Financial Data and Key Metrics Changes - Aflac reported net earnings per diluted share of $0.05, significantly impacted by net investment losses compared to net investment gains in Q1 2024 [6] - Adjusted earnings per diluted share remained unchanged at $1.66 year-over-year [6][13] - Adjusted return on equity (ROE) was 12.7% excluding foreign currency remeasurement, indicating a solid performance [13] Business Line Data and Key Metrics Changes - Aflac Japan experienced a 12.6% year-over-year sales increase, driven by significant contributions from Sumitas and a 6.3% increase in cancer insurance sales [6][8] - Aflac US saw a 3.5% year-over-year increase in sales, with strong performance in group life, disability, and network dental [9][17] - Net earned premiums for Aflac Japan declined by 5%, while underlying earned premiums adjusted for deferred profit liability and other factors declined by 1.4% [14] Market Data and Key Metrics Changes - Aflac Japan's total benefit ratio was 65.8%, down 120 basis points year-over-year, while the U.S. total benefit ratio was 47.7%, up 120 basis points year-over-year [15][18] - Persistency in Japan improved to 93.8%, up 40 basis points year-over-year, while U.S. persistency increased to 79.3%, up 60 basis points year-over-year [16][17] Company Strategy and Development Direction - The company aims to appeal to younger customers through products like Sumitas and is focused on cross-selling medical and cancer policies [7][9] - Aflac continues to emphasize strong capital and cash flow management while maintaining a commitment to liquidity and capital ratios [10][11] - The company is strategically deploying capital, having repurchased $900 million in stock and paid $317 million in dividends in Q1 2025 [11][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying strengths of the business and potential for continued growth in both Japan and the U.S. [12] - The company is closely monitoring economic trends and adjusting its capital management strategies accordingly [38][41] - Management highlighted the importance of maintaining strong premium persistency and adapting to market conditions [10][11] Other Important Information - Aflac Japan launched a new cancer insurance product in March 2025, which is expected to contribute positively to sales [54] - The company has a robust hedging strategy in place to manage foreign currency exposure, particularly related to the yen [26][97] Q&A Session Summary Question: Why did the ESR ratio decline in Q1? - Management explained that the decline was due to the strengthening yen, partially offset by higher Japan interest rates and dividends flowing to Aflac Inc. [32][33] Question: How should we think about capital planning given recent macro changes? - Management indicated that capital management is designed with a long-term view and is not expected to change significantly despite macroeconomic volatility [37][41] Question: What are the expectations for the new cancer product sales? - Management expressed confidence that the new cancer product will continue to grow, with expectations for sales in 2025 to exceed those of 2024 [54][100] Question: How is the competitive landscape for medical insurance in Japan? - Management acknowledged increased competition but emphasized Aflac's pioneering position in cancer insurance and ongoing efforts to maintain market share [58][59] Question: How are remeasurement gains expected to trend? - Management noted that significant remeasurement gains are typically unlocked in the third quarter, with smaller adjustments in other quarters [63][66] Question: Is there any anti-U.S. sentiment affecting sales in Japan? - Management stated that there is no observable anti-American sentiment affecting the business, citing strong economic ties between the U.S. and Japan [116][117]

Financial Data and Key Metrics Changes - Aflac reported net earnings per diluted share of $0.05, significantly impacted by net investment losses compared to net investment gains in Q1 2024 [5] - Adjusted earnings per diluted share remained unchanged at $1.66 year over year [5][13] - Adjusted return on equity (ROE) was 12.7% excluding foreign currency remeasurement, indicating a solid performance [13] - Adjusted book value per share, excluding foreign currency remeasurement, increased by 2.2% [13] Business Line Data and Key Metrics Changes - Aflac Japan experienced a 12.6% year-over-year sales increase, driven by significant contributions from Sumitas and a 6.3% increase in cancer insurance sales [5][6] - Aflac US saw a 3.5% year-over-year increase in sales, with strong performance in group life, disability, and network dental [8] - Net earned premiums in Aflac Japan declined by 5%, while underlying earned premiums adjusted for deferred profit liability and reinsurance declined by 1.4% [14] - In the US, net earned premiums increased by 1.8%, with persistency rising by 60 basis points year over year to 79.3% [17] Market Data and Key Metrics Changes - Aflac Japan's total benefit ratio was 65.8%, down 120 basis points year over year, while the US total benefit ratio was 47.7%, up 120 basis points year over year [15][18] - Persistency in Japan remained solid at 93.8%, up 40 basis points year over year [16] - The expense ratio in Japan increased to 19.6%, primarily due to higher technology expenses, while the US expense ratio decreased to 37.6% [16][19] Company Strategy and Development Direction - Aflac aims to appeal to younger customers through products like Sumitas, which has been successful in reaching this demographic [6] - The company is focused on maintaining strong premium persistency and driving profitable growth through stronger underwriting discipline [8] - Aflac continues to leverage its strong capital and cash flows while maintaining prudent liquidity and capital management [10] - The company is committed to reinforcing its leading position in the life insurance markets of Japan and the US [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for Aflac's products, emphasizing the importance of being a partner in health for policyholders [9] - The company is optimistic about the growth potential in both Japan and the US, with plans to continue capital deployment and maintain a strong dividend track record [11][12] - Management acknowledged the challenges posed by macroeconomic factors but remains committed to long-term capital management strategies [36] Other Important Information - Aflac repurchased $900 million worth of its own stock and paid $317 million in dividends during Q1 2025 [23] - The company ended the quarter with strong capital ratios, including an estimated regulatory ESR above 250% [24] - Aflac Japan's cancer insurance sales are expected to grow, supported by the launch of a new cancer product in March 2025 [52] Q&A Session Summary Question: Why did the ESR ratio decline in Q1? - Management explained that the decline was due to the strengthening yen, partially offset by higher Japan interest rates and significant dividends flowing from Aflac Japan to Aflac Inc [32] Question: How should capital planning be approached given recent macro changes? - Management stated that capital management is designed with a long-term view, and they do not plan to change their approach significantly despite recent volatility [36] Question: What are the expectations for the new cancer product sales? - Management expressed confidence in the new cancer product's growth, anticipating continued sales increases throughout 2025 [52] Question: How is the competitive landscape for medical insurance in Japan? - Management acknowledged increased competition but emphasized Aflac's pioneering position and unique services that provide a competitive advantage [56] Question: How does the company view the impact of the yen on its operations? - Management noted that while a strengthening yen introduces volatility, it also leads to higher future dividends in dollar terms from Aflac Japan, which offsets some negative impacts [95]

Financial Performance - Aflac's U S GAAP ROE decreased significantly from 33% in 1Q24 to 04% in 1Q25[9, 33] - Adjusted earnings per diluted share remained consistent at $166 in both 1Q25 and 1Q24[31] - Adjusted earnings excluding current period foreign currency impact saw a slight increase of 06% from $166 in 1Q24 to $167 in 1Q25[31] - Adjusted earnings decreased by 57% from $961 million in 1Q24 to $906 million in 1Q25[32] - Adjusted earnings excluding current period foreign currency impact decreased by 49% from $961 million in 1Q24 to $914 million in 1Q25[32] Persistency and Operating Ratios - Aflac Japan maintained solid persistency with a rate of 938% in 1Q25[11] - Aflac U S also maintained solid persistency with a rate of 793% in 1Q25[16] - Aflac Japan's YTD actual benefit ratio was 658%, expense ratio was 196%, and pretax profit margin was 318%[14] - Aflac U S's YTD actual benefit ratio was 477%, expense ratio was 376%, and pretax profit ratio was 208%[18] Capital Management and Ratios - Aflac continued tactical capital deployment through dividends and share repurchases, with $317 million in dividends and repurchase in 1Q25[20] - The company maintains strong capital ratios, with an estimated regulatory ESR in Japan greater than 250% and a combined RBC ratio in the U S greater than 600%[22] - The adjusted leverage ratio was 207% in 1Q25[25]

Core Viewpoint - Aflac reported quarterly earnings of $1.66 per share, slightly missing the Zacks Consensus Estimate of $1.68 per share, indicating a -1.19% earnings surprise [1]. Financial Performance - Aflac's revenues for the quarter ended March 2025 were $4.32 billion, which was 1.26% below the Zacks Consensus Estimate and a decrease from $5.44 billion year-over-year [2]. - Over the last four quarters, Aflac has surpassed consensus EPS estimates two times and topped revenue estimates only once [2]. Stock Performance - Aflac shares have increased approximately 5% since the beginning of the year, contrasting with a -5.5% decline in the S&P 500 [3]. - The current Zacks Rank for Aflac is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.74 on revenues of $4.4 billion, while for the current fiscal year, the estimate is $6.84 on revenues of $17.62 billion [7]. - The trend of estimate revisions for Aflac is currently mixed, which may change following the recent earnings report [6]. Industry Context - The Insurance - Accident and Health industry, to which Aflac belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8].

Financial Performance - Aflac Japan reported adjusted earnings of $722 million for Q1 2025, a decrease of 10.9% compared to $810 million in Q1 2024[8]. - Aflac U.S. achieved adjusted earnings of $358 million in Q1 2025, reflecting a slight increase of 0.6% from $356 million in Q1 2024[8]. - The company's total pretax adjusted earnings for Q1 2025 were $1,123 million, down 3.4% from $1,163 million in Q1 2024[8]. - Net earnings for Q1 2025 were reported at $29 million, a significant decline of 98.5% compared to $1,879 million in Q1 2024[8]. - The diluted earnings per share for Q1 2025 were $0.05, a drastic drop from $3.25 in Q1 2024, indicating a 98.5% decrease[8]. - Total revenues for 2023 decreased to $18,701 million, a decline of 37.5% compared to 2022[11]. - Net earned premiums for 2023 were $14,123 million, down 2.2% from $14,901 million in 2022[11]. - Net investment income increased to $3,811 million in 2023, compared to $3,656 million in 2022, reflecting a growth of 4.3%[11]. - Net earnings for 2023 were $4,659 million, reflecting a slight increase from $4,418 million in 2022[11]. - The company expects net earnings to reach $5,443 million in 2024, representing a projected growth of 16.7%[11]. Investment and Assets - Aflac's investment results for Q1 2025 included adjusted net investment losses of $924 million, compared to gains of $1,009 million in Q1 2024[8]. - Total assets decreased from $165.086 billion in 2020 to $126.724 billion in 2023, representing a decline of approximately 23%[15]. - Total liabilities decreased from $131.527 billion in 2020 to $104.739 billion in 2023, a reduction of about 20%[15]. - Total invested assets as of March 31, 2023, amount to $104.742 billion, down from $111.219 billion in 2022[28]. - Fixed Maturity Securities decreased to $88.508 billion in 2023 from $94.525 billion in 2022[28]. - The total portfolio value is projected to be $100.091 billion in 2024, up from $94.887 billion in 2023[28]. Shareholder Metrics - Adjusted Book Value Per Share for 2023 is $47.55, reflecting a 10.1% increase from the previous year[20]. - Adjusted Earnings Per Share (EPS) for 2023 is $6.23, representing a 9.9% growth year-over-year, with an adjusted EPS excluding foreign currency impact of $6.43, a 13.4% increase[25]. - The projected net earnings per diluted share for 2024 is $9.63, up from $7.78 in 2023, indicating a growth of 23.7%[12]. - The company expects an adjusted EPS of $7.21 for 2024, indicating a 15.7% growth[25]. Operational Efficiency - Total acquisition and operating expenses for 2023 were $5,228 million, a decrease of 4.1% compared to $5,384 million in 2022[11]. - The company reported a net investment gain of $590 million in 2023, compared to a gain of $363 million in 2022[11]. - The combined ratio for 2023 was 77.3%, indicating a 22.7% pretax profit margin[60]. - The persistency ratio for 2023 was 78.6%, showing a slight decrease from 2022[60]. Future Projections - The company plans to maintain a focus on market expansion and new product development in the upcoming years[15]. - The company anticipates a return on equity of 22.6% for 2024[23]. - The company expects a further decrease in net earned premiums to $1,050 million in 2024, representing a 6.9% decline[78]. - The company anticipates total net earned premiums to increase to $680 million in 2024, representing a growth of 70% from 2023[90]. Market and Sales - New annualized premium sales in 2023 amounted to $1,558 million, representing a 5.0% increase year-over-year[63]. - The sales force in 2023 consisted of 11,566 recruited agents, with an average weekly productivity of 249,663[67]. - Aflac Japan's annualized premium sales for 2023 were ¥1,246.4 billion, down 4.2% from 2022[81]. - New annualized premium sales in Aflac Japan for 2023 increased by 8.8% to ¥52.234 billion[81]. Tax and Accounting Changes - Aflac's effective tax rate for Q1 2025 was 80.3%, compared to 13.4% in Q1 2024[8]. - The company adopted the LDTI accounting standard as of January 1, 2023, impacting the presentation of deferred profit liability[3].

Core Insights - Aflac Incorporated reported a significant decline in total revenues for Q1 2025, amounting to $3.4 billion, down from $5.4 billion in Q1 2024, primarily due to net investment losses of $963 million compared to net gains of $951 million in the previous year [1][20][27] - Net earnings for the first quarter were $29 million, or $0.05 per diluted share, a drastic decrease from $1.9 billion, or $3.25 per diluted share, in the same quarter last year [1][20][27] Financial Performance - Net investment losses in Q1 2025 were $963 million, driven by losses on derivatives and foreign currency activities, as well as a decrease in the fair value of equity securities [2][3] - Adjusted earnings for the quarter were $906 million, a decrease of 5.7% from $961 million in Q1 2024, with adjusted earnings per diluted share remaining flat at $1.66 [3][27] - Shareholders' equity increased to $26.3 billion, or $48.55 per share, compared to $23.5 billion, or $41.27 per share, a year earlier [5][21] Segment Performance - Aflac Japan's net earned premiums in yen decreased by 5.0% to ¥256.5 billion, while in dollar terms, net earned premiums fell by 7.4% to $1.7 billion [7][8] - Aflac U.S. saw a 1.8% increase in net earned premiums to $1.5 billion, with total adjusted revenues up 1.3% to $1.7 billion [10][11] Sales and New Products - Total new annualized premium sales in Japan increased by 12.6% to ¥14.1 billion, reflecting strong sales of new products [9] - In the U.S., sales increased by 3.5% to $309 million, driven by group product sales [11] Capital Management - The board declared a second-quarter dividend of $0.58 per share, with $900 million deployed for share repurchases in Q1 2025 [13][17] - The company maintained a strong focus on capital and cash flow generation while managing liquidity and capital effectively [17] Outlook and Strategy - The CEO expressed satisfaction with the adjusted earnings and premium persistency rates in both Japan and the U.S., emphasizing a focus on profitable growth and improved underwriting discipline [14][16]

Insurance provider Aflac Incorporated (AFL) is set to report its first-quarter 2025 results on April 30, 2025, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.68 per shareon revenues of $4.38 billion. (See the Zacks Earnings Calendar to stay ahead of market-making news.)The first-quarter earnings estimate declined by a penny over the past 60 days. The bottom-line projection indicates year-over-year growth of 1.2%. However, the Zacks Co ...

Industry Overview - The insurance industry is expected to benefit from rate increases, strong retention rates, new business growth, an active M&A strategy, and ongoing technological advancements in Q1 2025 [1] - However, interest rate cuts, an active catastrophe environment, and continued inflationary pressures may dampen overall growth prospects for insurers [1] Financial Performance Expectations - Total earnings for finance companies in Q1 2025 are anticipated to rise by 8.2% year-over-year, with revenues expected to improve by 3.3% [2] - Insurance companies are likely to see revenue growth driven by strong premiums from casualty insurance rate increases, exposure growth, and solid customer retention rates [3] Market Dynamics - U.S. commercial insurance rates experienced an overall decline in Q1 2025, primarily due to falling property insurance rates, while the casualty market saw strong price increases due to higher claim severity [4] - Lower interest rates are expected to pressure life insurers' investment returns but may encourage M&A financing, allowing insurers to diversify portfolios and enhance policy sales [5][6] Underwriting and Claims Environment - An active catastrophe environment poses challenges to insurers' underwriting performance, but such events typically lead to stronger policy renewal activity and prudent rate hikes [7] - The aging U.S. population is expected to maintain strong demand for life insurance and protection products, contributing to steady premium inflows [8] Specific Company Insights Allstate - Expected to see higher net premiums across most business lines, supported by rate increases, with a consensus estimate of $2.27 per share, indicating a 55.8% decline year-over-year [12][13] - Revenue consensus is pegged at $17.1 billion, implying 11% growth from the previous year [13] Aflac - Revenue growth is anticipated from U.S. operations, with a consensus estimate of $1.68 per share, indicating a 1.2% rise year-over-year, but revenues are expected to fall by 19.5% to $4.4 billion [14] - Challenges include a decline in sales of group voluntary benefit products and headwinds in the Japan segment [14] Prudential Financial - Expected to gain from higher fees and improved net investment spread, with a consensus estimate of $3.21 per share, indicating a 2.9% rise year-over-year, but revenues are expected to drop by 33% to $14.5 billion [15] - Growth supported by a diversified product portfolio in Japan and expanded channels in Brazil [15] MetLife - Anticipated to benefit from rising premiums across most segments, with a consensus estimate of $1.99 per share, indicating an 8.7% rise year-over-year, and revenues expected to grow by 7% to $18.2 billion [16] - Growth driven by strengthening operations in international markets, particularly Latin America [16]

Company Overview - Aflac (AFL) is expected to report quarterly earnings of $1.68 per share, reflecting a year-over-year increase of +1.2% [3] - Revenues are anticipated to be $4.38 billion, which represents a decline of 19.5% compared to the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for release on April 30, 2025, and could influence stock movement based on whether the results exceed or fall short of expectations [2] - The consensus EPS estimate has been revised 0.99% higher in the last 30 days, indicating a slight positive sentiment among analysts [4] Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that Aflac has a negative Earnings ESP of -0.65%, suggesting a bearish outlook from analysts [10][11] - Aflac currently holds a Zacks Rank of 3 (Hold), complicating predictions of an earnings beat [11] Historical Performance - In the last reported quarter, Aflac was expected to earn $1.62 per share but only achieved $1.56, resulting in a surprise of -3.70% [12] - Over the past four quarters, Aflac has beaten consensus EPS estimates three times [13] Industry Context - Another player in the insurance sector, Unum (UNM), is expected to report earnings of $2.19 per share, reflecting a year-over-year increase of +3.3% [17] - Unum's revenues are projected to be $3.33 billion, up 4.1% from the previous year [17] - Unum has a negative Earnings ESP of -0.58% and a Zacks Rank of 4 (Sell), indicating challenges in predicting an earnings beat [18]

Core Insights - The Aflac Wellness Matters Survey highlights that 90% of Americans delay preventive checkups or screenings, with younger generations particularly affected by various barriers [1][2][3] Group 1: Preventive Care Challenges - 94% of Americans face barriers to obtaining recommended screenings in a timely manner [2] - Common screenings avoided include pap smears (33%), prostate exams (32%), colonoscopies (32%), mammograms (31%), blood tests (31%), full body skin cancer exams (27%), and STD screenings (22%) [3] - Millennials (62%) and Gen Z (61%) are the most likely to avoid these screenings [3] Group 2: Attitudes Towards Health Care - 65% of Americans become proactive about their health only after experiencing a health scare [4] - Those who believe they will be diagnosed with cancer are more likely to delay screenings (62% vs. 42%) [4] Group 3: Primary Care Access - Nearly 20% of Americans lack a regular primary care physician, often citing good health as the reason [7] - 41% of Americans, particularly Gen Z (51%) and millennials (54%), primarily use urgent care or emergency rooms for medical needs [7] Group 4: Generational Differences - Younger generations are more likely to consult family and friends or social media for health concerns, with 68% interested in using AI for health issues [8][9] - Gen Z women (68%) are more likely to skip screenings compared to Gen Z men (55%) [10] Group 5: Influence of Community and Family - 70% of individuals confident in their loved ones' health priorities are more likely to prioritize their own health [12] - 24% of those diagnosed with cancer were urged by a loved one to get checked, indicating the importance of social support in health care decisions [13][14] Group 6: Aflac's Role and Commitment - Aflac emphasizes the importance of preventive care and the establishment of trusted relationships with primary care physicians [6][15] - The company has been recognized for its ethical practices and commitment to corporate social responsibility [17][18]