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]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Aflac's unaudited consolidated financial statements for Q2 2025, covering earnings, balance sheets, cash flows, and notes [Consolidated Statements of Earnings](index=3&type=section&id=Consolidated%20Statements%20of%20Earnings) Net earnings significantly decreased for both periods ended June 30, 2025, primarily due to net investment losses Metric (in millions) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $4,160 | $5,138 | $7,558 | $10,575 | | Total Benefits and Expenses | $3,338 | $3,119 | $6,591 | $6,385 | | Net Earnings | $599 | $1,755 | $628 | $3,634 | | Basic EPS | $1.12 | $3.11 | $1.16 | $6.38 | | Diluted EPS | $1.11 | $3.10 | $1.16 | $6.35 | | Cash Dividends per Share | $0.58 | $0.50 | $1.16 | $1.00 | - Net investment gains (losses) significantly impacted total revenues and net earnings, with a **loss of $(421) million** in Q2 2025 compared to a **gain of $696 million** in Q2 2024, and a **loss of $(1,384) million** in H1 2025 compared to a **gain of $1,647 million** in H1 2024[9](index=9&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Total comprehensive income (loss) decreased for both periods ended June 30, 2025, due to lower net earnings and unrealized losses Metric (in millions) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net Earnings | $599 | $1,755 | $628 | $3,634 | | Unrealized foreign currency translation gains (losses) | $179 | $(340) | $531 | $(838) | | Unrealized holding gains (losses) on fixed maturity securities | $(764) | $(829) | $(2,305) | $(727) | | Effect of changes in discount rate assumptions | $2,146 | $3,698 | $4,542 | $5,044 | | Total comprehensive income (loss) | $1,967 | $3,565 | $3,115 | $5,862 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets and shareholders' equity increased as of June 30, 2025, driven by investments and discount rate assumption changes Metric (in millions) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Total Investments and Cash | $111,769 | $105,087 | | Total Assets | $124,736 | $117,566 | | Total Liabilities | $97,536 | $91,468 | | Total Shareholders' Equity | $27,200 | $26,098 | | Unrealized foreign currency translation gains (losses) | $(4,282) | $(4,998) | | Unrealized gains (losses) on fixed maturity securities | $(1,828) | $24 | | Effect of changes in discount rate assumptions | $5,594 | $2,006 | [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Total shareholders' equity increased from December 31, 2024, to June 30, 2025, due to net earnings and discount rate changes Metric (in millions) | Metric (in millions) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :------------------- | :---------------------- | :----------------------- | | Total Shareholders' Equity | $26,098 | $27,200 | | Net Earnings | $29 (Q1) + $599 (Q2) | $628 | | Unrealized foreign currency translation gains (losses), net of tax | $449 (Q1) + $267 (Q2) | $716 | | Unrealized gains (losses) on fixed maturity securities, net of tax | $(1,257) (Q1) + $(595) (Q2) | $(1,852) | | Effect of changes in discount rate assumptions, net of tax | $1,893 (Q1) + $1,695 (Q2) | $3,588 | | Purchases of treasury stock | $(949) (Q1) + $(839) (Q2) | $(1,788) | | Dividends to shareholders | $2 (Q1) + $(312) (Q2) | $(310) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash and cash equivalents increased for the six months ended June 30, 2025, from operating and investing activities Cash Flow Activity (in millions) | Cash Flow Activity (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided (Used) by Operating Activities | $988 | $1,104 | | Net Cash Provided (Used) by Investing Activities | $1,174 | $2,294 | | Net Cash Provided (Used) by Financing Activities | $(1,423) | $(1,576) | | Net Change in Cash and Cash Equivalents | $736 | $1,754 | | Cash and Cash Equivalents, End of Period | $6,965 | $6,060 | - Operating cash flows decreased slightly in H1 2025 compared to H1 2024, while investing cash flows saw a more significant decrease[21](index=21&type=chunk) - Financing activities resulted in a net outflow, primarily due to treasury stock purchases and dividends paid[21](index=21&type=chunk) [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the consolidated financial statements, covering significant accounting policies and financial details [1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines Aflac's core business, U.S. GAAP basis, and significant accounting estimates, including recent pronouncements - Aflac Incorporated primarily sells supplemental health and life insurance in Japan and the United States, operating through two reportable segments: Aflac Japan and Aflac U.S.[24](index=24&type=chunk) - The financial statements are prepared in accordance with U.S. GAAP, requiring significant estimates for investment and derivative valuation, deferred policy acquisition costs (DAC), future policy benefits, and income taxes[26](index=26&type=chunk) - The Company adopted ASU 2023-07 (Segment Reporting) for interim periods beginning January 1, 2025, which did not impact financial position or results of operations but expanded disclosures[31](index=31&type=chunk) - Pending adoption are ASU 2024-03 (Disaggregation of Income Statement Expenses) and ASU 2023-09 (Improvements to Income Tax Disclosures), effective for annual periods after December 15, 2026, and December 15, 2024, respectively, with no expected impact on financial position or results of operations[33](index=33&type=chunk)[35](index=35&type=chunk) [2. BUSINESS SEGMENT INFORMATION](index=11&type=section&id=2.%20BUSINESS%20SEGMENT%20INFORMATION) This note details Aflac Japan, Aflac U.S., and Corporate and other segments, explaining performance evaluation and financial breakdowns - Aflac Japan accounted for **54% of total adjusted revenues** in Q2 and H1 2025, and **77% of total assets** at June 30, 2025, highlighting its significant contribution[39](index=39&type=chunk) Total Adjusted Revenues by Segment (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Aflac Japan | $2,472 | $2,447 | $4,744 | $4,919 | | Aflac U.S. | $1,728 | $1,684 | $3,449 | $3,384 | | Corporate and other | $336 | $249 | $662 | $497 | | **Total** | **$4,536** | **$4,380** | **$8,855** | **$8,800** | Pretax Adjusted Earnings by Segment (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Aflac Japan | $790 | $864 | $1,512 | $1,674 | | Aflac U.S. | $388 | $383 | $746 | $739 | | Corporate and other | $20 | $23 | $63 | $21 | | **Total** | **$1,198** | **$1,270** | **$2,321** | **$2,434** | Total Assets by Segment (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Aflac Japan | $96,592 | $90,210 | | Aflac U.S. | $22,038 | $21,930 | | Corporate and other | $6,106 | $5,426 | | **Total** | **$124,736** | **$117,566** | [3. INVESTMENTS](index=15&type=section&id=3.%20INVESTMENTS) This note details Aflac's investment portfolio, including fixed maturity and equity securities, loans, fair value, and credit quality Total Securities Available-for-Sale (in millions) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Amortized Cost | $70,030 | $64,089 | | Fair Value | $68,879 | $65,269 | | Gross Unrealized Gains | $4,072 | $5,308 | | Gross Unrealized Losses | $5,223 | $4,128 | Net Investment Gains (Losses) (in millions) | Category (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Sales and Redemptions | $(3) | $55 | $38 | $228 | | Equity Securities | $98 | $11 | $37 | $87 | | Credit Losses | $(58) | $(19) | $(113) | $(20) | | Derivatives and Other | $(452) | $649 | $(1,340) | $1,352 | | **Total Net Investment Gains (Losses)** | **$(421)** | **$696** | **$(1,384)** | **$1,647** | - Total commercial mortgage and other loans decreased from **$11,224 million** at December 31, 2024, to **$10,648 million** at June 30, 2025, with a corresponding increase in allowance for credit losses from **$(355) million** to **$(384) million**[70](index=70&type=chunk) - The allowance for credit losses for loans and securities increased from **$(375) million** at December 31, 2024, to **$(404) million** at June 30, 2025, reflecting additions to the allowance of **$(114) million** and write-offs of **$85 million** during the six-month period[100](index=100&type=chunk) - Total assets of consolidated Variable Interest Entities (VIEs) were **$14,147 million** at June 30, 2025, primarily consisting of fixed maturity securities and commercial mortgage and other loans[111](index=111&type=chunk) [4. DERIVATIVE INSTRUMENTS](index=34&type=section&id=4.%20DERIVATIVE%20INSTRUMENTS) This note details Aflac's use of derivatives for foreign currency and interest rate risk, including types, classification, and impact - The Company uses foreign currency forwards and options to hedge currency risk on U.S. dollar-denominated investments in Aflac Japan and to hedge the net investment in Aflac Japan[124](index=124&type=chunk)[125](index=125&type=chunk) - Interest rate swaps are used to economically hedge interest rate fluctuations in variable-rate investments, and interest rate swaptions are used to hedge changes in fair value due to interest rate fluctuations for U.S. dollar-denominated available-for-sale fixed-maturity securities[126](index=126&type=chunk)[129](index=129&type=chunk) Derivative Fair Value Amounts (in millions) | Category | Notional Amount (June 30, 2025) | Asset Fair Value (June 30, 2025) | Liability Fair Value (June 30, 2025) | | :----------------------- | :------------------------------ | :------------------------------- | :----------------------------------- | | Cash flow hedges | $18 | $0 | $4 | | Net investment hedge | $1,926 | $29 | $53 | | Non-qualifying strategies | $57,976 | $61 | $868 | | **Total Derivatives** | **$59,920** | **$90** | **$925** | - The Company's net investment hedge was effective during the three- and six-month periods ended June 30, 2025 and 2024[141](index=141&type=chunk) - As of June 30, 2025, all derivative agreement counterparties were investment grade, and the Company mitigates credit risk through collateral posting requirements[155](index=155&type=chunk)[156](index=156&type=chunk) [5. FAIR VALUE MEASUREMENTS](index=46&type=section&id=5.%20FAIR%20VALUE%20MEASUREMENTS) This note details fair value measurements for assets and liabilities, categorized by a three-level hierarchy and valuation techniques Fair Value Hierarchy of Assets (in millions) at June 30, 2025 | Asset Category | Level 1 (Quoted Prices) | Level 2 (Observable Inputs) | Level 3 (Unobservable Inputs) | Total Fair Value | | :----------------------------- | :---------------------- | :-------------------------- | :---------------------------- | :--------------- | | Fixed maturity securities | $16,975 | $48,995 | $2,909 | $68,879 | | Equity securities | $715 | $0 | $167 | $882 | | Other investments | $2,375 | $0 | $0 | $2,375 | | Cash and cash equivalents | $6,965 | $0 | $0 | $6,965 | | Other assets (Derivatives) | $0 | $90 | $0 | $90 | | **Total Assets** | **$27,030** | **$49,085** | **$3,076** | **$79,191** | Fair Value Hierarchy of Liabilities (in millions) at June 30, 2025 | Liability Category | Level 1 (Quoted Prices) | Level 2 (Observable Inputs) | Level 3 (Unobservable Inputs) | Total Fair Value | | :----------------------------- | :---------------------- | :-------------------------- | :---------------------------- | :--------------- | | Other liabilities (Derivatives) | $0 | $925 | $0 | $925 | | **Total Liabilities** | **$0** | **$925** | **$0** | **$925** | - Commercial mortgage and other loans, and other policyholders' funds (annuities) are primarily classified as Level 3 due to the use of significant unobservable inputs like credit spreads and cash surrender values[194](index=194&type=chunk)[196](index=196&type=chunk) - The total fair value of Level 3 assets increased from **$2,224 million** at December 31, 2024, to **$3,076 million** at June 30, 2025, primarily due to purchases and transfers into Level 3[200](index=200&type=chunk)[201](index=201&type=chunk) [6. DEFERRED POLICY ACQUISITION COSTS](index=59&type=section&id=6.%20DEFERRED%20POLICY%20ACQUISITION%20COSTS) This note provides a rollforward of deferred policy acquisition costs (DAC) by segment and product, detailing capitalization and amortization Deferred Policy Acquisition Costs (DAC) by Segment (in millions) | Segment | Balance at Dec 31, 2024 | Capitalization (H1 2025) | Amortization (H1 2025) | Foreign Currency Translation and Other (H1 2025) | Balance at June 30, 2025 | | :---------- | :---------------------- | :----------------------- | :--------------------- | :----------------------------------------------- | :----------------------- | | Aflac Japan | $5,102 | $248 | $(224) | $472 | $5,614 | | Aflac U.S. | $3,656 | $273 | $(273) | $0 | $3,682 | | **Total** | **$8,758** | **$503** | **$(437)** | **$472** | **$9,296** | - Aflac Japan's DAC increased by **10.0%** (0.7% in yen terms) during the six months ended June 30, 2025, primarily due to foreign currency translation gains[212](index=212&type=chunk)[465](index=465&type=chunk) - Amortization of DAC for the six months ended June 30, 2025, was **$437 million**, with no changes to inputs, judgments, assumptions, or methods used to determine amortization amounts[212](index=212&type=chunk)[214](index=214&type=chunk) [7. POLICY LIABILITIES](index=60&type=section&id=7.%20POLICY%20LIABILITIES) This note details policy liabilities, including future policy benefits and other policyholders' funds, with interest rates and durations Net Liability for Future Policy Benefits After Reinsurance Recoverable (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :---------------- | | Aflac Japan | $51,800 | $51,540 | | Aflac U.S. | $10,166 | $10,039 | | Corporate and other | $5,106 | $5,072 | | **Total** | **$67,072** | **$66,651** | Weighted-Average Interest Rates and Liability Duration for Aflac Japan (June 30, 2025) | Product Type | Original Discount Rate | Current Discount Rate | Liability Duration (years) | | :-------------------- | :--------------------- | :-------------------- | :------------------------- | | Cancer | 3.8% | 2.8% | 12.6 | | Medical and other health | 2.5% | 3.4% | 23.0 | | Life insurance | 2.1% | 2.6% | 16.2 | | Other | 1.8% | 3.1% | 16.4 | - Discount rates are determined using upper-medium grade fixed-income instrument yields reflecting liability duration characteristics, with specific methodologies for Japan (yen-denominated) and U.S. (U.S. dollar-denominated) policies, including extrapolation for longer tenors[225](index=225&type=chunk)[227](index=227&type=chunk)[229](index=229&type=chunk) - Other policyholders' funds, primarily Aflac Japan's fixed annuities, increased from **$5,460 million** at December 31, 2024, to **$6,002 million** at June 30, 2025, with a weighted-average crediting rate of **1.5%**[244](index=244&type=chunk)[245](index=245&type=chunk) [8. REINSURANCE](index=70&type=section&id=8.%20REINSURANCE) This note details reinsurance activities, including quota-share agreements, reconciliation of premiums and benefits, and recoverables Net Earned Premiums and Benefits and Claims (in millions) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Direct Earned Premiums | $3,525 | $3,352 | $6,958 | $6,834 | | Ceded Earned Premiums | $(91) | $(66) | $(179) | $(135) | | Assumed Earned Premiums | $36 | $39 | $72 | $82 | | **Net Earned Premiums** | **$3,470** | **$3,325** | **$6,851** | **$6,781** | | Direct Benefits and Claims | $2,097 | $1,995 | $4,128 | $4,077 | | Ceded Benefits and Claims | $(64) | $(36) | $(120) | $(68) | | Assumed Benefits and Claims | $14 | $13 | $25 | $30 | | **Net Benefits and Claims** | **$2,047** | **$1,972** | **$4,033** | **$4,039** | - The Company recorded a deferred reinsurance gain liability of **$154 million** at June 30, 2025, and a reinsurance recoverable of **$166 million** (net of $4 million allowance for credit losses), with significant reinsurance counterparties rated A+[249](index=249&type=chunk)[250](index=250&type=chunk) - Aflac Re, a Bermuda-domiciled insurer, reinsures certain policies issued by ALIJ, with inter-segment amounts eliminated in consolidation[251](index=251&type=chunk) [9. NOTES PAYABLE AND LEASE OBLIGATIONS](index=71&type=section&id=9.%20NOTES%20PAYABLE%20AND%20LEASE%20OBLIGATIONS) This note summarizes notes payable and lease obligations, including recent debt issuances, credit facilities, and covenant compliance Notes Payable and Lease Obligations (in millions) | Category | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | U.S. dollar-denominated senior notes | $2,605 | $2,605 | | Yen-denominated senior notes and subordinated debentures | $4,090 | $2,990 | | Yen-denominated loans | $787 | $675 | | Finance lease obligations | $5 | $5 | | Operating lease obligations | $91 | $91 | | **Total Notes Payable and Lease Obligations** | **$8,933** | **$7,498** | - In June 2025, the Parent Company issued four series of senior notes totaling **¥74.9 billion** (approx. **$518 million** at current exchange rates) through a public debt offering, with maturities ranging from October 2030 to June 2040[254](index=254&type=chunk) - In May 2025, the Parent Company issued four series of senior notes totaling **¥75.1 billion** (approx. **$519 million** at current exchange rates) through a private placement, with maturities ranging from May 2032 to May 2045[255](index=255&type=chunk) - Interest expense related to notes payable was **$51 million** for Q2 2025 and **$100 million** for H1 2025[256](index=256&type=chunk) - The Company maintains various uncommitted and unsecured revolving credit facilities, totaling over **$1.8 billion** and **¥200 billion** in capacity, with no outstanding borrowings as of June 30, 2025[258](index=258&type=chunk)[259](index=259&type=chunk) [10. SHAREHOLDERS' EQUITY](index=76&type=section&id=10.%20SHAREHOLDERS'%20EQUITY) This note reconciles common stock and treasury stock, details share repurchases, EPS calculation, and AOCI components and reclassifications Common Stock and Treasury Stock Activity (in thousands of shares) | Category | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Common stock - issued, end of period | 1,357,790 | 1,356,618 | | Treasury stock, end of period | 822,981 | 795,249 | | Shares outstanding, end of period | 534,809 | 561,369 | - The Company repurchased **16.4 million shares** for **$1.7 billion** in H1 2025, with **30.9 million shares** remaining authorized for repurchase as of June 30, 2025[262](index=262&type=chunk) Changes in Accumulated Other Comprehensive Income (in millions, net of tax) | Component | Balance at Dec 31, 2024 | H1 2025 Change (before reclassification) | H1 2025 Reclassifications | Balance at June 30, 2025 | | :-------------------------------------- | :---------------------- | :--------------------------------------- | :------------------------ | :----------------------- | | Unrealized foreign currency translation gains (losses) | $(4,998) | $716 | $0 | $(4,282) | | Unrealized gains (losses) on fixed maturity securities | $24 | $(1,831) | $(21) | $(1,828) | | Unrealized gains (losses) on derivatives | $(20) | $1 | $2 | $(17) | | Effect of changes in discount rate assumptions | $2,006 | $3,588 | $0 | $5,594 | | Pension liability adjustment | $10 | $32 | $0 | $42 | | **Total** | **$(2,978)** | **$2,506** | **$(19)** | **$(491)** | - Reclassifications from AOCI into net earnings for H1 2025 included **$21 million** (net of tax) from unrealized gains/losses on available-for-sale securities and **$(2) million** (net of tax) from unrealized gains/losses on derivatives[277](index=277&type=chunk) [11. SHARE-BASED COMPENSATION](index=80&type=section&id=11.%20SHARE-BASED%20COMPENSATION) This note describes the Long-Term Incentive Plan, stock options, restricted stock activity, and unrecognized compensation costs - As of June 30, 2025, **32.6 million shares** were available for future grants under the Plan[281](index=281&type=chunk) Stock Options Outstanding and Exercisable (June 30, 2025) | Category | Stock Option Shares (in thousands) | Weighted-Average Remaining Term (in years) | Intrinsic Value (in millions) | Weighted-Average Exercise Price Per Share | | :---------- | :--------------------------------- | :----------------------------------------- | :---------------------------- | :---------------------------------------- | | Outstanding | 447 | 1.5 | $31 | $34.98 | | Exercisable | 447 | 1.5 | $31 | $34.98 | - Total unrecognized compensation cost related to restricted stock awards and units was **$44 million** as of June 30, 2025, expected to be recognized over approximately **1.8 years**[286](index=286&type=chunk) Restricted Stock Activity (6 Months Ended June 30, 2025) | Activity | Shares (in thousands) | Weighted-Average Grant-Date Fair Value Per Share | | :------------------------ | :-------------------- | :----------------------------------------------- | | Restricted stock at Dec 31, 2024 | 2,099 | $73.65 | | Granted in 2025 | 1,098 | $104.46 | | Vested in 2025 | (1,270) | $68.65 | | Restricted stock at June 30, 2025 | 1,857 | $85.81 | [12. BENEFIT PLANS](index=83&type=section&id=12.%20BENEFIT%20PLANS) This note covers funded defined benefit plans, non-qualified retirement plans, and postretirement benefits, including the U.S. pension plan settlement - In January 2025, the Company settled its obligations under the U.S. defined pension plan by purchasing a nonparticipating single premium group annuity contract, resulting in a settlement charge of **$55 million** in Q1 2025[291](index=291&type=chunk) Components of Net Periodic Benefit Cost (in millions) | Component (in millions) | Japan Pension Benefits (H1 2025) | U.S. Pension Benefits (H1 2025) | Other Postretirement Benefits (H1 2025) | | :---------------------- | :------------------------------- | :------------------------------ | :-------------------------------------- | | Service cost | $6 | $0 | $0 | | Interest cost | $4 | $10 | $0 | | Expected return on plan assets | $(4) | $(5) | $0 | | Settlement (gain) loss | $0 | $55 | $0 | | **Net periodic benefit cost (credit)** | **$6** | **$59** | **$1** | [13. COMMITMENTS AND CONTINGENT LIABILITIES](index=84&type=section&id=13.%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) This note addresses commitments, contingent liabilities, and a cybersecurity incident identified in June 2025, detailing its potential impacts - On June 12, 2025, the Company identified a cybersecurity incident involving unauthorized access to its U.S. network, leading to the exfiltration of certain data including claims, health, social security numbers, and other personal information[297](index=297&type=chunk)[320](index=320&type=chunk) - The Company believes the intrusion was contained within hours and its business remains operational, but the full financial impact, including potential litigation, regulatory actions, and reputational harm, is not yet reasonably estimable[297](index=297&type=chunk)[298](index=298&type=chunk)[321](index=321&type=chunk) - The Company renewed two outsourcing agreements for Aflac Japan's IT services in May and February 2025, with aggregate remaining costs of **$75 million** and **$65 million**, respectively[299](index=299&type=chunk)[300](index=300&type=chunk) - Guaranty fund assessments for both U.S. and Japan were immaterial for the three- and six-month periods ended June 30, 2025 and 2024[303](index=303&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=85&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(MD%26A)) This section provides management's perspective on Aflac's financial condition and results for H1 2025, covering operations, investments, liquidity, and estimates [FORWARD-LOOKING INFORMATION](index=85&type=section&id=FORWARD-LOOKING%20INFORMATION) This section provides cautionary statements regarding forward-looking information, identifying factors that could cause actual results to differ materially - Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, and the Company undertakes no obligation to update them[304](index=304&type=chunk) - Key risk factors include difficult global capital markets, investment defaults, interest rate fluctuations, concentration of business in Japan, foreign currency fluctuations, and the impact of the June 2025 cybersecurity incident[305](index=305&type=chunk) [MD&A OVERVIEW](index=86&type=section&id=MD%26A%20OVERVIEW) This section introduces the MD&A, explaining its purpose to inform readers about factors affecting financial condition and results of operations - The MD&A should be read in conjunction with the consolidated financial statements and notes from the 2024 Annual Report, as interim results are not necessarily indicative of full-year results[307](index=307&type=chunk) [EXECUTIVE SUMMARY](index=87&type=section&id=EXECUTIVE%20SUMMARY) This summary overviews Aflac's business, Q2 and H1 2025 performance, and the cybersecurity incident, noting declines in net earnings - Total revenues decreased to **$4.2 billion** in Q2 2025 (from $5.1 billion in Q2 2024) and **$7.6 billion** in H1 2025 (from $10.6 billion in H1 2024), primarily due to net investment losses[311](index=311&type=chunk)[312](index=312&type=chunk) - Net earnings significantly decreased to **$599 million** in Q2 2025 (from $1.8 billion in Q2 2024) and **$628 million** in H1 2025 (from $3.6 billion in H1 2024)[311](index=311&type=chunk)[312](index=312&type=chunk) - Adjusted earnings were **$957 million** (**$1.78 per diluted share**) in Q2 2025 and **$1.9 billion** (**$3.43 per diluted share**) in H1 2025, with a stronger yen/dollar exchange rate positively impacting EPS by **$0.04** and **$0.03**, respectively[315](index=315&type=chunk) - Shareholders' equity increased to **$27.2 billion** (**$50.86 per share**) at June 30, 2025, from **$26.1 billion** (**$47.45 per share**) at December 31, 2024, largely due to changes in discount rate assumptions[316](index=316&type=chunk) - A cybersecurity incident in June 2025 involved unauthorized access and data exfiltration, but the Company's business remains operational, and the financial impact is not yet deemed material[319](index=319&type=chunk)[320](index=320&type=chunk)[321](index=321&type=chunk) [RESULTS OF OPERATIONS](index=88&type=section&id=RESULTS%20OF%20OPERATIONS) This section details overall operating performance, revenue sources, expenses, non-U.S. GAAP measures, and the impact of foreign currency and taxes - Profitability depends on pricing insurance products to cover benefits and administration costs, actuarial experience, investment results, capital deployment, and expense management[323](index=323&type=chunk) - Fluctuations in the yen/dollar exchange rate significantly affect reported results, with yen strengthening magnifying dollar-denominated results[325](index=325&type=chunk)[327](index=327&type=chunk) Reconciliation of Net Earnings to Adjusted Earnings (in millions) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net Earnings | $599 | $1,755 | $628 | $3,634 | | Adjusted net investment (gains) losses | $377 | $(749) | $1,301 | $(1,758) | | Other and non-recurring (income) loss | $0 | $0 | $53 | $2 | | Income tax (benefit) expense on items excluded | $(19) | $29 | $(119) | $118 | | **Adjusted Earnings** | **$957** | **$1,035** | **$1,863** | **$1,996** | - The combined U.S. and Japanese effective income tax rate on pretax earnings was **27.0%** for Q2 2025 (vs. 13.1% in Q2 2024) and **35.0%** for H1 2025 (vs. 13.3% in H1 2024), differing from the U.S. statutory rate due to foreign currency translation and tax credits[347](index=347&type=chunk) Reconciliation of Book Value to Adjusted Book Value (in millions) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | U.S. GAAP book value | $27,200 | $26,098 | | Total accumulated other comprehensive income | $(491) | $(2,978) | | Adjusted book value | $27,691 | $29,076 | | Foreign currency remeasurement gains (losses) | $4,069 | $5,725 | | Adjusted book value excluding foreign currency remeasurement | $23,622 | $23,351 | [RESULTS OF OPERATIONS BY SEGMENT](index=97&type=section&id=RESULTS%20OF%20OPERATIONS%20BY%20SEGMENT) This section analyzes operating results for Aflac Japan, Aflac U.S., and Corporate and other, covering earnings, sales, and investment yields Aflac Japan Summary of Operating Results (in millions of dollars) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net earned premiums | $1,761 | $1,715 | $3,442 | $3,531 | | Adjusted net investment income | $699 | $725 | $1,285 | $1,374 | | Total adjusted revenues | $2,472 | $2,447 | $4,744 | $4,919 | | Pretax adjusted earnings | $790 | $864 | $1,512 | $1,674 | | Weighted-average yen/dollar exchange rate | 144.60 | 155.70 | 148.32 | 152.30 | - Aflac Japan's pretax adjusted earnings decreased by **15.0%** in yen terms for Q2 2025 and **12.1%** for H1 2025, primarily due to lower adjusted net investment income and net earned premiums, partially offset by lower benefits[362](index=362&type=chunk)[363](index=363&type=chunk)[366](index=366&type=chunk) - Aflac Japan's new annualized premium sales increased by **23.2%** in yen terms for Q2 2025 and **18.7%** for H1 2025, driven by strong sales of the new cancer insurance product, Miraito, and Tsumitasu[374](index=374&type=chunk)[377](index=377&type=chunk) Aflac U.S. Summary of Operating Results (in millions) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net earned premiums | $1,504 | $1,455 | $3,006 | $2,930 | | Adjusted net investment income | $207 | $218 | $409 | $424 | | Total adjusted revenues | $1,728 | $1,684 | $3,449 | $3,384 | | Pretax adjusted earnings | $388 | $383 | $746 | $739 | - Aflac U.S. pretax adjusted earnings increased by **1.3%** for Q2 2025 and **0.9%** for H1 2025, driven by higher net earned premiums from growth initiatives, partially offset by lower floating rate income and higher incurred claims[392](index=392&type=chunk)[393](index=393&type=chunk)[396](index=396&type=chunk) - Aflac U.S. new annualized premium sales increased by **2.7%** for Q2 2025 and **3.1%** for H1 2025, primarily driven by sales of group products[401](index=401&type=chunk) Corporate and Other Summary of Operating Results (in millions) | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net earned premiums | $206 | $155 | $404 | $320 | | Adjusted net investment income | $128 | $91 | $254 | $169 | | Total adjusted revenues | $336 | $249 | $662 | $497 | | Pretax adjusted earnings | $20 | $23 | $63 | $21 | - Corporate and other pretax adjusted earnings decreased by **13.0%** for Q2 2025 but increased by **200.0%** for H1 2025, influenced by internal reinsurance activity, lower federal historic rehabilitation and solar tax credit investments, and higher business operation costs including cybersecurity incident response[411](index=411&type=chunk)[413](index=413&type=chunk)[414](index=414&type=chunk) [INVESTMENTS](index=109&type=section&id=INVESTMENTS) This section elaborates on Aflac's investment strategy, portfolio composition by segment, credit rating, and the impact of real estate conditions - The Company's investment strategy aims for long-term risk-adjusted returns, stable income, and shareholder value, with diversified portfolios in yen and U.S. dollar-denominated assets[416](index=416&type=chunk) Total Investments and Cash by Segment (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | Aflac Japan | $82,904 | $77,233 | | Aflac U.S. | $16,864 | $16,775 | | Corporate and Other | $12,001 | $11,079 | | **Total** | **$111,769** | **$105,087** | - Commercial real estate market conditions have affected TREs and CMLs, with **$257 million** in TREs undergoing foreclosure or deed in lieu of foreclosure in H1 2025, resulting in a net loss of **$10 million**[423](index=423&type=chunk)[424](index=424&type=chunk) Composition of Fixed Maturity Securities by Credit Rating | Credit Rating | June 30, 2025 (Amortized Cost) | June 30, 2025 (Fair Value) | Dec 31, 2024 (Amortized Cost) | Dec 31, 2024 (Fair Value) | | :------------ | :----------------------------- | :------------------------- | :---------------------------- | :------------------------ | | AAA | 1.4% | 1.4% | 1.5% | 1.5% | | AA | 6.3% | 6.6% | 6.0% | 6.3% | | A | 68.5% | 66.7% | 68.0% | 66.1% | | BBB | 22.2% | 23.5% | 22.9% | 24.4% | | BB or lower | 1.6% | 1.8% | 1.6% | 1.7% | | **Total** | **100.0%** | **100.0%** | **100.0%** | **100.0%** | - The Company's below-investment-grade exposure totaled **$5,392 million** (amortized cost) at June 30, 2025, including high-yield corporate bonds and middle market loans, aimed at enhancing yield and diversifying credit risk[432](index=432&type=chunk)[434](index=434&type=chunk)[435](index=435&type=chunk) [HEDGING ACTIVITIES](index=115&type=section&id=HEDGING%20ACTIVITIES) This section describes strategies for managing foreign currency and interest rate risks using derivatives, including Aflac Japan's hedge program - Aflac Japan uses foreign currency forwards and options to hedge U.S. dollar-denominated investments back to yen, economically creating yen assets and supporting Japan's solvency margin ratio (SMR)[450](index=450&type=chunk)[451](index=451&type=chunk) Foreign Currency Exchange Rate Risk Hedge Program Metrics (in billions of dollars) | Program/Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Aflac Japan FX option notional | $25.0 | $24.7 | $25.0 | $24.7 | | Corporate FX forward notional | $1.9 | $2.0 | $1.9 | $2.0 | | Corporate amortized hedge income (cost) | $30 | $34 | $60 | $62 | - The Parent Company's net investment in Aflac Japan was partially hedged at **$7.4 billion** as of June 30, 2025, using yen-denominated debt (**$5.5 billion**) and foreign currency forwards (**$1.9 billion**)[455](index=455&type=chunk) - Aflac Japan and Aflac U.S. use interest rate swaps and swaptions to mitigate investment income volatility and interest rate risk on variable-rate and U.S. dollar-denominated investments[460](index=460&type=chunk) [DEFERRED POLICY ACQUISITION COSTS](index=120&type=section&id=DEFERRED%20POLICY%20ACQUISITION%20COSTS) This section summarizes deferred policy acquisition costs (DAC) by segment, noting the increase in Aflac Japan's DAC due to foreign currency Deferred Policy Acquisition Costs (DAC) by Segment (in millions) | Segment | June 30, 2025 | December 31, 2024 | % Change | | :---------- | :------------ | :---------------- | :------- | | Aflac Japan | $5,614 | $5,102 | 10.0% | | Aflac U.S. | $3,682 | $3,656 | 0.7% | | **Total** | **$9,296** | **$8,758** | **6.1%** | - Aflac Japan's DAC increased by **0.7%** in yen terms during the six months ended June 30, 2025, with the dollar-denominated increase primarily due to foreign currency translation[465](index=465&type=chunk) [POLICY LIABILITIES](index=120&type=section&id=POLICY%20LIABILITIES) This section summarizes policy liabilities by segment, including future policy benefits and deferred profit liability, noting reinsurance impacts Policy Liabilities by Segment (in millions) | Segment | June 30, 2025 | December 31, 2024 | % Change | | :------------------ | :------------ | :---------------- | :------- | | Aflac Japan | $68,857 | $67,549 | 1.9% | | Aflac U.S. | $11,237 | $11,063 | 1.6% | | Corporate and other | $4,882 | $4,839 | 0.9% | | Intercompany eliminations | $(6,072) | $(5,943) | (2.2)% | | **Total** | **$78,904** | **$77,508** | **1.8%** | - Aflac Japan's policy liabilities decreased by **6.7%** in yen terms during the six months ended June 30, 2025, while the dollar-denominated amount increased by **1.9%**[468](index=468&type=chunk) [BENEFIT PLANS](index=122&type=section&id=BENEFIT%20PLANS) This section refers to Note 12 for detailed information on Aflac's Japanese and U.S. benefit plans [POLICYHOLDER PROTECTION](index=122&type=section&id=POLICYHOLDER%20PROTECTION) This section discusses policyholder protection systems in Japan and the U.S., including LIPPC and state guaranty fund assessments - Aflac Japan did not recognize an expense for LIPPC assessments in H1 2025 and H1 2024, as the LIPPC reached its required balance of **¥400 billion** in March 2022[472](index=472&type=chunk) - U.S. guaranty fund assessments were immaterial for the three- and six-month periods ended June 30, 2025 and 2024[473](index=473&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=122&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses liquidity management, capital structure, cash flows, debt, share repurchases, dividends, and regulatory restrictions - The Company targets a minimum of **$1.8 billion** in cash and cash equivalents at the Parent Company for capital buffer and liquidity support, holding **$7.0 billion** at June 30, 2025[476](index=476&type=chunk) Liquidity Provided by Subsidiaries to Parent Company (in millions) | Metric (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Management fees paid by subsidiaries | $87 | $81 | | Dividends declared or paid by subsidiaries | $2,567 | $2,111 | Consolidated Cash Flows by Activity (in millions) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :----------------------------- | :----------------------------- | | Operating activities | $988 | $1,104 | | Investing activities | $1,174 | $2,294 | | Financing activities | $(1,423) | $(1,576) | | Net change in cash and cash equivalents | $736 | $1,754 | - Cash returned to shareholders through treasury stock purchases and dividends was **$2.3 billion** in H1 2025, compared to **$2.1 billion** in H1 2024[505](index=505&type=chunk) - Aflac Japan's Solvency Margin Ratio (SMR) remains high, and the Company is committed to maintaining strong capital levels, while the FSA will introduce an economic value-based solvency regime (ESR) by March 31, 2026[516](index=516&type=chunk)[517](index=517&type=chunk) - Aflac U.S.'s combined Risk-based Capital (RBC) ratio remains high, reflecting a strong capital and surplus position[519](index=519&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=130&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section identifies critical accounting estimates for investments, derivatives, DAC, policy benefits, and income taxes, emphasizing judgment - Critical accounting estimates are sensitive to market conditions, investment yields, interest rates, mortality, morbidity, and policyholder behavior[26](index=26&type=chunk) - These estimates determine the values for **92%** of the Company's assets and **74%** of its liabilities as of June 30, 2025[528](index=528&type=chunk) - There have been no changes in the identified critical accounting estimates during the six-month period ended June 30, 2025[529](index=529&type=chunk) [New Accounting Pronouncements](index=131&type=section&id=New%20Accounting%20Pronouncements) This section refers to Note 1 for information on new accounting pronouncements and their impact [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=131&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that Aflac is exposed to currency, interest rate, credit, and equity risks, with no material changes since 2024 - The Company's primary market risks include currency risk, interest rate risk, credit risk, and equity risk[531](index=531&type=chunk) - No material changes to the Company's market risk exposures have occurred since the 2024 Annual Report[531](index=531&type=chunk) [Item 4. Controls and Procedures](index=131&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures as of June 30, 2025, with no material changes in internal control - The Company's disclosure controls and procedures were evaluated as effective as of June 30, 2025[532](index=532&type=chunk) - No material changes in internal control over financial reporting occurred during the second fiscal quarter of 2025[533](index=533&type=chunk) [PART II. OTHER INFORMATION](index=132&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=132&type=section&id=Item%201A.%20Risk%20Factors) This section supplements 2024 risk factors, detailing potential adverse effects of the June 2025 cybersecurity incident, including costs and litigation - The June 2025 cybersecurity incident could lead to additional costs (credit monitoring, incident response, legal), litigation, governmental investigations, enforcement actions, elevated cybersecurity insurance premiums, and reputational harm[536](index=536&type=chunk)[537](index=537&type=chunk) - The incident involved the exfiltration of sensitive personal data, including claims information, health information, and social security numbers, relating to a substantial number of customers, beneficiaries, employees, and agents in the U.S. business[537](index=537&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=132&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases during H1 2025, including shares bought under the program and for tax withholding obligations Issuer Purchases of Equity Securities (6 Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Number of Shares Purchased as Part of Publicly Announced Programs | Maximum Number of Shares that May Yet Be Purchased Under the Programs | | :--------------------- | :------------------------------- | :--------------------------- | :---------------------------------------------------------------- | :-------------------------------------------------------------------- | | January 1 - June 30 | 16,814,820 | $105.30 | 16,412,547 | 30,905,007 | - During H1 2025, **402,273 shares** were purchased in connection with income tax withholding obligations related to restricted-share-based awards[538](index=538&type=chunk) - As of June 30, 2025, **30.9 million shares** remained authorized for repurchase under a November 2022 board authorization[538](index=538&type=chunk) [Item 5. Other Information](index=133&type=section&id=Item%205.%20Other%20Information) This section states no directors or executive officers adopted or terminated insider trading arrangements in Q2 2025 - No insider trading arrangements (Rule 10b5-1(c) or non-Rule 10b5-1) were adopted or terminated by directors or executive officers in Q2 2025[540](index=540&type=chunk) [Item 6. Exhibits](index=134&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, debt indentures, and certifications [Glossary of Selected Terms](index=135&type=section&id=Glossary%20of%20Selected%20Terms) [SIGNATURES](index=139&type=section&id=SIGNATURES)

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].

The consensus EPS estimate for the quarter has been revised 0.6% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe. Prior to a company's earnings announcement, it is crucial to consider revisions to earnings estimates. This serves as a significant indicator for predicting potential investor actions regarding the stock. Empirical research has consistently demonstrated a robust correl ...

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]

Core Points - Aflac Incorporated experienced a data breach, with unauthorized access to its network identified on June 12, 2025 [2] - The breach potentially impacts sensitive personal data of millions, including claims information, health information, and Social Security Numbers [2] - Barrack, Rodos & Bacine is investigating the breach and may pursue legal action on behalf of affected individuals [1][3] Company Summary - Aflac acknowledged that files containing sensitive information related to customers, beneficiaries, employees, and agents were accessed by an unknown party [2] - The company holds sensitive personal data, including names, addresses, contact information, Social Security Numbers, and health information of millions of policyholders [2] - The ongoing investigation may lead to legal responsibilities for Aflac if it is found that the company failed to adequately protect this information [3] Legal Implications - Individuals affected by the breach may be entitled to compensation due to the risks associated with identity theft and financial fraud [3] - Barrack, Rodos & Bacine has a long history of prosecuting class actions related to consumer rights and corporate misconduct, indicating a strong potential for legal action [5]