrealized Gains (Losses) on Invested Assets
(In Millions)
December 31,March 31,
2020202120222023202420242025
Fixed Maturity Securities:
Available For Sale - Gross Gains$14,771 $13,566 $4,800 $6,050 $5,308 $6,038 $4,345 
Available For Sale - Gross Losses(481)(239)(4,528)(3,449)(4,128)(3,502)(4,746)
Total Available For Sale14,290 13,327 272 2,601 1,180 2,536 (401)
Held to Maturity - Gross Gains5,935 4,869 2,154 1,838 815 1,556 402 
Held to Maturity - Gross Losses— — — — (9)— (155)
Total Held to Maturity$5,935 $4,869 $2,154 $1,838 $806 $1,556 $247 
Credit Ratings on Fixed Maturities
(At Amortized Cost)
December 31, March 31,
Credit Rating:2020202120222023202420242025
AAA1.0 %1.0 %1.6 %1.6 %1.5 %1.6 %1.3 %
AA4.5 5.1 5.2 5.7 6.0 6.1 6.0 
A69.3 68.9 68.0 68.1 68.0 67.7 68.2 
BBB21.9 22.5 23.0 22.9 22.9 23.1 22.9 
BB or Lower3.3 2.5 2.2 1.7 1.6 1.5 1.6 
100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %100.0 %
(1) Presented at amortized cost, net of reserves beginning in 2020
(2) Presented at carrying value; includes asset classes such as private equity and real estate funds managed by Global Investments; excludes Corporate driven activity, policy loans, short-term investments, real estate owned assets and FHLB equity balances
11

Aflac Incorporated and Subsidiaries
Supplemental Investment Data by Segment
December 31,3 Months Ended March 31,
2020202120222023202420242025
Aflac Japan:
1
Invested assets (in millions) (1)
¥11,936,087 ¥12,405,531 ¥12,617,181 ¥12,127,531 ¥11,881,515 ¥12,486,906 ¥11,909,722 
2
Return on average invested assets (2)
2.38 %2.72 %2.78 %2.90 %3.33 %3.14 %3.00 %
3
Portfolio book yield at end of period (3)
2.59 %2.60 %3.06 %3.18 %3.22 %3.24 %3.22 %
Total purchases for period (in millions) (3)
¥714,124 ¥952,038 ¥716,964 ¥378,541 ¥735,141 ¥300,570 ¥969,847 
4
New money yield (3)(4)
3.75 %3.50 %4.48 %5.18 %6.11 %5.57 %3.30 %
Aflac U.S.:
Invested assets (in millions) (1)
$14,848 $15,841 $16,772 $17,075 $17,341 $17,171 $17,131 
Return on average invested assets (2)
4.90 %4.87 %4.72 %4.88 %5.00 %4.87 %4.80 %
Portfolio book yield at end of period (3)
5.18 %4.94 %5.39 %5.53 %5.58 %5.57 %5.56 %
Total purchases for period (in millions) (3)
$1,050 $2,130 $1,701 $907 $934 $519 $493 
New money yield (3)(4)
3.04 %3.41 %5.16 %7.56 %6.90 %6.66 %6.61 %
5
Hedge Costs/Income Metrics (5)(6)
6December 31,3 Months Ended March 31,
2020202120222023202420242025
Aflac Japan:
7
FX hedged notional at end of period (in billions) - forwards (7)
$6.0 $6.4 $4.1 $— $— $— $0.2 
FX hedged notional at end of period (in billions) - put options13.1 11.6 13.5 24.7 24.2 24.7 24.2 
Amortized hedge costs for period (in millions)(206)(76)(112)(157)(26)(6)(7)
Corporate and Other (Parent Company):
FX hedged notional at end of period (in billions) - forwards (7)
$5.0 $5.0 $5.0 $2.6 $1.8 $2.3 $2.7 
FX hedged notional at end of period (in billions) - put options2.0 1.9 2.6 0.5 — — — 
Amortized hedge income (costs) for period (in millions)97 57 68 122 113 28 30 
(1) Invested assets, including cash and short term investments, are stated at amortized cost; except for equities, which are at fair value.
(2) Net of investment expenses and amortized hedge costs, year-to-date number reflected on a quarterly average basis.
(3) Includes fixed maturity securities, commercial mortgage and other loans, equity securities, and excludes alternative investments in limited partnerships, and any impacts from hedging activities.
(4) Reported on a gross yield basis; excludes investment expenses, external management fees, and amortized hedge costs.
(5) See non-U.S. GAAP financial measures for definition of amortized hedge costs/income. Further, the metrics in this table are split to show the hedging of the market value of a portion of the USD investments in Japan Segment’s "USD Program" in the "Japan Segment Portfolio Allocation by Currency" table on page 13 of this supplement as well as the corporate hedging activities at Aflac Incorporated.
(6) Aflac Japan and the Parent Company utilize foreign currency forwards and options to hedge foreign currency exchange rate risk. The hedge cost/income on the table above reflects our FX forward protection of the hedged USD portfolio, and hedge costs on one sided options used as caps, and on tail-risk put options.
(7) Notional is reported net of any offsetting positions within Aflac Japan or the Parent Company, respectively.
12

Aflac Incorporated and Subsidiaries
1
Japan Segment Portfolio Allocation by Currency (1)
(U.S. GAAP Basis)
(In Millions)
December 31, 2024March 31, 2025
Amortized Cost (3)
Fair Value
Amortized Cost (3)
Fair Value
JGB$31,951 $32,844 $33,369 $33,082 
Other16,867 17,145 17,578 17,287 
Total yen denominated48,818 49,989 50,947 50,369 
USD Program21,303 23,501 23,892 25,545 
Other1,645 2,406 1,769 2,465 
Total US dollar denominated22,948 25,907 25,661 28,010 
Total$71,766 $75,896 $76,608 $78,379 
2
Distribution of Consolidated Fixed Maturities by Sector (2)
(In millions)
March 31, 2025
3
Amortized Cost (3)
% of Total
Government and agencies$36,473 43.2 %
Municipalities2,358 2.8 
Mortgage- and asset-backed securities3,916 4.6 
Public utilities:7,021 8.3 
Electric5,492 6.5 
Natural Gas882 1.0 
Other647 0.8 
Sovereign and supranational803 1.0 
Banks/financial institutions:9,226 10.9 
Banking5,322 6.3 
Insurance1,925 2.3 
Other1,979 2.3 
Other corporate:24,636 29.2 
Basic Industry2,073 2.5 
Capital Goods2,623 3.1 
Communications2,610 3.1 
Consumer Cyclical1,962 2.3 
Consumer Non-Cyclical5,776 6.8 
Energy2,277 2.7 
Other1,126 1.3 
Technology3,258 3.9 
Transportation2,931 3.5 
Total fixed maturity securities$84,433 100.0 %
(1) The entire U.S. segment investment portfolio is U.S. dollar denominated.
(2) In the first quarter of 2023, the Utility/Energy subsector was combined with the Natural Gas subsector to better reflect the risk characteristics of those issuers and align more closely with industry benchmarks.
(3) Net of reserves
13

Aflac Incorporated and Subsidiaries
Long-Term Debt Data
Adjusted Leverage Ratios
(In Millions)
December 31,March 31,
2020202120222023202420242025
Notes payable$7,899 $7,956 $7,442 $7,364 $7,498 $7,912 $7,751 
50% of subordinated debentures and perpetual bonds(432)(389)(337)(315)(282)(295)(299)
Pre-funding of debt maturities— — — (211)— (198)— 
1
Adjusted debt (1)
7,467 7,568 7,105 6,839 7,216 7,420 7,453 
Total Shareholders' Equity33,559 17,031 20,140 21,985 26,098 23,537 26,338 
Accumulated other comprehensive (income) loss:
Unrealized foreign currency translation (gains) losses1,109 1,985 3,564 4,069 4,998 4,666 4,549 
Unrealized (gains) losses on fixed maturity securities(10,361)(9,602)702 (1,139)(24)(1,092)1,233 
Unrealized (gains) losses on derivatives34 30 27 22 20 26 18 
Effect on change in discount rate assumptions N/A15,832 2,100 2,560 (2,006)1,495 (3,899)
Pension liability adjustment284 166 36 8 (10)7 (42)
Adjusted book value (1)
$24,625 $25,442 $26,569 $27,505 $29,076 $28,639 $28,197 
2
Adjusted capitalization ex-AOCI (1)(2)
$32,524 $33,398 $34,011 $34,658 $36,574 $36,353 $35,948 
Adjusted debt to adjusted capitalization ex-AOCI23.0 %22.7 %20.9 %19.7 %19.7 %20.4 %20.7 %
3
Adjusted capitalization (1)(3)
$31,131 $31,247 $30,411 $30,581 $31,586 $31,680 $31,441 
Adjusted debt to adjusted capitalization24.0 %24.2 %23.4 %22.4 %22.8 %23.4 %23.7 %

4
Debt Maturities (4)
(In Millions)
March 31, 2025
≤ 1 year1 > 5 years5 > 10 years10 > 20 years20 years +Total
Senior Notes$83 $3,029 $1,690 $1,008 $1,294 $7,104 
Subordinated debt— — — — 602 602 
Total$83 $3,029 $1,690 $1,008 $1,896 $7,706 
(1) See non-U.S. GAAP financial measures for definition of: adjusted debt; adjusted book value; adjusted debt, including 50% of subordinated debentures and perpetual bonds; and adjusted book value, including unrealized foreign currency translation gains and losses and pension liability adjustment
(2) Adjusted capitalization ex-AOCI is the sum of adjusted debt, including 50% of subordinated debentures and perpetual bonds, plus adjusted book value
(3) Adjusted capitalization is sum of adjusted debt, including 50% of subordinated debentures and perpetual bonds, plus adjusted book value, including unrealized foreign currency translation gains and losses and pension liability adjustment
(4) Debt maturity amounts do not include discounts, premiums, deferred charges, or capital lease obligations.
14

Aflac Incorporated and Subsidiaries
Insurer Financial Strength Ratings
AM BestMoody'sS&PJCRR&I
U.S. Operating Companies:
Aflac of ColumbusA+Aa3A+AA+AA
Aflac of New YorkA+_A+__
Continental American Insurance CompanyA+____
Japan Operating Company:
Aflac Life Insurance Japan Ltd.A+Aa3A+AA+AA
Bermuda Operating Company:
Aflac Re Bermuda Ltd.___AA+_
Issuer Credit Ratings
AM BestMoody'sS&PJCRR&I
Aflac Incorporated:
Long-term Senior DebtaA3A-AA-A+
Junior Subordinated Debta-Baa1BBB_A-
Aflac of Columbus:
Long-term Senior Debtaa_A+AA+_
Aflac Life Insurance Japan, Ltd.:
Long-term Senior Debtaa_A+AA+_
The outlook for all ratings is stable.

15

Aflac U.S.
Statements of Pretax Adjusted Earnings
(Before Management Fee)
(In Millions)
Years Ended December 31,3 Months Ended March 31,
2020202120222023202420242025% Change
Revenues:
Net earned premiums:
Gross premiums$5,762 $5,540 $5,467 $5,669 $5,907 $1,489 $1,543 
Assumed (ceded)(4)73 103 6 (78)(14)(41)
Total net earned premiums5,758 5,614 5,570 5,675 5,829 1,475 1,502 1.8 %
Adjusted net investment income705 754 755 820 847 206 202 (1.9)
Other income excl. realized foreign exchange gains (losses)102 121 161 128 63 18 17 
Total adjusted revenues6,565 6,489 6,486 6,623 6,739 1,699 1,721 1.3 
Benefits and claims:
Benefits and claims, net:
Incurred claims -direct2,498 2,183 2,245 2,423 2,892 765 816 
Incurred claims -assumed (ceded)(1)89 104 17 (75)(12)(39)
Increase in FPB -direct271 463 326 280 — (41)(47)
Increase in FPB -assumed (ceded)(3)(11)4 (5)4 2 1 
Total benefits and claims, net, excluding reserve remeasurementN/A2,724 2,679 2,715 2,821 715 731 
Reserve remeasurement (gain) lossN/A(85)(124)(284)(95)(29)(15)
Total benefits and claims, net2,765 2,639 2,555 2,431 2,726 686 716 4.4 
Adjusted expenses:
Amortization of deferred policy acquisition costs570 442 455 490 530 132 137 3.8 
Insurance commissions576 550 553 561 563 141 135 (4.3)
Insurance and other expenses1,386 1,502 1,564 1,640 1,501 384 375 (2.3)
Total adjusted expenses 2,532 2,494 2,573 2,691 2,594 658 647 
Total benefits and adjusted expenses5,297 5,132 5,127 5,122 5,320 1,343 1,363 1.5 
Pretax adjusted earnings$1,268 $1,356 $1,359 $1,501 $1,419 $356 $358 0.6 %
16

Aflac U.S.
Balance Sheets
(In Millions)
December 31,March 31,
2020202120222023202420242025
Assets:
Investments and cash$17,949 $18,324 $15,987 $16,718 $16,775 $16,667 $16,706 
1
Receivables, net of allowance for credit losses (1)
667 574 584 688 671 710 707 
Accrued investment income172 169 184 183 178 186 176 
Deferred policy acquisition costs3,450 3,366 3,463 3,573 3,656 3,585 3,667 
Other assets (1)
626 758 784 698 650 703 625 
Total assets$22,864 $23,191 $21,002 $21,861 $21,930 $21,850 $21,881 
Liabilities and Shareholders' Equity:
Future policy benefits$9,674 $14,212 $10,870 $11,234 $10,584 $10,913 $10,678 
Policy and contract claims2,010 151 200 258 376 340 405 
Other policy liabilities126 119 117 107 103 113 111 
Deferred income taxes235 (328)(243)(311)(231)(223)(161)
Other liabilities2,016 2,010 2,080 2,062 2,055 2,091 1,760 
Shareholders' equity8,803 7,027 7,978 8,510 9,043 8,617 9,088 
Total liabilities & shareholders' equity$22,864 $23,191 $21,002 $21,861 $21,930 $21,850 $21,881 
(1) Certain reclassifications have been made to prior-year amounts to conform to current-year reporting classifications. These reclassifications had no impact on net earnings or total shareholders' equity.
17

Aflac U.S.
Quarterly Statements of Pretax Adjusted Earnings and Percentage Changes
(Restated to conform to current classifications)
(In Millions)
PeriodNet Earned Premiums% ChangeAdjusted NII% ChangeTotal Adjusted Revenues% ChangeBenefits & Claims, Net% ChangeAmort.% ChangeTotal Adjusted Expenses% ChangePretax Adjusted Earn.% Change
2020$5,758 (0.9)%$705 (2.1)%$6,565 0.2 %$2,765 (3.7)%$570 (0.5)%$2,532 5.2 %$1,268 (0.3)%
20215,614 (2.5)754 7.0 6,489 (1.2)2,639 (4.6)442 (22.5)2,494 (1.5)1,356 6.9 
20225,570 (0.8)755 0.1 6,486 — 2,555 (3.2)455 2.9 2,573 3.2 1,359 0.2 
20235,675 1.9 820 8.6 6,623 2.1 2,431 (4.9)490 7.7 2,691 4.6 1,501 10.4 
20245,829 2.7 847 3.3 6,739 1.8 2,726 12.1 530 8.2 2,594 (3.6)1,419 (5.5)
202311,428 1.1 197 7.1 1,660 1.3 651 (2.3)119 4.4 657 2.7 352 5.7 
21,425 2.2 203 5.2 1,663 2.1 645 (2.0)120 6.2 648 3.3 369 7.6 
31,419 3.2 209 13.0 1,661 3.9 510 (17.2)122 7.0 674 5.6 478 38.6 
41,403 1.1 211 9.9 1,639 1.1 626 2.0 129 12.2 712 6.7 302 (10.9)
202411,475 3.3 206 4.6 1,699 2.3 686 5.4 132 10.9 658 0.2 356 1.1 
21,455 2.1 218 7.4 1,684 1.3 680 5.4 132 10.0 621 (4.2)383 3.8 
31,459 2.8 210 0.5 1,684 1.4 694 36.1 132 8.2 640 (5.0)350 (26.8)
41,441 2.7 213 0.9 1,671 2.0 667 6.5 134 3.9 674 (5.3)330 9.3 
202511,502 1.8 202 (1.9)1,721 1.3 716 4.4 137 3.8 647 (1.7)358 0.6 
18

Aflac U.S.
Operating Ratios
(Before Management Fee)
1Period
12-Mo. Rolling Premium Persistency (1)
Total Benefit/ PremiumAmortization/ PremiumTotal Adjusted Expenses/ Total Adjusted RevenueCombined Ratio/ Total Adjusted RevenuePretax Profit Margin
202079.3 %48.0 %9.9 %38.6 %80.7 %19.3 %
202179.7 47.0 7.9 38.4 79.1 20.9 
202277.3 45.9 8.2 39.7 79.0 21.0 
202378.6 42.8 8.6 40.6 77.3 22.7 
202479.3 46.8 9.1 38.5 78.9 21.1 
2025 YTD79.3 47.7 9.1 37.6 79.2 20.8 
2023177.9 45.6 8.3 39.6 78.8 21.2 
278.2 45.3 8.4 39.0 77.8 22.2 
378.7 35.9 8.6 40.6 71.2 28.8 
478.6 44.6 9.2 43.4 81.6 18.4 
2024178.7 46.5 8.9 38.7 79.0 21.0 
278.7 46.7 9.1 36.9 77.3 22.7 
378.9 47.6 9.0 38.0 79.2 20.8 
479.3 46.3 9.3 40.3 80.3 19.7 
2025179.3 47.7 9.1 37.6 79.2 20.8 
(1) Includes Network Dental & Vision, Consumer Markets, and Group Premier Life, Absence Management, and Disability Solutions products beginning in 2021
19

Aflac U.S.
Aflac U.S. Sales Results
(In Millions)
PeriodAnnualized Premiums In Force% ChangeNew Annualized Premiums Sales% Change
2020$6,099 (3.2)%$1,093 (30.8)%
20216,003 (1.6)1,278 16.9 
20225,967 (0.6)1,483 16.1 
20236,161 3.3 1,558 5.0 
20246,383 3.6 1,543 (1.0)
202316,023 1.4 315 5.3 
26,064 2.3 324 6.4 
36,062 2.9 359 7.5 
46,161 3.3 559 2.6 
202416,211 3.1 298 (5.2)
26,239 2.9 331 2.0 
36,265 3.3 379 5.5 
46,383 3.6 534 (4.5)
202516,505 4.7 309 3.5 
20

Aflac U.S.
Aflac U.S. Product Mix
(New Annualized Premium Sales)
(In Millions)
1PeriodDisability% of TotalLife% of TotalAccident% of Total
Critical Care (1)
% of TotalHospital Indemnity% of TotalDental/ Vision% of TotalTotal
2020$243 22.3 %$80 7.3 %$285 26.1 %$242 22.2 %$197 18.0 %$45 4.1 %$1,093 
2021296 23.1 114 9.0 321 25.1 273 21.3 209 16.4 65 5.1 1,278 
2022378 25.5 156 10.5 338 22.8 299 20.1 226 15.3 85 5.8 1,483 
2023399 25.6 188 12.0 326 20.9 322 20.7 225 14.5 98 6.3 1,558 
2024406 26.3 219 14.2 302 19.6 322 20.9 212 13.7 82 5.3 1,543 
2023179 25.2 26 8.3 74 23.5 64 20.5 50 15.9 21 6.6 315 
280 24.8 35 10.7 73 22.4 66 20.4 46 14.3 24 7.4 324 
3101 28.2 54 15.0 72 19.9 67 18.6 45 12.6 20 5.7 359 
4139 24.8 73 13.0 107 19.2 124 22.2 83 14.9 33 5.9 559 
2024169 23.0 32 10.8 67 22.5 66 22.1 45 15.1 19 6.5 298 
285 25.7 41 12.4 70 21.2 70 21.1 45 13.7 19 5.9 331 
3109 28.8 69 18.3 67 17.7 70 18.6 45 11.9 18 4.7 379 
4143 26.8 77 14.4 97 18.2 115 21.6 76 14.3 25 4.7 534 
2025170 22.8 39 12.5 65 21.1 68 21.8 46 15.0 21 6.8 309 

Aflac U.S. Sales Force Data
Recruited Agents
PeriodCareerBrokerTotalAverage Weekly Producer EquivalentsProductivity (Production/ Avg. Weekly Producers)
202011,826 1,861 13,687 5,918 184,706 
202110,641 5,445 16,086 5,993 213,235 
20229,550 1,500 11,050 6,186 239,786 
202310,103 1,463 11,566 6,239 249,663 
20249,994 1,366 11,360 6,271 256,210 
202312,676 348 3,024 6,108 51,525 
22,801 399 3,200 6,196 52,361 
32,407 431 2,838 6,044 59,425 
42,219 285 2,504 6,608 84,645 
202412,330 346 2,676 5,800 51,432 
23,113 422 3,535 6,098 54,262 
32,553 335 2,888 5,890 64,336 
41,998 263 2,261 6,271 85,225 
202512,405 340 2,745 5,146 59,985 
(1) Includes cancer, critical illness, and hospital intensive care products
21

Aflac Japan
Statements of Pretax Adjusted Earnings
(Before Management Fee)
(In Millions)
Years Ended December 31,3 Months Ended March 31,
2020202120222023202420242025% Change
Revenues:
Net earned premiums:
Gross premiums¥1,409,134 ¥1,290,527 ¥1,246,657 ¥1,212,654 ¥1,159,719 ¥296,056 ¥288,319 
Assumed (ceded)(55,926)(50,864)(48,578)(84,838)(109,719)(26,197)(31,855)
Total net earned premiums1,353,208 1,239,663 1,198,079 1,127,816 1,050,000 269,859 256,464 (5.0)%
1
Net investment income: (1)
Yen denominated138,397 138,513 149,449 138,073 133,059 34,351 33,983 (1.1)
US$ denominated167,541 202,905 215,171 247,277 280,628 62,996 56,310 (10.6)
Net investment income305,938 341,419 364,621 385,352 413,687 97,348 90,293 (7.2)
2
Amortized hedge costs on foreign investments (2)
(22,816)(8,391)(13,155)(19,773)(3,755)(796)(1,071)34.5 
Adjusted net investment income283,122 333,028 351,466 365,579 409,932 96,551 89,222 (7.6)
Other income excl. realized foreign currency gains (losses)4,497 4,512 4,442 4,720 4,109 1,183 796 
Total adjusted revenues1,640,827 1,577,203 1,553,988 1,498,115 1,464,041 367,593 346,482 (5.7)
Benefits and claims:
Benefits and claims, net:
Incurred claims -direct734,471 743,247 788,572 781,774 815,894 224,857 239,635 
Incurred claims -assumed (ceded)(37,806)(31,798)(36,141)(70,748)(82,320)(19,407)(26,056)
Increase in FPB -direct260,200 149,084 73,592 44,121 (26,672)(23,025)(47,233)
Increase in FPB -assumed (ceded)(11,377)(11,425)(5,618)2,226 13,877 2,331 6,036 
Total benefits and claims, net, excluding reserve remeasurementN/A849,108 820,405 757,373 720,780 184,756 172,383 
Reserve remeasurement (gain) lossN/A(6,879)(13,337)(13,072)(64,197)(3,883)(3,738)
Total benefits and claims, net945,487 842,229 807,068 744,301 656,583 180,873 168,645 (6.8)
Adjusted expenses:
Amortization of deferred policy acquisition costs68,818 43,131 44,123 45,840 48,581 12,289 12,097 (1.6)
Insurance commissions79,036 77,449 73,482 68,751 65,889 16,988 15,992 (5.9)
Insurance and other expenses199,606 202,586 198,493 182,364 165,314 36,880 39,731 7.7 
Total adjusted expenses347,460 323,166 316,097 296,955 279,784 66,157 67,821 
Total benefits and adjusted expenses1,292,947 1,165,395 1,123,165 1,041,256 936,367 247,029 236,465 (4.3)
Pretax adjusted earnings¥347,881 ¥411,808 ¥430,823 ¥456,859 ¥527,675 ¥120,564 ¥110,017 (8.7)%
(1) Includes the net interest cash flows from derivatives associated with certain investment strategies
(2) See non-U.S. GAAP financial measures for the definition of amortized hedge costs/income
22

Aflac Japan
Statements of Pretax Adjusted Earnings
(Before Management Fee)
(In Millions)
Years Ended December 31,3 Months Ended March 31,
2020202120222023202420242025% Change
Revenues:
Net earned premiums
Gross premiums$13,193 $11,765 $9,558 $8,649 $7,654 $1,992 $1,890 
Assumed (ceded)(524)(463)(372)(602)(724)(176)(209)
Total net earned premiums12,670 11,301 9,186 8,047 6,930 1,816 1,681 (7.4)%
1
Net investment income (1)
Yen denominated1,296 1,262 1,140 985 879 231 224 (3.0)
US$ denominated1,569 1,845 1,641 1,755 1,849 424 369 (13.0)
Net investment income2,865 3,107 2,782 2,739 2,727 655 593 (9.5)
2
Amortized hedge costs on foreign investments (2)
(206)(76)(112)(157)(26)(6)(7)16.7 
Adjusted net investment income2,659 3,031 2,669 2,582 2,701 648 586 (9.6)
Other income excl. realized foreign currency gains (losses)42 41 35 35 28 9 5 
Total adjusted revenues15,371 14,373 11,890 10,664 9,659 2,473 2,272 (8.1)
Benefits and claims:
Benefits and claims, net
Incurred claims -direct6,875 6,776 6,038 5,582 5,390 1,512 1,572 
Incurred claims -assumed (ceded)(354)(290)(275)(502)(543)(131)(171)
Increase in FPB -direct2,437 1,356 562 314 (184)(154)(310)
Increase in FPB -assumed (ceded)(107)(104)(43)15 99 16 40 
Total benefits and claims, net, excluding reserve remeasurementN/A7,738 6,282 5,409 4,761 1,243 1,130 
Reserve remeasurement (gain) lossN/A(62)(91)(96)(444)(26)(25)
Total benefits and claims, net8,851 7,675 6,191 5,313 4,317 1,217 1,105 (9.2)
Adjusted expenses:
Amortization of deferred policy acquisition costs644 393 338 326 321 83 79 (4.8)
Insurance commissions 740 706 563 491 435 114 105 (7.9)
Insurance and other expenses1,873 1,843 1,517 1,300 1,092 249 261 4.8 
Total adjusted expenses3,257 2,942 2,417 2,117 1,848 445 445 
Total benefits and adjusted expenses12,108 10,618 8,609 7,430 6,165 1,663 1,550 (6.8)
Pretax adjusted earnings$3,263 $3,756 $3,281 $3,234 $3,494 $810 $722 (10.9)%
(1) Includes the net interest cash flows from derivatives associated with certain investment strategies.
(2) See non-U.S. GAAP financial measures for definition of amortized hedge costs/income.
23

Aflac Japan
Balance Sheets
(In Millions)
December 31,March 31,
2020202120222023202420242025
Assets:
Investments and cash¥13,080,154 ¥13,645,902 ¥12,777,746 ¥12,566,939 ¥12,216,793 ¥12,993,051 ¥11,955,918 
Receivables, net of allowance for credit losses20,782 22,439 23,138 24,848 31,172 60,415 38,813 
Accrued investment income62,722 67,493 76,489 74,666 77,899 72,487 73,268 
Deferred policy acquisition costs723,579 745,510 766,506 788,394 806,920 792,504 809,782 
Other assets320,351 386,832 387,065 946,644 1,136,609 948,349 1,091,922 
Total assets¥14,207,588 ¥14,868,176 ¥14,030,944 ¥14,401,491 ¥14,269,393 ¥14,866,806 ¥13,969,701 
Liabilities and Shareholders' Equity:
Future policy benefits¥9,175,501 ¥11,755,704 ¥10,315,140 ¥10,444,044 ¥9,630,864 ¥10,299,213 ¥9,219,327 
Policy and contract claims328,778 — 28 465 754 653 833 
Unearned premiums361,010 284,045 227,732 192,595 189,583 185,338 189,129 
Other policyholders' funds808,429 877,690 880,989 874,854 863,699 882,723 876,538 
Income taxes (prim. deferred)478,969 36,166 114,688 95,297 136,262 167,677 173,374 
Other liabilities253,219 502,633 575,554 576,879 526,477 796,972 699,643 
Shareholders' equity2,801,682 1,411,938 1,916,812 2,217,357 2,921,754 2,534,230 2,810,856 
Total liabilities & shareholders' equity¥14,207,588 ¥14,868,176 ¥14,030,944 ¥14,401,491 ¥14,269,393 ¥14,866,806 ¥13,969,701 
24

Aflac Japan
Balance Sheets
(In Millions)
December 31,March 31,
2020202120222023202420242025
Assets:
Investments and cash$126,378 $118,639 $96,290 $88,606 $77,233 $85,814 $79,962 
Receivables, net of allowance for credit losses201 195 174 175 197 399 260 
Accrued investment income606 587 576 526 492 479 490 
Deferred policy acquisition costs6,991 6,482 5,776 5,559 5,102 5,234 5,416 
Other assets3,095 3,363 2,917 6,675 7,186 6,263 7,303 
Total assets$137,271 $129,266 $105,734 $101,541 $90,210 $98,189 $93,430 
Liabilities and Shareholders' Equity:
Future policy benefits$88,652 $102,206 $77,733 $73,638 $60,885 $68,022 $61,659 
Policy and contract claims3,177 — — 3 5 4 6 
Unearned premiums3,488 2,470 1,716 1,358 1,199 1,224 1,265 
Other policyholders' funds7,811 7,631 6,639 6,169 5,460 5,830 5,862 
Income taxes (prim. deferred)4,630 314 781 619 884 1,088 1,153 
Other liabilities2,447 4,369 4,337 4,067 3,328 5,264 4,679 
Shareholders' equity27,068 12,276 14,528 15,687 18,449 16,757 18,806 
Total liabilities & shareholders' equity$137,271 $129,266 $105,734 $101,541 $90,210 $98,189 $93,430 
25

Aflac Japan
Quarterly Statements of Pretax Adjusted Earnings and Percentage Changes
(In Millions)
PeriodNet Earned Premiums% ChangeAdjusted NII% ChangeTotal Adjusted Revenues% ChangeBenefits & Claims, Net% ChangeAmort.% ChangeTotal Adjusted Expense% ChangePretax Adjusted Earn.% Change
2020¥1,353,208 (2.8)%¥283,122 4.4 %¥1,640,827 (1.7)%¥945,487 (2.3)%¥68,818 (11.0)%¥347,459 0.4 %¥347,881 (2.0)%
20211,239,663 (8.4)333,028 17.6 1,577,203 (3.9)842,229 (10.9)43,131 (37.3)323,166 (7.0)411,808 18.4 
20221,198,079 (3.4)351,466 5.5 1,553,988 (1.5)807,068 (4.2)44,123 2.3 316,097 (2.2)430,823 4.6 
20231,127,816 (5.9)365,579 4.0 1,498,115 (3.6)744,301 (7.8)45,840 3.9 296,955 (6.1)456,859 6.0 
20241,050,000 (6.9)409,932 12.1 1,464,041 (2.3)656,583 (11.8)48,581 6.0 279,784 (5.8)527,675 15.5 
20231287,048 (5.9)80,931 2.4 369,145 (4.1)192,270 (7.1)11,281 3.6 72,625 (5.8)104,251 3.2 
2283,377 (6.2)87,963 (6.4)372,544 (6.2)186,310 (9.0)11,359 3.6 72,808 (7.9)113,426 (0.1)
3285,305 (2.8)98,866 7.2 385,363 (0.5)185,855 (5.2)11,435 3.3 73,068 (5.7)126,440 11.4 
4272,085 (8.5)97,819 13.5 371,063 (3.5)179,866 (9.7)11,766 5.0 78,454 (4.9)112,742 9.7 
20241269,859 (6.0)96,551 19.3 367,593 (0.4)180,873 (5.9)12,289 8.9 66,157 (8.9)120,564 15.6 
2267,319 (5.7)112,987 28.4 381,181 2.3 178,904 (4.0)11,995 5.6 67,754 (6.9)134,523 18.6 
3255,397 (10.5)98,969 0.1 355,332 (7.8)125,548 (32.4)12,257 7.2 71,039 (2.8)158,745 25.5 
4257,425 (5.4)101,425 3.7 359,935 (3.0)171,258 (4.8)12,040 2.3 74,834 (4.6)113,843 1.0 
20251256,464 (5.0)89,222 (7.6)346,482 (5.7)168,645 (6.8)12,097 (1.6)67,821 2.5 110,017 (8.7)
26

Aflac Japan
Operating Ratios
(Before Management Fee)
1Period
12-Month Rolling Premium Persistency (1)
Total Benefit/ PremiumTotal Benefit/ Premiums
(3rd sector)		Amortization/
Premium		Total Adjusted Expenses/
Total Adjusted Revenue		Combined Ratio/ Total Adjusted RevenuePretax Profit Margin
202095.1 %69.9 %59.7 %5.1 %21.2 %78.8 %21.2 %
202194.3 67.9 58.7 3.5 20.5 73.9 26.1 
202294.1 67.4 58.5 3.7 20.3 72.3 27.7 
202393.4 66.0 56.2 4.1 19.8 69.5 30.5 
202493.4 62.5 53.5 4.6 19.1 64.0 36.0 
2025 YTD93.8 65.8 56.3 4.7 19.6 68.2 31.8 
2023193.9 67.0 57.7 3.9 19.7 71.8 28.2 
293.8 65.7 56.2 4.0 19.5 69.6 30.4 
393.5 65.1 54.8 4.0 19.0 67.2 32.8 
493.4 66.1 56.2 4.3 21.1 69.6 30.4 
2024193.4 67.0 57.5 4.6 18.0 67.2 32.8 
293.3 66.9 57.8 4.5 17.8 64.7 35.3 
393.3 49.2 41.8 4.8 20.0 55.3 44.7 
493.4 66.5 56.9 4.7 20.8 68.4 31.6 
2025193.8 65.8 56.3 4.7 19.6 68.2 31.8 
(1) Premium persistency presented on a 12-month rolling basis for all periods, rather than year to date. Beginning January 2025, the Company implemented a new methodology of calculating persistency rate which excludes starting annuity payment transfers, premium halving and waiver premium from the terminations; prior periods have not been retroactively adjusted.
27

Aflac Japan
Aflac Japan Sales Results
(In Millions, unless otherwise noted)
PeriodAnnualized Premium In Force
(Billions)		% ChangeThird Sector New Annualized Premium Sales% ChangeTotal New Annualized Premium Sales% Change
2020¥1,426.5 (4.2)%¥45,110 (38.1)%¥50,852 (36.2)%
20211,360.6 (4.7)48,977 8.6 54,764 7.7 
20221,301.0 (4.4)47,998 (2.0)54,765 — 
20231,246.4 (4.2)52,234 8.8 60,730 10.9 
20241,209.0 (3.0)47,651 (8.8)64,111 5.6 
202311,281.4 (4.8)10,952 2.6 13,213 10.8 
21,268.4 (4.8)13,964 22.8 16,112 26.6 
31,257.4 (4.4)13,606 7.7 15,600 12.4 
41,246.4 (4.2)13,711 3.0 15,805 (2.6)
202411,232.6 (3.8)10,767 (1.7)12,534 (5.1)
21,222.5 (3.6)12,712 (9.0)16,833 4.5 
31,216.7 (3.2)11,925 (12.4)17,522 12.3 
41,209.0 (3.0)12,246 (10.7)17,222 9.0 
202511,199.1 (2.7)10,655 (1.0)14,112 12.6 
28

Aflac Japan
Aflac Japan Product Mix
(New Annualized Premium Sales)
(In Billions)
PeriodCancer% of TotalMedical and Other Health% of TotalChild Endowment% of TotalWAYS% of TotalOrdinary Life Other% of TotalOther% of TotalTotal
2020¥28.8 56.6 %¥16.4 32.2 %¥0.2 0.4 %¥0.4 0.7 %¥4.8 9.5 %¥0.3 0.6 %¥50.9 
202127.0 49.2 20.7 37.7 0.2 0.3 0.4 0.8 4.9 9.0 1.6 3.0 54.8 
202230.9 56.5 15.3 27.9 0.2 0.3 1.9 3.5 4.5 8.1 2.0 3.7 54.8 
202338.9 64.1 12.6 20.6 0.2 0.4 4.1 6.8 3.9 6.5 1.0 1.6 60.7 
202436.9 57.5 10.4 16.1 0.1 0.2 1.4 2.2 14.8 23.0 0.6 1.0 64.1 
202317.9 59.9 2.8 21.4 0.1 0.6 1.2 8.9 1.0 7.3 0.2 1.9 13.2 
210.9 67.7 2.9 17.9 0.1 0.4 1.0 6.6 1.0 6.1 0.2 1.3 16.1 
310.3 65.6 3.2 20.4 0.1 0.4 0.9 6.0 0.9 6.1 0.2 1.5 15.6 
49.9 62.5 3.7 23.2 — 0.3 0.9 6.0 1.1 6.6 0.2 1.4 15.8 
202417.9 63.2 2.7 21.4 — 0.3 0.7 5.3 1.0 8.1 0.2 1.7 12.5 
29.9 58.8 2.7 16.0 — 0.2 0.4 2.3 3.7 21.8 0.1 0.9 16.8 
39.7 55.1 2.2 12.4 — 0.1 0.1 0.8 5.4 30.8 0.1 0.8 17.5 
49.4 54.5 2.7 16.1 — 0.1 0.2 1.3 4.7 27.1 0.1 0.9 17.2 
202518.4 59.7 2.1 15.3 — 0.1 0.2 1.8 3.2 22.3 0.1 0.8 14.1 
29

Aflac Japan
Aflac Japan Sales Force Data
Number of Agencies by TypeSales Contribution by Agency Type
1PeriodIndividual/ Independent CorporateAffiliated
Corporate		BankTotalIndividual/ Independent CorporateAffiliated
Corporate		Bank
Licensed Sales
Associates (1)
Recruited
Agencies
20207,231 1,312 361 8,904 52.3 %42.6 %5.1 %111,886 48 
20216,779 1,283 360 8,422 51.1 43.7 5.2 111,854 62 
20226,159 1,239 359 7,757 49.5 46.5 4.0 110,259 38 
20235,751 1,203 360 7,314 46.7 50.0 3.3 113,010 24 
20245,384 1,166 360 6,910 48.2 48.6 3.2 113,836 50 
202316,056 1,232 359 7,647 50.9 45.4 3.7 109,769 4 
25,947 1,219 360 7,526 44.8 52.5 2.7 112,593 5 
35,843 1,211 360 7,414 44.4 51.9 3.7 112,795 6 
45,751 1,203 360 7,314 47.7 49.2 3.1 113,010 9 
202415,659 1,191 360 7,210 48.9 48.0 3.1 112,645 12 
25,542 1,180 360 7,082 49.5 48.4 2.1 114,424 12 
35,464 1,176 360 7,000 46.2 50.2 3.6 114,473 19 
45,384 1,166 360 6,910 48.5 47.7 3.8 113,836 7 
202515,300 1,155 358 6,813 52.8 43.8 3.4 112,996 18 
(1) Excludes Dai-ichi Life, banks, Japan Post Group and Daido Life
30

Aflac Japan
Yen/Dollar Exchange Rates
1Period
Closing Rate(1)
Quarterly AverageYearly Cumulative Average% Change
2020103.50 N/A106.86 2.1 %
2021115.02 N/A109.79 (2.7)
2022132.70 N/A130.17 (15.7)
2023141.83 N/A140.57 (7.4)
2024158.18 N/A150.97 (6.9)
20231133.53 132.30 132.30 (12.2)
2144.99 137.53 134.97 (9.0)
3149.58 144.97 138.38 (8.5)
4141.83 148.11 140.57 (7.4)
20241151.41 148.67 148.67 (11.0)
2161.07 155.70 152.30 (11.4)
3142.73 147.95 150.60 (8.1)
4158.18 152.35 150.97 (6.9)
20251149.52 152.40 152.40 (2.4)
(1) Closing rate is based on the latest available and published MUFG Bank Ltd. TTM mid-day exchange rate.
31

Corporate and Other
Statements of Pretax Adjusted Earnings
(Before Management Fee)
(In Millions)
Years Ended December 31,3 Months Ended March 31,
2020202120222023202420242025% Change
Revenues:
Total net earned premiums$194 $180 $145 $400 $680 $165 $198 20.0 %
1
Net investment income (1)
80 (73)30 (77)201 51 96 88.2 
2
Amortized hedge income (2)
97 57 68 121 113 28 30 7.1 
Adjusted net investment income177 (16)98 44 314 79 126 59.5 
Other income13 11 24 15 13 3 2 (33.3)
Total adjusted revenues384 175 267 460 1,007 247 326 32.0 
Benefits and expenses:
Total benefits and claims, net, excluding reserve remeasurement180 161 141 470 426 108 125 15.7 
Reserve remeasurement (gain) loss— — — (3)(19)(1)(1)— 
Total benefits and claims, net180 161 141 467 407 107 124 15.9 
Interest expense164 165 162 144 156 36 45 25.0 
Other adjusted expenses155 142 181 273 412 107 114 6.5 
Total benefits and adjusted expenses499 469 485 885 975 250 283 13.2 
Pretax adjusted earnings$(115)$(293)$(218)$(425)$32 $(3)$43 1,533.3 %
(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $8 and $32 for the three-month periods ended March 31, 2025, and 2024, respectively, is included as a reduction to net investment income. Tax credits on these investments of $7 and $33 for the three-month periods ended March 31, 2025, and 2024, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings.
(2) See non-U.S. GAAP financial measures for the definition of amortized hedge cost/income
32

Non-U.S. GAAP Financial Measures

This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations.
Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).
The Company defines the non-U.S. GAAP financial measures included in this document as follows:
•
Adjusted book value is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude accumulated other comprehensive income, which fluctuates due to market movements that are outside management’s control. The most comparable U.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively.
Adjusted book value excluding foreign currency remeasurement is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet and excluding the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. Adjusted book value excluding foreign currency remeasurement per common share is adjusted book value excluding foreign currency remeasurement at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share important as they exclude both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measures for adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share are total book value and total book value per common share, respectively.
•
Adjusted book value including unrealized foreign currency translation gains and losses and pension liability adjustment is adjusted book value plus unrealized foreign currency translation gains and losses and pension liability adjustment. The Company considers adjusted book value including unrealized foreign currency translation gains and losses and pension liability adjustment important as it excludes certain components of accumulated other comprehensive income, which fluctuates due to market movements that are outside management's control; however, it includes the impact of foreign currency as a result of the significance of Aflac’s Japan operation. The most comparable U.S. GAAP financial measure for adjusted book value including unrealized foreign currency translation gains and losses and pension liability adjustment is total book value.

•
Adjusted debt is the sum of notes payable, as recorded on the U.S. GAAP balance sheet, excluding 50% of subordinated debentures and perpetual bonds and all pre-funding of debt maturities. The Company considers adjusted debt important as it measures outstanding debt consistently with expectations of the Company’s rating agency stakeholders. The most comparable U.S. GAAP financial measure for adjusted debt is notes payable.
•
Adjusted debt including 50% of subordinated debentures and perpetual bonds is the sum of notes payable, as recorded on the U.S. GAAP balance sheet, excluding pre-funding of debt maturities. The Company considers adjusted debt including 50% of subordinated debentures and perpetual bonds important as it measures outstanding debt consistently with expectations of the Company’s rating agency stakeholders. The most comparable U.S. GAAP financial measure for adjusted debt including 50% of subordinated debentures and perpetual bonds is notes payable.
33

•
Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that are outside of management’s control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The most comparable U.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively.
•
Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in Japan and foreign exchange rates are outside management’s control; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) into U.S. dollars. The most comparable U.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively.
•
Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign exchange risks in the Company's Japan segment or in Corporate and other. These amortized hedge costs/income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight-line basis over the contractual term of the derivative. The Company believes that amortized hedge costs/income measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income. There is no comparable U.S. GAAP financial measure for amortized hedge costs/income.
•
Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest income/expense from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses. The Company considers adjusted net investment gains and losses important as it represents the remainder amount that is considered outside management’s control, while excluding the components that are within management’s control and are accordingly reclassified to net investment income and interest expense. The most comparable U.S. GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.
•
Adjusted net investment income is net investment income adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, and ii) net interest income/expense from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and losses to net investment income. The Company considers adjusted net investment income important because it provides a more comprehensive understanding of the costs and income associated with the Company’s investments and related hedging strategies. The most comparable U.S. GAAP financial measure for adjusted net investment income is net investment income.
•
Adjusted return on equity is annualized adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using annualized net earnings and average total shareholders’ equity.
•
Adjusted return on equity excluding foreign currency remeasurement is annualized adjusted earnings divided by average shareholders’ equity, excluding both accumulated other comprehensive income and the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The Company considers adjusted return on equity excluding foreign currency remeasurement important because it excludes both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity excluding foreign currency remeasurement is return on average equity as determined using annualized net earnings and average total shareholders’ equity.

34

Document 1

EX-99.3 4 aflex993teleconferencespee.htm EX-99.3 Document






aflac-incorporatedx4xproa.jpg






First Quarter 2025
Earnings Call
Video Update
Max K. Brodén







April 30, 2025



For more information contact:
Investor and Rating Agency Relations
800.235.2667
Aflac Worldwide Headquarters
1932 Wynnton Road
Columbus, GA 31999
1

Preliminary note: Forward-Looking Information and Non-U.S. GAAP Financial Measures

Forward-Looking Information

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This transcript contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as “expect,” “anticipate,” “believe,” “goal,” “objective,” “may,” “should,” “estimate,” “intends,” “projects,” “will,” “assumes,” “potential,” “target,” "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.

The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:

•difficult conditions in global capital markets and the economy, including inflation
•defaults and credit downgrades of investments
•global fluctuations in interest rates and exposure to significant interest rate risk
•concentration of business in Japan
•limited availability of acceptable yen-denominated investments
•foreign currency fluctuations in the yen/dollar exchange rate
•differing interpretations applied to investment valuations
•significant valuation judgments in determination of expected credit losses recorded on the Company's investments
•decreases in the Company's financial strength or debt ratings
•decline in creditworthiness of other financial institutions
•the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
•deviations in actual experience from pricing and reserving assumptions
•ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives
•interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems
•subsidiaries' ability to pay dividends to the Parent Company
•inherent limitations to risk management policies and procedures
•operational risks of third-party vendors
•tax rates applicable to the Company may change
•failure to comply with restrictions on policyholder privacy and information security
•extensive regulation and changes in law or regulation by governmental authorities
•competitive environment and ability to anticipate and respond to market trends
•catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, major public health issues, terrorism or other acts of violence, and damage incidental to such events
•ability to protect the Aflac brand and the Company's reputation
•ability to effectively manage key executive succession
•changes in accounting standards
•level and outcome of litigation or regulatory inquiries
•allegations or determinations of worker misclassification in the United States

Non-U.S. GAAP Financial Measures and Reconciliations

This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial


measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations.

Definitions of the Company’s non-U.S. GAAP financial measures and applicable reconciliations to the most comparable U.S. GAAP measures are provided in the presentation slides that accompany this transcript.

Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).




Max K. Brodén
Q1 2025 CFO Video Update
April 30, 2025

Thank you for joining me as I provide a financial update on Aflac Incorporated's results for the first quarter of 2025.

For the quarter, adjusted earnings per diluted share was flat year over year at $1.66, with a $0.01 negative impact from FX in the quarter. In this quarter, remeasurement gains on reserves totaled $41 million, reducing benefits. Variable investment income ran $27 million below our long-term return expectations, while one make whole call generated income of $16 million.

Adjusted book value per share excluding foreign currency remeasurement increased 2.2%. The adjusted ROE was 12.7%, and 15.6% excluding foreign currency remeasurement, an acceptable spread to our cost of capital. Overall, we view these results in the quarter as solid.

Starting with our Japan segment, net earned premiums for the quarter declined 5.0%. Aflac Japan's underlying earned premiums,1 which adjusts net earned premiums to exclude the impact of deferred profit liability, paid up policies and reinsurance, declined 1.4%. We believe this metric better provides insight into long-term premium trends.

Japan’s total benefit ratio came in at 65.8% for the quarter, down 120 basis points year over year. The third sector benefit ratio was 56.3% for the quarter, down approximately 120 basis points year over year. We estimate the impact from remeasurement gains to be approximately 150 basis points favorable to the benefit ratio in Q1 2025. Long-term experience trends, as they relate to treatments of cancer and hospitalization, continue to be in place, leading to continued favorable underwriting experience.

Persistency remained solid at 93.8%, which was up 40 basis points year over year and in line with our expectations. However, beginning in this quarter, we have revised the premium persistency definition to better reflect the economic trends of the business. As a result, we do not treat annuitization as a lapse for persistency purposes, and this revised definition raised the reported persistency by roughly 30 basis points.

Our expense ratio in Japan was 19.6% for the quarter, up 160 basis points year over year, driven primarily by an increase in technology expenses.

For the quarter, adjusted net investment income in yen terms was down 7.6%, primarily driven by lower floating rate income, the transfer of assets to Aflac Re Bermuda associated with reinsurance, and variable investment income, somewhat offset by higher returns from the structured private credit portfolio.

The pretax margin for Japan in the quarter was 31.8%, down 100 basis points year over year, but a very good result.

Turning to U.S. results, net earned premium was up 1.8%. Persistency increased 60 basis points year over year to 79.3%.

Our U.S. total benefit ratio came in at 47.7%, 120 basis points higher than Q1 2024, driven by business mix and lower remeasurement gains than a year ago. We estimate that remeasurement gains impacted the benefit ratio by approximately 100 basis points in the quarter, as claims have remained below our long-term expectations. In the quarter, we benefited from favorable underwriting on our small but growing long-term disability block.

1Aflac Japan's underlying earned premiums is a measure that is calculated in Japanese yen and adjusts Aflac Japan’s net earned premiums for significant variables including the increase in paid-up policies between beginning of the comparable period and the end of the period presented, the change in deferred profit liability on limited payment contracts, and all Aflac Japan ceded premiums through both internal and external reinsurance. The change in Aflac Japan’s underlying earned premiums is reflected as a percentage change. The Company feels this measure is useful for investors to understand the impacts these items have on Aflac Japan's net earned premiums.


Our expense ratio in the U.S. was 37.6%, down 110 basis points year over year, primarily driven by platforms improving scale and continuous focus on expense efficiency.

Our growth initiatives – group life & disability, network dental and vision and direct to consumer – increased our total expense ratio by 50 basis points for the quarter. This is in line with our expectations, and we would expect this impact to decrease as we continue to approach scale.

Adjusted net investment income in the U.S. was down 1.9% for the quarter primarily driven by lower floating rate income.

Profitability in the U.S. segment was very strong, with a pretax margin of 20.8%, a 20 basis points decline compared with a year ago.

During the quarter, we increased our CECL reserves associated with our commercial real estate portfolio by $2 million net of charge offs as property values remain at distressed valuations. We also foreclosed on two loans, adding them to our real estate owned portfolio consistent with our strategy for maximizing recovery values.

Our portfolio of first lien senior secured middle market loans continued to perform well with increased CECL reserves of $7 million in the quarter net of charge offs.

In our corporate segment, we recorded a pretax gain of $43 million. Adjusted net investment income was $47 million higher than last year due to a combination of lower volume of tax credit investments and higher asset balances, which included the impact of the reinsurance transaction in Q4 2024. Our tax credit investments impacted the corporate net investment income line for U.S. GAAP purposes negatively by $8 million in the quarter with an associated credit to the tax line. The net impact to our bottom line was a positive $0.4 million in the quarter. To date, these investments are performing well and in line with our expectations.

Unencumbered holding company liquidity stood at $4.3 billion, $2.6 billion above our minimum balance.

We repurchased $900 million of our own stock and paid dividends of $317 million in Q1, offering good relative IRR on these capital deployments. We will continue to be flexible and tactical in how we manage the balance sheet and deploy capital in order to drive strong risk-adjusted ROE with a meaningful spread to our cost of capital.

Our capital position remains strong, and we ended the quarter with an SMR above 950%, and estimated regulatory ESR above 250%. Our combined RBC, while not finalized, we estimate to be greater than 600%. These are strong capital ratios, which we actively monitor, stress and manage to withstand credit cycles as well as external shocks. For U.S. statutory, we recorded a $6 million valuation allowance on mortgage loans as an unrealized loss. We ended the quarter, March 31 with net ¥5.2 billion of Japan FSA realized gains net of losses for securities impairment. This is well within our expectations and with limited impact to both earnings and capital.

Our leverage was 20.7% for the quarter, which is within our target range of 20% to 25%. As we hold approximately 59% of our debt in yen, this leverage ratio is impacted by moves in the yen/dollar exchange rate. This is intentional and part of our enterprise hedging program – protecting the economic value of Aflac Japan in U.S. dollar terms.

On a U.S. GAAP basis, we are impacted by moves in the yen as our yen denominated earnings will translate into USD at different exchange rates. We currently estimate that every 5 yen/dollar move would impact our underlying EPS by roughly $0.07.

As foreign currency markets have experienced a marked increase in volatility, I would like to reiterate our approach to managing foreign currency exposure. Fundamentally, we size our unhedged U.S. dollar exposure to the estimated economic surplus associated with our Japanese business. At the end of Q1, we held $25.5 billion of unhedged USD assets in our Japan general account – forward contracts at Inc. with a notional balance of $2.7 billion and $4.4 billion of yen denominated debt. We also hold $24.2 billion of notional of out of the money put options, which provide tail protection against a large appreciation in the yen. Adding this up, we feel that we are very well-positioned on an economic basis.




Thank you. I look forward to discussing our results in further detail on tomorrow's earnings call.

Document 1

EX-99.4 5 maxteleconferencepresent.htm EX-99.4 maxteleconferencepresent

 

Forward-Looking Statements and Non-GAAP Financial Measures The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as “expect,” “anticipate,” “believe,” “goal,” “objective,” “may,” “should,” “estimate,” “e,” “intends,” “projects,” “will,” “assumes,” “potential,” “target,” "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements. The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements: Non-U.S. GAAP Financial Measures and Reconciliations This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations. Definitions of the Company’s non-U.S. GAAP financial measures and applicable reconciliations to the most comparable U.S. GAAP measures are provided as appropriate. Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in yen and never converted into dollars but translated into dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM). • difficult conditions in global capital markets and the economy, including inflation • defaults and credit downgrades of investments • global fluctuations in interest rates and exposure to significant interest rate risk • concentration of business in Japan • limited availability of acceptable yen-denominated investments • foreign currency fluctuations in the yen/dollar exchange rate • differing interpretations applied to investment valuations • significant valuation judgments in determination of expected credit losses recorded on the Company's investments • decreases in the Company's financial strength or debt ratings • decline in creditworthiness of other financial institutions • the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners • deviations in actual experience from pricing and reserving assumptions • ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives • interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems • subsidiaries' ability to pay dividends to the Parent Company • inherent limitations to risk management policies and procedures • operational risks of third-party vendors • tax rates applicable to the Company may change • failure to comply with restrictions on policyholder privacy and information security • extensive regulation and changes in law or regulation by governmental authorities • competitive environment and ability to anticipate and respond to market trends • catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, major public health issues, terrorism or other acts of violence, and damage incidental to such events • ability to protect the Aflac brand and the Company's reputation • ability to effectively manage key executive succession • changes in accounting standards • level and outcome of litigation or regulatory inquiries • allegations or determinations of worker misclassification in the United States

 

Max K. Brodén Senior Executive Vice President CFO, Aflac Incorporated

 

ROE View 33.0 0.4 13.7 12.7 16.2 15.6 ROE (%) Adjusted ROE* (%) Adjusted ROE ex Foreign Currency Remeasurement* (%) 1Q24 1Q25 *Non-GAAP financial measure. See appendix for information about this measure. 4

 

*Premium persistency presented on a 12-month rolling basis for all periods, rather than year to date. Beginning January 2025, the Company implemented a new methodology of calculating persistency rate which excludes starting annuity payment transfers, premium halving and waiver premium from the terminations; prior periods have not been retroactively adjusted. Aflac Japan Maintains Solid Persistency 93.4% 93.3% 93.3% 93.4% 93.8% 1Q24 2Q24 3Q24 4Q24 1Q25 5 *

 

Aflac Japan 1Q25: Benefit Ratio % 66 64 Expense Ratio % 23 20 Pretax Profit Margin % 33 30 65.8% 19.6% 31.8% 2025 Outlook Ranges YTD Actual Operating Ratios 6

 

Aflac U.S. Maintains Solid Persistency 78.7% 78.7% 78.9% 79.3% 79.3% 1Q24 2Q24 3Q24 4Q24 1Q25 7

 

Aflac U.S. 1Q25: Benefit Ratio % 52 48 Expense Ratio % 39 36 Pretax Profit Ratio % 20 17 47.7% 37.6% 2025 Outlook Ranges YTD Actual Operating Ratios 8 20.8%

 

Continued Tactical Capital Deployment 288 283 280 277 317 750 800 500 750 900 Dividends Repurchase 1Q24 2Q24 3Q24 4Q24 1Q25 Dividends and Share Repurchase ($ millions) 9

 

Strong Capital Ratios 1 As of March 31, 2025 10 ESRe1 (Japan) 230 170 >250% Combined RBC Ratioe2 (U.S.) 450 350 >600% Japan U.S. 1Estimated regulatory ESR with undertaking-specific parameter (USP), sensitivities produced by internal model result in a slightly more conservative outcome, i.e., a greater sensitivity to all variables shown, especially the change in yen, credit spreads and interest rates 2Combined RBC ratio is the aggregated ratio of four subsidiaries: American Family Life Assurance Company of Columbus, Continental American Insurance Company, American Family Life Assurance Company of New York and Tier One Insurance Company

 

Adjusted Leverage Ratio*: In the range of 20-25% 19.7% 20.4% 19.5% 21.0% 19.7% 20.7% 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 *Adjusted Leverage ratio is computed as: Adjusted debt to Adjusted capitalization ex-AOCI. See appendix for information about this measure. 11

 

 

Appendix

 

Glossary of Non-U.S. GAAP Measures The Company defines these non-U.S. GAAP financial measures as follows: • Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that are outside of management’s control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non- recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The most comparable U.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively. • Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in Japan and foreign exchange rates are outside management’s control; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) into U.S. dollars. The most comparable U.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively. • Adjusted return on equity is annualized adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using annualized net earnings and average total shareholders’ equity. • Adjusted return on equity excluding foreign currency remeasurement is annualized adjusted earnings divided by average shareholders’ equity, excluding both accumulated other comprehensive income and the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The Company considers adjusted return on equity excluding foreign currency remeasurement important because it excludes both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/ losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measure for adjusted return on equity excluding foreign currency remeasurement is return on average equity as determined using annualized net earnings and average total shareholders’ equity.

 

Glossary of Non-U.S. GAAP Measures (cont’d) The Company defines these non-U.S. GAAP financial measures as follows: • Adjusted debt is the sum of notes payable, as recorded on the U.S. GAAP balance sheet, excluding 50% of subordinated debentures and perpetual bonds and all pre-funding of debt maturities. The Company considers adjusted debt important as it measures outstanding debt consistently with expectations of the Company’s rating agency stakeholders. The most comparable U.S. GAAP financial measure for adjusted debt is notes payable. • Adjusted debt including 50% of subordinated debentures and perpetual bonds is the sum of notes payable, as recorded on the U.S. GAAP balance sheet, excluding pre-funding of debt maturities. The Company considers adjusted debt including 50% of subordinated debentures and perpetual bonds important as it measures outstanding debt consistently with expectations of the Company’s rating agency stakeholders. The most comparable U.S. GAAP financial measure for adjusted debt including 50% of subordinated debentures and perpetual bonds is notes payable. • Adjusted book value is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude accumulated other comprehensive income, which fluctuates due to market movements that are outside management’s control. The most comparable U.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively. • Adjusted book value excluding foreign currency remeasurement is the U.S. GAAP book value (representing total shareholders’ equity), less accumulated other comprehensive income as recorded on the U.S. GAAP balance sheet and excluding the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. Adjusted book value excluding foreign currency remeasurement per common share is adjusted book value excluding foreign currency remeasurement at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share important as they exclude both accumulated other comprehensive income and the cumulative foreign currency remeasurement gains/losses, which fluctuate due to market movements that are outside management's control. The most comparable U.S. GAAP financial measures for adjusted book value excluding foreign currency remeasurement and adjusted book value excluding foreign currency remeasurement per common share are total book value and total book value per common share, respectively.

 

Reconciliation of Net Earnings Per Diluted Share to Adjusted Earnings per Diluted Share Three Months Ended March 31 2025 2024 %Change Net Earnings per diluted share $0.05 $3.25 (98.5)% Items impacting net earnings Adjusted net investment (gains) losses 1.69 (1.75) Other and non-recurring (income) loss 0.10 — Income tax (benefit) expense on items excluded from adjusted earnings (0.18) 0.15 Adjusted earnings per diluted share 1.66 1.66 —% Current period foreign currency impact1 0.01 N/A Adjusted earnings per diluted share excluding current period foreign currency impact2 $1.67 $1.66 0.6% 1Prior period foreign currency impact reflected as “N/A” to isolate change for current period only 2 Amounts excluding current period foreign currency impacts are computed using the average foreign currency exchange rate for the comparable prior year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes.

 

Reconciliation of Net Earnings to Adjusted Earnings1 Three Months Ended March 31, in millions of Dollars 2025 2024 %Change Net Earnings $29 $1,879 (98.5)% Items impacting net earnings Adjusted net investment (gains) losses 924 (1,009) Other and non-recurring (income) loss 53 2 Income tax (benefit) expense on items excluded from adjusted earnings (100) 89 Adjusted earnings 906 961 (5.7)% Current period foreign currency impact1 8 N/A Adjusted earnings excluding current period foreign currency impact2 $914 $961 (4.9)% 1Prior period foreign currency impact reflected as “N/A” to isolate change for current period only 2 Amounts excluding current period foreign currency impacts are computed using the average foreign currency exchange rate for the comparable prior year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes.

 

Reconciliation of U.S. GAAP Return on Equity to Adjusted ROE Three Months Ended March 31, in millions of Dollars 2025 2024 U.S. GAAP ROE - Net earnings1 0.4% 33.0% Impact of excluding unrealized foreign currency translation gains (losses) — (5.1) Impact of excluding unrealized gains (losses) on securities and derivatives — 1.3 Impact of excluding effect of changes in discount rate assumptions — (2.4) Impact of excluding pension liability adjustment — — Impact of excluding AOCI — (6.2) U.S. GAAP ROE - less AOCI 0.4 26.8 Differences between adjusted earnings and net earnings2 12.2 (13.1) Adjusted ROE - reported 12.7 13.7 Less: Impact of excluding gains (losses) associated with foreign currency remeasurement3 2.9% 2.5% Adjusted ROE, excluding impact of foreign currency remeasurement 15.6% 16.2% 1 U.S. GAAP ROE is calculated by dividing net earnings (annualized) by average shareholders’ equity 2 See separate reconciliation of net income to adjusted earnings 3 Impact of gains/losses associated with foreign currency remeasurement is calculated by restating excluding the cumulative [beginning January 1, 2021] foreign currency gains/losses associated with i) foreign currency remeasurement and ii) sales and redemptions of invested assets. The impact is the difference of adjusted return on equity - reported compared with adjusted return on equity, excluding from shareholders' equity, gains/losses associated with foreign currency remeasurement.

 

Reconciliation of U.S. GAAP Book Value per Share At March 31, in millions of Dollars 2025 2024 %Change U.S. GAAP book value per common share $48.55 $41.27 17.6% Less: Unrealized foreign currency translation gains (losses) per common share (8.39) (8.18) Unrealized gains (losses) on securities and derivatives per common share (2.31) 1.87 Effect of changes in discount rate assumptions per common share 7.19 (2.62) Pension liability adjustment per common share 0.08 (0.01) Total AOCI per common share (3.43) (8.95) Adjusted book value per common share $51.98 $50.22 3.5% Less: Foreign currency remeasurement gains (losses) per common share 9.37 8.54 Adjusted book value excluding foreign currency remeasurement per common share $42.61 $41.68 2.2%

 

Adjusted Leverage Ratios At March 31,In millions of Dollars 2025 2024 Notes Payable $7,751 $7,912 50% of subordinated debentures and perpetual bonds (299) (295) Pre-funding of debt maturities — (198) Adjusted debt1 7,453 7,420 Total Shareholders’ Equity 26,338 23,537 Accumulated other comprehensive (income)loss: Unrealized foreign currency translation (gains) losses 4,549 4,666 Unrealized (gains) losses on fixed maturity securities 1,233 (1,092) Unrealized (gains) losses on derivatives 18 26 Effect on change in discount rate assumptions (3,899) 1,495 Pension liability adjustment (42) 7 Adjusted book value1 28,197 28,639 Adjusted capitalization ex-AOCI 1,2 $35,948 $36,353 Adjusted debt to adjusted capitalization ex-AOCI 20.7% 20.4% 1 See non-U.S. GAAP financial measures for definition of: adjusted debt; adjusted book value; adjusted debt, including 50% of subordinated debentures and perpetual bonds; adjusted book value, including unrealized foreign currency translation gains and losses and pension liability adjustment 2 Adjusted capitalization ex-AOCI is the sum of adjusted debt, including 50% of subordinated debentures and perpetual bonds, plus adjusted book value