Financial Data and Key Metrics Changes - Aflac reported net earnings per diluted share of $1.11 and adjusted earnings per diluted share of $1.78 for Q2 2025, with adjusted earnings per diluted share decreasing by 2.7% year over year [4][14] - Adjusted book value per share excluding foreign currency remeasurement increased by 5.2% [14] - The adjusted return on equity (ROE) was 13.7% to 16.4%, excluding foreign currency remeasurement [14] Business Line Data and Key Metrics Changes - Aflac Japan experienced a 23.2% year-over-year sales increase, with a notable 53% increase in cancer insurance sales driven by the new product MiRyto [5][6] - Aflac US generated $340 million in new sales during Q2, reflecting a 2.7% year-over-year increase, with strong premium persistency of 79.2% and a 3.4% increase in net earned premium [7][8] - Aflac Japan's net earned premiums declined by 4.8%, while underlying earned premiums, excluding certain impacts, declined by 1.1% [15] Market Data and Key Metrics Changes - Aflac Japan's total benefit ratio was 66.5%, down 40 basis points year over year, while the third sector benefits ratio was 57.4%, also down approximately 40 basis points [16] - In the US, the total benefit ratio was 47.3%, which was 60 basis points higher than Q2 2024, driven by business mix [20] Company Strategy and Development Direction - The company is focusing on maintaining strong premium persistency and expanding its distribution channels in Japan, including agencies and banks, to meet changing customer needs [6][7] - Aflac aims to leverage its innovative products, such as MiRyto, to attract new and younger customers while maintaining a strong reputation for financial protection [5][13] - The company is committed to prudent liquidity and capital management, with a focus on tactical capital deployment to drive strong risk-adjusted returns [10][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for Aflac's products, emphasizing the importance of being a partner in health for policyholders [9][13] - The company anticipates a stronger second half of 2025, driven by fourth-quarter bookings and improved performance in various business segments [62][65] - Management acknowledged the competitive landscape in Japan, particularly in medical insurance, and plans to launch new products to enhance market position [82][86] Other Important Information - Aflac repurchased $829 million of its own stock and paid dividends of $312 million in Q2 2025, returning a total of $1.1 billion to shareholders [10][25] - The company celebrated several milestones, including the 30th anniversary of the Aflac Cancer and Blood Disorders Center and the 70th anniversary of its founding [11][12] Q&A Session Summary Question: Impact of new cancer product on sales - Management indicated that the new cancer product, MiRyto, has gained traction and is expected to continue driving strong sales performance [33][36] Question: Japan investment income and sustainability - Management noted that variable net investment income from alternatives contributed significantly to the improvement in Japan's investment income, with optimism for a solid second half [39][41] Question: Approach to capital deployment and M&A - Management emphasized a balanced approach to capital deployment, focusing on organic growth and shareholder returns, while remaining open to M&A opportunities [59][60] Question: U.S. sales performance and expectations - Management acknowledged the sluggish sales growth in the U.S. but expressed optimism for a stronger second half driven by improved recruitment and performance in specific segments [62][65] Question: Frequency of product refresh cycles - Management confirmed that the refresh cycle for cancer insurance is three years, while medical insurance is two years, contingent on regulatory approval [97]

Financial Performance - Net earnings per diluted share decreased by 642% from $310 in 2Q24 to $111 in 2Q25[9] - Adjusted earnings per diluted share decreased by 27% from $183 in 2Q24 to $178 in 2Q25[9] - Adjusted earnings per diluted share excluding foreign currency impact decreased by 55% from $183 in 2Q24 to $173 in 2Q25[9] - U S GAAP ROE decreased from 283% in 2Q24 to 90% in 2Q25[12] - Adjusted ROE decreased from 143% in 2Q24 to 137% in 2Q25[12] - Adjusted ROE excluding foreign currency remeasurement decreased from 175% in 2Q24 to 164% in 2Q25[12] Business Segment Performance - Aflac Japan's premium persistency remained relatively stable at 933% in 2Q24 and 937% in 2Q25[15] - Aflac Japan's QTD actual operating ratios for 2Q25 include a benefit ratio of 665%, an expense ratio of 206%, and a pretax profit margin of 320%[18] - Aflac U S's persistency remained relatively stable at 787% in 2Q24 and 792% in 2Q25[20] - Aflac U S's QTD actual operating ratios for 2Q25 include a benefit ratio of 473%, an expense ratio of 363%, and a pretax profit margin of 225%[22] Capital Management - The company's estimated regulatory ESR in Japan is >240% and the combined RBC ratio in the U S is >600% as of June 30, 2025[24] - The company's adjusted leverage ratio increased from 195% in 2Q24 to 225% in 2Q25[29]

Core Insights - Aflac reported revenue of $4.54 billion for the quarter ended June 2025, reflecting an 11.7% decrease year-over-year, but exceeded the Zacks Consensus Estimate by 2.3% [1] - Earnings per share (EPS) for the quarter was $1.78, down from $1.83 in the same quarter last year, surpassing the consensus EPS estimate of $1.71 by 4.09% [1] Financial Performance Metrics - Aflac Japan's Total Benefit/Premium was 66.5%, exceeding the average estimate of 65.3% [4] - Aflac U.S. Total Adjusted Expenses/Total Adjusted Revenue was 36.3%, better than the average estimate of 38.1% [4] - Aflac U.S. Total Adjusted Revenues were reported at $1.73 billion, slightly below the estimated $1.74 billion, but showed a year-over-year increase of 2.6% [4] - Aflac Japan's Total Adjusted Revenues were $2.47 billion, surpassing the estimate of $2.38 billion, with a year-over-year change of 1% [4] - Total net earned premiums for Aflac U.S. were $1.5 billion, compared to the estimate of $1.52 billion, reflecting a 3.4% increase year-over-year [4] - Other income for Aflac Japan was reported at $12 million, significantly higher than the estimated $6.67 million, marking a 71.4% year-over-year increase [4] - Net investment income was $1.08 billion, slightly below the estimate of $907.26 million, showing a 1.3% decrease year-over-year [4] - Total net earned premiums across the company were $3.47 billion, exceeding the estimate of $3.44 billion, with a year-over-year increase of 4.4% [4] - Corporate and other adjusted revenues were $336 million, surpassing the average estimate of $328.5 million, representing a 34.9% year-over-year change [4] Stock Performance - Aflac's shares have returned -4.2% over the past month, contrasting with a +1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Company Performance - Aflac reported quarterly earnings of $1.78 per share, exceeding the Zacks Consensus Estimate of $1.71 per share, but down from $1.83 per share a year ago, representing an earnings surprise of +4.09% [1] - The company posted revenues of $4.54 billion for the quarter, surpassing the Zacks Consensus Estimate by 2.30%, but down from $5.14 billion year-over-year [2] - Over the last four quarters, Aflac has surpassed consensus EPS estimates two times and topped revenue estimates just once [2] Future Outlook - The sustainability of Aflac's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.73 on revenues of $4.47 billion, and for the current fiscal year, it is $6.75 on revenues of $17.68 billion [7] Industry Context - The Insurance - Accident and Health industry, to which Aflac belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Aflac's performance [5][6]

[Aflac Incorporated](index=2&type=section&id=Aflac%20Incorporated) Aflac Incorporated's Q2 2025 results reflect a decline in net earnings driven by investment losses, alongside continued share repurchases and stable adjusted performance across its segments [Share Data](index=2&type=section&id=Share%20Data) The company continued its share repurchase program in Q2 2025, reducing shares outstanding to **534.8 million** from **542.5 million** at the quarter's start Share Repurchase Activity (Q2 2025) | Metric | Value (In Thousands) | | :--- | :--- | | Beginning Shares Outstanding | 542,493 | | Treasury Shares Purchased | 7,916 | | Ending Shares Outstanding | 534,809 | | QTD Weighted Avg. Diluted Shares | 538,425 | [Summary of Adjusted Results by Business Segment](index=3&type=section&id=Summary%20of%20Adjusted%20Results%20by%20Business%20Segment) Aflac Incorporated's Q2 2025 pretax adjusted earnings decreased **5.7%** to **$1,198 million**, primarily due to an **8.6%** decline in Aflac Japan, while net earnings fell **65.9%** to **$599 million** Pretax Adjusted Earnings by Segment (Q2, In Millions) | Segment | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Aflac Japan | $864 | $790 | (8.6)% | | Aflac U.S. | $383 | $388 | 1.3% | | **Total Pretax Adjusted Earnings** | **$1,270** | **$1,198** | **(5.7)%** | Consolidated Earnings Summary (Q2, In Millions, except per-share data) | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Adjusted Earnings | $1,035 | $957 | (7.5)% | | Net Earnings | $1,755 | $599 | (65.9)% | | Adjusted Earnings (diluted EPS) | $1.83 | $1.78 | (2.7)% | | Net Earnings (diluted EPS) | $3.10 | $1.11 | (64.2)% | [Statements of Earnings (U.S. GAAP)](index=4&type=section&id=Statements%20of%20Earnings%20(U.S.%20GAAP)) U.S. GAAP total revenues for Q2 2025 decreased **19.0%** to **$4,160 million** due to a swing to net investment losses, resulting in a **65.9%** drop in net earnings to **$599 million** Consolidated Earnings Highlights (Q2, In Millions) | Line Item | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Total Net Earned Premiums | $3,325 | $3,470 | 4.4% | | Net Investment Gains (Losses) | $696 | $(421) | N/A | | **Total Revenues** | **$5,138** | **$4,160** | **(19.0)%** | | Total Benefits and Expenses | $3,119 | $3,338 | 7.0% | | **Net Earnings** | **$1,755** | **$599** | **(65.9)%** | [Analysis of Net Earnings and Net Earnings Per Share](index=5&type=section&id=Analysis%20of%20Net%20Earnings%20and%20Net%20Earnings%20Per%20Share) Q2 2025 net earnings of **$599 million** were significantly impacted by **$(358) million** in after-tax net investment losses, partially offset by a **$23 million** positive foreign currency impact Net Earnings Analysis (Q2 2025, In Millions) | Item | Amount | | :--- | :--- | | Net Earnings | $599 | | Net Investment Gains (Losses) (net of tax) | $(358) | | Foreign Currency Impact | $23 | Net Earnings Per Diluted Share Analysis (Q2 2025) | Item | Amount per Share | | :--- | :--- | | Net Earnings Per Share | $1.11 | | Net Investment Gains (Losses) Per Share | $(0.66) | | Foreign Currency Impact Per Share | $0.04 | [Consolidated Balance Sheets](index=6&type=section&id=Balance%20Sheets) As of June 30, 2025, total assets increased to **$124.7 billion** from **$117.6 billion** at year-end 2024, with shareholders' equity rising to **$27.2 billion** Consolidated Balance Sheet Summary (In Millions) | Account | Dec 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Total Investments and Cash | $105,087 | $111,769 | | **Total Assets** | **$117,566** | **$124,736** | | Total Policy Liabilities | $77,508 | $78,904 | | Notes Payable | $7,498 | $8,933 | | **Total Liabilities** | **$91,468** | **$97,536** | | **Total Shareholders' Equity** | **$26,098** | **$27,200** | [Quarterly Financial Results](index=7&type=section&id=Quarterly%20Financial%20Results) Q2 2025 saw a **4.4%** increase in net earned premiums, but total revenues declined due to investment losses, leading to a **65.9%** drop in net earnings and a **2.7%** decrease in adjusted diluted EPS Quarterly Performance Comparison (Q2, In Millions) | Metric | Q2 2024 | Q2 2025 | | :--- | :--- | :--- | | Net Earned Premiums | $3,325 | $3,470 | | Net Investment Income | $1,095 | $1,081 | | Total Revenues | $5,138 | $4,160 | | Net Earnings | $1,755 | $599 | | Adjusted Earnings | $1,035 | $957 | [Quarterly Book Value Per Share](index=8&type=section&id=Quarterly%20Book%20Value%20Per%20Share) Book value per share increased **9.6%** to **$50.86** in Q2 2025, while adjusted book value per share (excluding AOCI) decreased **0.9%** to **$51.78** year-over-year Book Value Per Share Comparison (as of June 30) | Metric | 2024 | 2025 | % Change | | :--- | :--- | :--- | :--- | | Equity BV Per Share | $46.40 | $50.86 | 9.6% | | Adjusted BV Per Share | $52.26 | $51.78 | (0.9)% | | Adjusted BV Per Share Excl. Foreign Currency | $41.98 | $44.17 | 5.2% | [Return on Equity](index=9&type=section&id=Return%20on%20Equity) U.S. GAAP ROE significantly decreased to **9.0%** in Q2 2025 from **28.3%** in Q2 2024, while adjusted ROE remained more stable at **13.7%** Return on Equity (3 Months Ended June 30) | Metric | 2024 | 2025 | | :--- | :--- | :--- | | U.S. GAAP ROE - Net earnings | 28.3% | 9.0% | | Adjusted ROE - reported | 14.3% | 13.7% | | Adjusted ROE, excluding foreign currency | 17.5% | 16.4% | [Adjusted Earnings Per Share Excluding Current Period Foreign Currency Impact](index=10&type=section&id=Adjusted%20Earnings%20Per%20Share%20Excluding%20Current%20Period%20Foreign%20Currency%20Impact) Q2 2025 adjusted EPS decreased **2.7%** to **$1.78**, with a **$0.04** positive foreign currency impact, resulting in a **5.5%** decrease to **$1.73** excluding currency effects Adjusted EPS Reconciliation (Q2, Diluted Basis) | Metric | Q2 2024 | Q2 2025 | | :--- | :--- | :--- | | Adjusted EPS | $1.83 | $1.78 | | QTD Foreign Currency Impact | $(0.07) | $0.04 | | Adjusted EPS Excluding Foreign Currency | $1.89 | $1.73 | [Investment Results](index=11&type=section&id=Investment%20Results) As of June 30, 2025, the **$102.1 billion** investment portfolio was **85.7%** in fixed maturity securities, maintaining high credit quality with **98.4%** investment grade ratings Composition of Invested Assets (June 30, 2025, In Millions) | Asset Class | Amount | % of Total | | :--- | :--- | :--- | | Fixed Maturity Securities | $87,464 | 85.7% | | Commercial mortgage and other loans | $10,264 | 10.1% | | Equity Securities | $882 | 0.9% | | Alternatives | $3,464 | 3.4% | | **Total Portfolio** | **$102,074** | **100.0%** | - The credit quality of the fixed maturity portfolio remains high, with **98.4%** of assets rated investment grade (A, AA, AAA, or BBB) as of June 30, 2025[35](index=35&type=chunk) - For Q2 2025, Aflac Japan's new money yield was **5.26%**, while Aflac U.S. achieved a new money yield of **6.97%**[37](index=37&type=chunk) [Long-Term Debt Data](index=14&type=section&id=Long-Term%20Debt%20Data) As of June 30, 2025, total notes payable increased to **$8.9 billion**, raising the adjusted debt to adjusted capitalization ratio to **22.5%** from **19.5%** year-over-year Adjusted Leverage Ratios | Metric | June 30, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Notes Payable (in millions) | $7,430 | $8,933 | | Adjusted Debt (in millions) | $7,154 | $8,139 | | Adjusted debt to adjusted capitalization ex-AOCI | 19.5% | 22.5% | [Ratings](index=15&type=section&id=Ratings) Aflac and its subsidiaries maintain strong financial strength ratings, including 'A+' from AM Best and S&P, and 'Aa3' from Moody's, with a stable outlook across all ratings Selected Insurer Financial Strength Ratings | Company | AM Best | Moody's | S&P | | :--- | :--- | :--- | :--- | | Aflac of Columbus | A+ | Aa3 | A+ | | Aflac Life Insurance Japan Ltd. | A+ | Aa3 | A+ | - Aflac Incorporated's long-term senior debt is rated **'a' by AM Best**, **'A3' by Moody's**, and **'A-' by S&P**, with a stable outlook across all ratings[50](index=50&type=chunk) [Aflac U.S.](index=16&type=section&id=Aflac%20U.S.) Aflac U.S. segment reported a **1.3%** increase in pretax adjusted earnings to **$388 million** in Q2 2025, driven by growth in net earned premiums and sales [Statement of Pretax Adjusted Earnings](index=16&type=section&id=Aflac%20U.S.%3A%20Statement%20of%20Pretax%20Adjusted%20Earnings) Aflac U.S. pretax adjusted earnings increased **1.3%** to **$388 million** in Q2 2025, driven by a **3.4%** rise in total net earned premiums Aflac U.S. Pretax Adjusted Earnings (Q2, In Millions) | Line Item | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Total Net Earned Premiums | $1,455 | $1,504 | 3.4% | | Total Adjusted Revenues | $1,684 | $1,728 | 2.6% | | Total Benefits and Claims, Net | $680 | $712 | 4.7% | | Total Benefits and Adjusted Expenses | $1,301 | $1,340 | 3.0% | | **Pretax Adjusted Earnings** | **$383** | **$388** | **1.3%** | [Balance Sheets](index=17&type=section&id=Aflac%20U.S.%3A%20Balance%20Sheets) As of June 30, 2025, Aflac U.S. total assets slightly increased to **$22.0 billion**, with shareholders' equity growing to **$9.3 billion** from **$9.0 billion** at year-end 2024 Aflac U.S. Balance Sheet Summary (In Millions) | Account | Dec 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Investments and Cash | $16,775 | $16,864 | | **Total Assets** | **$21,930** | **$22,038** | | Future Policy Benefits | $10,584 | $10,712 | | **Shareholders' Equity** | **$9,043** | **$9,266** | [Quarterly Pretax Adjusted Earnings](index=18&type=section&id=Aflac%20U.S.%3A%20Quarterly%20Pretax%20Adjusted%20Earnings) Aflac U.S. pretax adjusted earnings grew **1.3%** in Q2 2025, supported by a **3.4%** increase in net earned premiums, outpacing total adjusted revenues growth Aflac U.S. Quarterly Performance (Q2) | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Net Earned Premiums | $1,455 | $1,504 | 3.4% | | Total Adjusted Revenues | $1,684 | $1,728 | 2.6% | | Pretax Adjusted Earnings | $383 | $388 | 1.3% | [Operating Ratios](index=19&type=section&id=Aflac%20U.S.%3A%20Operating%20Ratios) Aflac U.S. pretax profit margin was **22.5%** in Q2 2025, slightly down from **22.7%** in Q2 2024, with a **79.2%** 12-month rolling premium persistency rate Aflac U.S. Key Operating Ratios (Q2) | Ratio | Q2 2024 | Q2 2025 | | :--- | :--- | :--- | | 12-Mo. Rolling Premium Persistency | 78.7% | 79.2% | | Total Benefit/ Premium | 46.7% | 47.3% | | Pretax Profit Margin | 22.7% | 22.5% | [Sales](index=20&type=section&id=Aflac%20U.S.%3A%20Sales) Aflac U.S. new annualized premium sales increased **2.7%** to **$340 million** in Q2 2025, with Disability, Critical Care, and Accident leading the product mix Aflac U.S. Sales Performance (Q2, In Millions) | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | New Annualized Premiums Sales | $331 | $340 | 2.7% | | Annualized Premiums In Force | $6,239 | $6,506 | 4.3% | - In Q2 2025, the top three product categories by new sales were **Disability (27.7%)**, **Critical Care (21.8%)**, and **Accident (19.0%)**[63](index=63&type=chunk) - The total number of recruited agents (Career and Broker) was **3,421** in Q2 2025, compared to **3,535** in Q2 2024[65](index=65&type=chunk) [Aflac Japan](index=22&type=section&id=Aflac%20Japan) Aflac Japan's Q2 2025 pretax adjusted earnings decreased **15.0%** in yen terms, despite strong growth in new annualized premium sales, particularly in third sector products [Statement of Pretax Adjusted Earnings](index=22&type=section&id=Aflac%20Japan%3A%20Statement%20of%20Pretax%20Adjusted%20Earnings) Aflac Japan's pretax adjusted earnings decreased **15.0%** to **¥114.3 billion** in Q2 2025, driven by declines in net earned premiums and adjusted net investment income Aflac Japan Pretax Adjusted Earnings (Q2) | Currency | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Yen (Billions) | ¥134.5 | ¥114.3 | (15.0)% | | U.S. Dollars (Millions) | $864 | $790 | (8.6)% | - The decline in yen-denominated earnings was primarily due to a **4.8%** decrease in total net earned premiums and a **10.5%** decrease in adjusted net investment income[68](index=68&type=chunk) [Balance Sheets](index=24&type=section&id=Aflac%20Japan%3A%20Balance%20Sheets) As of June 30, 2025, Aflac Japan's total assets were **¥14.0 trillion** (**$96.6 billion**), with shareholders' equity at **¥2.8 trillion** (**$19.4 billion**) Aflac Japan Balance Sheet Summary (June 30, 2025) | Account | Yen (Millions) | U.S. Dollars (Millions) | | :--- | :--- | :--- | | Investments and Cash | ¥12,005,337 | $82,904 | | **Total Assets** | **¥13,987,461** | **$96,592** | | Future Policy Benefits | ¥8,913,737 | $61,555 | | **Shareholders' Equity** | **¥2,800,466** | **$19,366** | [Quarterly Pretax Adjusted Earnings](index=26&type=section&id=Aflac%20Japan%3A%20Quarterly%20Pretax%20Adjusted%20Earnings) Aflac Japan's pretax adjusted earnings fell **15.0%** to **¥114.3 billion** in Q2 2025, driven by a **6.2%** decline in total adjusted revenues Aflac Japan Quarterly Performance (Q2, In Billions of Yen) | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Net Earned Premiums | ¥267.3 | ¥254.6 | (4.8)% | | Total Adjusted Revenues | ¥381.2 | ¥357.5 | (6.2)% | | Pretax Adjusted Earnings | ¥134.5 | ¥114.3 | (15.0)% | [Operating Ratios](index=27&type=section&id=Aflac%20Japan%3A%20Operating%20Ratios) Aflac Japan's pretax profit margin decreased to **32.0%** in Q2 2025 from **35.3%** in Q2 2024, while premium persistency remained strong at **93.7%** Aflac Japan Key Operating Ratios (Q2) | Ratio | Q2 2024 | Q2 2025 | | :--- | :--- | :--- | | 12-Month Rolling Premium Persistency | 93.3% | 93.7% | | Total Benefit/ Premium (3rd sector) | 57.8% | 57.4% | | Pretax Profit Margin | 35.3% | 32.0% | [Sales](index=28&type=section&id=Aflac%20Japan%3A%20Sales) Aflac Japan's total new annualized premium sales grew **23.2%** to **¥20.7 billion** in Q2 2025, with third sector sales increasing **37.4%** and Cancer products dominating the mix Aflac Japan Sales Performance (Q2, In Billions of Yen) | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Third Sector New Annualized Premium Sales | ¥12.7 | ¥17.5 | 37.4% | | Total New Annualized Premium Sales | ¥16.8 | ¥20.7 | 23.2% | - Cancer products dominated the sales mix in Q2 2025, accounting for **73.0%** of total new annualized premium sales[85](index=85&type=chunk) - As of Q2 2025, sales contribution was led by **Affiliated Corporate agencies (50.4%)** and **Individual/Independent Corporate agencies (46.8%)**[87](index=87&type=chunk) [Yen/Dollar Exchange Rates](index=31&type=section&id=Yen%2FDollar%20Exchange%20Rates) The yen strengthened **2.7%** against the dollar in Q2 2025, with the average exchange rate at **144.60 yen per dollar** compared to **155.70** in Q2 2024 Yen/Dollar Exchange Rate | Metric | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Closing Rate | 161.07 | 144.81 | N/A | | Quarterly Average | 155.70 | 144.60 | 2.7% (Strengthening) | [Corporate and Other](index=32&type=section&id=Corporate%20and%20Other) The Corporate and Other segment reported a reduced pretax adjusted loss of **$20 million** in Q2 2025, driven by higher adjusted net investment income [Statement of Pretax Adjusted Earnings](index=32&type=section&id=Corporate%20and%20Other%3A%20Statement%20of%20Pretax%20Adjusted%20Earnings) The Corporate and Other segment reported a reduced pretax adjusted loss of **$20 million** in Q2 2025, primarily due to a **40.7%** increase in adjusted net investment income Corporate and Other Pretax Adjusted Earnings (Q2, In Millions) | Line Item | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Adjusted Net Investment Income | $91 | $128 | 40.7% | | Total Adjusted Revenues | $249 | $336 | 34.9% | | Total Benefits and Adjusted Expenses | $226 | $316 | 39.8% | | **Pretax Adjusted Earnings (Loss)** | **$(23)** | **$(20)** | **(13.0)%** | [Non-U.S. GAAP Financial Measures](index=33&type=section&id=Non-U.S.%20GAAP%20Financial%20Measures) This section defines key non-U.S. GAAP financial measures, such as adjusted earnings and adjusted book value, used to provide clearer insights into the company's underlying business performance [Definitions of Non-U.S. GAAP Measures](index=33&type=section&id=Definitions%20of%20Non-U.S.%20GAAP%20Measures) This section defines key non-U.S. GAAP measures like adjusted earnings, adjusted book value, and adjusted ROE, which are used to provide insights into underlying business performance by excluding volatile items - **Adjusted Earnings:** Excludes items that may obscure underlying fundamentals, such as adjusted net investment gains/losses and non-recurring items; management uses this to evaluate the financial performance of insurance operations[93](index=93&type=chunk)[100](index=100&type=chunk) - **Adjusted Book Value:** Represents total shareholders' equity less accumulated other comprehensive income (AOCI); this measure is used because AOCI fluctuates with market movements outside of management's control[95](index=95&type=chunk) - **Adjusted Return on Equity (ROE):** Calculated as annualized adjusted earnings divided by average shareholders' equity excluding AOCI; it is used to evaluate the financial performance and underlying profitability drivers of the insurance business[102](index=102&type=chunk)

Core Insights - Aflac Incorporated reported a significant decline in total revenues and net earnings for the second quarter of 2025 compared to the same period in 2024, primarily due to net investment losses [2][3][7] Financial Performance - Total revenues for Q2 2025 were $4.2 billion, down 19.0% from $5.1 billion in Q2 2024 [2][27] - Net earnings fell to $599 million, or $1.11 per diluted share, a decrease of 65.9% from $1.8 billion, or $3.10 per diluted share, a year earlier [2][27] - Adjusted earnings for Q2 2025 were $957 million, down 7.5% from $1.0 billion in Q2 2024 [4][32] Investment Performance - The company experienced net investment losses of $421 million in Q2 2025, compared to net investment gains of $696 million in Q2 2024 [3][37] - Adjusted net investment income for Q2 2025 was $1.036 billion, a slight increase of 0.3% from $1.033 billion in Q2 2024 [38] Shareholder Equity - Shareholders' equity increased to $27.2 billion, or $50.86 per share, at June 30, 2025, compared to $26.0 billion, or $46.40 per share, at June 30, 2024 [6][39] - The annualized return on average shareholders' equity for Q2 2025 was 9.0% [6][40] Segment Performance - Aflac Japan's net earned premiums in yen decreased by 4.8% to ¥254.6 billion in Q2 2025, primarily due to internal cancer reinsurance transactions [9][10] - In dollar terms, Aflac U.S. net earned premiums increased by 3.4% to $1.5 billion in Q2 2025, reflecting improved sales and persistency [14][15] Sales and Growth - Total new annualized premium sales in Aflac Japan increased by 23.2% to ¥20.7 billion, or $143 million, in Q2 2025 [13] - Aflac U.S. sales increased by 2.7% in Q2 2025 to $340 million, benefiting from group life and disability products [16] Capital Management - The board declared a third-quarter dividend of $0.58 per share, payable on September 2, 2025 [19] - Aflac repurchased $829 million in shares during Q2 2025, with 30.9 million shares remaining authorized for repurchase [19][23]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-07434 _____________________________________________Aflac Incorporated __________________________________________________________ ...

Core Viewpoint - Aflac Incorporated (AFL) is expected to report a decline in both earnings and revenues for the second quarter of 2025, with earnings estimated at $1.71 per share and revenues at $4.43 billion, reflecting year-over-year decreases [1][7]. Financial Estimates - The second-quarter earnings estimate has decreased by 2 cents over the past 60 days, indicating a year-over-year decline of 6.6% [2]. - The Zacks Consensus Estimate for total revenues in the second quarter suggests a year-over-year decrease of 13.7% [2]. - For the full year 2025, the revenue estimate is $17.68 billion, implying a 0.9% decline year over year, while the EPS estimate is $6.75, indicating a 6.4% year-over-year decline [3]. Earnings Performance - Aflac has beaten earnings estimates in two of the past four quarters and missed twice, with an average surprise of 9.3% [3]. - The current Earnings ESP is -1.25%, and the Zacks Rank is 2 (Buy), suggesting uncertainty regarding an earnings beat this quarter [4]. Factors Influencing Q2 Results - Expected premium growth may be offset by lower earnings from Japan and weaker investment income [7]. - The consensus estimate for total net earned premiums indicates a 3.4% year-over-year increase, while the Aflac U.S. unit is expected to see a 3.3% increase in adjusted revenues, contrasting with a 2.6% decline in the Aflac Japan unit [8]. - Net investment income is projected to decline by 17.2% year over year [9]. - The total benefit to premium ratio for Aflac U.S. is expected to rise to 47.8 from 46.7 a year ago, while Aflac Japan's ratio is expected to decrease to 65.3 from 66.9 [9]. - Pre-tax adjusted earnings from Aflac U.S. are estimated to fall by 8.1%, and Aflac Japan is likely to see a 13.2% decline [9][10]. Peer Performance - Marsh & McLennan reported adjusted earnings of $2.72 per share, surpassing estimates by 2.3% due to strong growth in Risk and Insurance Services [11]. - AON reported adjusted earnings of $3.49 per share, beating estimates by 2.7%, benefiting from new business growth and solid retention rates [12]. - AMERISAFE reported adjusted earnings of 53 cents per share, missing estimates by 3.6%, affected by a drop in net investment income and elevated expenses [13].

Core Viewpoint - Aflac Inc. is under investigation for potential breaches of fiduciary duty and corporate governance failures related to a recent cybersecurity breach that may have compromised sensitive personal data of customers and employees [1][2][3] Group 1: Cybersecurity Breach - On June 12, 2025, Aflac disclosed that unauthorized actors accessed its U.S. systems, potentially compromising personal data including Social Security numbers, health records, and insurance claim information [2] - The company is currently assessing the full scope of the data exposure resulting from the breach [2] Group 2: Investigation Details - Berger Montague is evaluating whether Aflac's officers and directors failed to implement adequate cybersecurity protocols and whether they provided timely and accurate disclosures regarding the breach [3] - The investigation will also consider if there was a breach of the duty of oversight by Aflac's leadership [3]

Group 1 - Aflac Incorporated will release its second quarter 2025 financial results on August 5, 2025, after market close [1] - A conference call to discuss the quarterly results is scheduled for August 6, 2025, at 8:00 a.m. (ET) [2] - Aflac is the leading provider of supplemental health insurance in the U.S. and cancer and medical insurance in Japan [3] Group 2 - Aflac has been recognized as one of the World's Most Ethical Companies for 19 consecutive years and has been included in Fortune's World's Most Admired Companies for 24 years [3] - The company became a signatory of the Principles for Responsible Investment (PRI) in 2021 and has been part of the Dow Jones Sustainability North America Index for 11 years [3] - Aflac has provided financial protection to millions of policyholders for nearly seven decades [3]