Financial Data and Key Metrics Changes - Aflac Incorporated reported a net earnings per diluted share increase of 23.8% to $9.63 and adjusted earnings per diluted share up 15.7% to $7.21 for 2024 [9] - Adjusted earnings per diluted share for Q4 2024 increased 24.8% year over year to $1.56, with a one-cent negative impact from foreign exchange [23] - The adjusted return on equity (ROE) was 12%, and 14.5% excluding foreign exchange remeasurement [24] Business Line Data and Key Metrics Changes - Aflac Japan accounted for over 70% of pretax adjusted earnings and three-quarters of the consolidated balance sheet in 2024, with a 15.5% increase in pretax adjusted earnings and a record 36% pretax profit margin [9] - In Japan, net earned premiums for Q4 declined 5.4%, impacted by an internal cancer reinsurance transaction and paid-up policies [25] - In the US, net income premium increased by 2.7%, with a total benefit ratio of 46.3%, which was 170 basis points higher than Q4 2023 [30] Market Data and Key Metrics Changes - Aflac Japan maintained a premium persistency rate of 93.4%, unchanged year over year, while the US persistency improved by 70 basis points to 79.3% [27][15] - The expense ratio in Japan was 20.8% for Q4, down 30 basis points year over year, while the US expense ratio was 40.3%, down 310 basis points year over year [28][31] Company Strategy and Development Direction - Aflac Japan's strategy focuses on acquiring younger customers and expanding product offerings, including a new cancer insurance product set to launch in March 2025 [11][13] - The company aims to enhance product persistency in the US by ensuring policyholders understand the value of their products [14] - Aflac is committed to maintaining strong capital ratios and has deployed $2.8 billion in capital for share repurchases, reflecting a focus on shareholder returns [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying strengths of the business and potential for continued growth in both Japan and the US, despite challenges in the competitive landscape [22] - The company anticipates a higher benefit ratio in Japan for 2025, with expectations for the expense ratio to be at the lower end of the range [40] - Management acknowledged the impact of higher claims on future remeasurement gains, indicating a cautious approach to underwriting [93] Other Important Information - Aflac has maintained a track record of 42 consecutive years of dividend growth, returning $3.9 billion to shareholders in 2024 [21] - The company ended the quarter with strong capital ratios, including an estimated SMR above 1150% and an ESR above 270% [36] Q&A Session Summary Question: Can you provide more color on the competitive environment impacting US sales? - Management noted that Q4 2023 was a tough comparison due to high sales, and emphasized a focus on underwriting discipline to ensure profitable business [45][46] Question: What is the outlook for Japan sales growth? - Management indicated that sales activities are recovering post-pandemic, with a focus on integrated marketing and new product launches to drive growth [64][66] Question: How is the recruiting environment in the US? - Management confirmed a stable recruitment level around 10,000 agents, emphasizing the strength of Aflac's distribution network [96] Question: What is the impact of the weaker yen on Aflac's operations? - Management explained that the yen-dollar exchange rate affects GAAP financials, but the company has a hedging strategy to protect economic value [134][135] Question: How much of the Japan margin guidance is impacted by floating rate income? - Management indicated that the majority of the margin guidance is driven by net investment income, with expectations for a decline in floating rate income due to lower short rates [140][144]

Core Viewpoint - Aflac reported strong revenue growth in Q4 2024, achieving $5.4 billion, but fell short on earnings per share, which were $1.56 compared to the expected $1.62 [2][3] Financial Performance - Adjusted EPS for Q4 2024 was $1.56, missing estimates by 3.7%, but showed a year-over-year increase of 24.8% from $1.25 [3] - Total revenue reached $5.4 billion, exceeding expectations by 28.6% and reflecting a 43.1% increase from $3.8 billion in Q4 2023 [3] - Net earnings surged to $1.9 billion, a significant increase of 609.7% from $268 million in the previous year [3] - Adjusted earnings rose 18.2% year-over-year to $865 million [3] Business Overview - Aflac is a leading supplemental insurance provider in the U.S. and Japan, focusing on life, cancer, and health insurance products [4] - The Japanese market is crucial for Aflac, significantly contributing to overall earnings [4] Strategic Focus - Recent initiatives include leveraging distribution capabilities and enhancing product offerings to meet evolving customer preferences [5] - Key success factors involve effective product development, maximizing market penetration, and navigating regulatory landscapes in both the U.S. and Japan [5] Quarterly Highlights - Net earnings increased significantly due to robust investment gains of $1.0 billion [6] - In Japan, new annualized premiums grew by 9.0%, driven by the Tsumitasu product, although currency effects led to decreased net earned premiums [6] - The average yen/dollar exchange rate weakened to 152.35, impacting earnings by $0.01 per share [6] - In the U.S., net earned premiums rose modestly by 2.7%, while sales declined by 4.5% due to a focus on profitability [7] - Shareholders' equity increased to $26.1 billion, an 18.7% year-over-year rise [7] Future Outlook - Management emphasizes a strategy focused on sustainable growth and long-term shareholder value [9] - Initiatives include a 16% dividend increase and $750 million allocated for share repurchases [9] - Investors are advised to monitor Aflac's adaptability to currency fluctuations and regulatory developments, especially in Japan [9]

Core Insights - Aflac reported revenue of $4.31 billion for the quarter ended December 2024, reflecting a 14.2% increase year-over-year, but fell short of the Zacks Consensus Estimate by 2.74% [1] - The company's EPS was $1.56, up from $1.25 in the same quarter last year, but also missed the consensus estimate of $1.62 by 3.70% [1] Financial Performance Metrics - Aflac's total adjusted revenues for the U.S. segment were $1.67 billion, below the average estimate of $1.71 billion, representing a 2% increase year-over-year [4] - Total adjusted revenues for Aflac Japan were $2.36 billion, missing the average estimate of $2.46 billion, indicating a 5.6% decline year-over-year [4] - Total net earned premiums for Aflac U.S. were reported at $1.44 billion, compared to the average estimate of $1.48 billion, showing a year-over-year increase of 2.7% [4] - Net investment income was $1.02 billion, exceeding the average estimate of $962.60 million, with a year-over-year growth of 17.5% [4] - Other income for Aflac Japan was $8 million, slightly above the average estimate of $7.02 million, with no change year-over-year [4] - Revenues from other income (loss) were reported at $24 million, below the average estimate of $33.22 million, reflecting a 36.8% decline year-over-year [4] - Corporate and other revenues reached $284 million, surpassing the average estimate of $236 million, marking a significant increase of 273.7% year-over-year [4] Stock Performance - Aflac's shares have returned +3.8% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Aflac reported quarterly earnings of $1.56 per share, missing the Zacks Consensus Estimate of $1.62 per share, but showing an increase from $1.25 per share a year ago, indicating a -3.70% earnings surprise [1] - The company posted revenues of $4.31 billion for the quarter, missing the Zacks Consensus Estimate by 2.74%, and up from $3.78 billion year-over-year [2] Earnings Performance - Over the last four quarters, Aflac has surpassed consensus EPS estimates three times [2] - The company had a significant earnings surprise of 27.06% in the previous quarter, where it reported earnings of $2.16 per share against an expectation of $1.70 [1][2] Stock Performance - Aflac shares have increased by approximately 3.2% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The current Zacks Rank for Aflac is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.71 on revenues of $4.39 billion, and for the current fiscal year, it is $7 on revenues of $17.52 billion [7] - The outlook for the industry, particularly the Insurance - Accident and Health sector, is favorable, ranking in the top 11% of over 250 Zacks industries [8] Industry Context - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5] - Trupanion, another company in the same industry, is expected to report quarterly earnings of $0.06 per share, reflecting a year-over-year change of +220%, with revenues projected at $335.69 million, up 13.5% from the previous year [9][10]

Financial Performance - Aflac Japan's adjusted earnings for Q4 2024 were $747 million, a decrease of 1.1% compared to Q4 2023's $755 million[9]. - Aflac U.S. reported adjusted earnings of $330 million for Q4 2024, reflecting a 9.3% increase from $302 million in Q4 2023[9]. - Total pretax adjusted earnings for the company in Q4 2024 were $1,073 million, a significant increase of 45.2% from $739 million in Q4 2023[9]. - Net earnings for the full year 2024 reached $5,443 million, representing a 16.8% increase from $4,659 million in 2023[9]. - The diluted earnings per share for Q4 2024 was $7.78, up 23.8% from $6.28 in Q4 2023[9]. - Aflac's total adjusted earnings for the full year 2024 were $4,072 million, a 9.1% increase from $3,733 million in 2023[9]. - The effective tax rate for the company in 2024 was 15.2%, compared to 11.5% in 2023[9]. - Net earnings for 2023 were $4,659 million, reflecting a 16.8% increase from $5,443 million projected for 2024[10]. - The company reported a pretax earnings increase of 8.1% to $5,262 million in 2023 from $4,869 million in 2022[10]. - The company anticipates an adjusted EPS of $7.21 for 2024, indicating a projected growth of 15.7%[29]. Revenue and Premiums - Aflac Japan's total revenue for 2024 was $3,494 million, an 8.0% increase from $3,234 million in 2023[9]. - Aflac U.S. total revenue for 2024 was $1,419 million, a decrease of 5.5% from $1,501 million in 2023[9]. - Total net earned premiums decreased by 1.6% to $14,123 million in 2023 from $14,318 million in 2022[10]. - Total revenues for 2023 were $18,701 million, a slight increase of 1.2% from $18,927 million in 2024[10]. - Total net earned premiums for 2023 increased by 2.7% to $5,675 million compared to 2022[54]. - Total annualized premium in force for Aflac U.S. increased by 3.3% to $6,161 million in 2023 compared to $5,967 million in 2022[65]. - New annualized premium sales for Aflac U.S. reached $1,558 million in 2023, reflecting a 5.0% increase from $1,483 million in 2022[65]. - Total net earned premiums for Aflac Japan decreased by 8.2% year-over-year to $8,047 million for 2023, with a forecasted decline of 13.9% to $6,930 million for 2024[72]. Investment Income - Net investment income increased by 17.5% to $3,811 million in 2023 compared to $3,656 million in 2022[10]. - The company experienced a 4.5% increase in net investment income, reaching $5,262 billion in 2023[19]. - Adjusted net investment income rose by 8.6% to $820 million in 2023, with a projected increase of 3.3% to $847 million in 2024[54]. - Adjusted net investment income for 2023 was $44 million, a 212.5% increase from the previous year[91]. Expenses and Claims - Total net benefits and claims decreased by 8.6% to $8,211 million in 2023 from $8,594 million in 2022[10]. - Total benefits and claims, net, decreased by 4.9% to $2,431 million in 2023, with a forecasted increase of 12.1% to $2,726 million in 2024[54]. - Total adjusted expenses for 2023 were $2,691 million, up 4.6% from 2022, with a projected decrease of 3.6% to $2,594 million in 2024[54]. - Total benefits and claims, net for Aflac Japan decreased by 7.6% year-over-year to $5,313 million for 2023, with a projected decline of 18.7% to $4,317 million for 2024[72]. Assets and Equity - The total assets decreased to $126,724 million in 2023 from $131,738 million in 2022[16]. - Shareholders' equity increased to $21,985 million in 2023 from $20,140 million in 2022[16]. - The company reported a total asset value of $21,861 million in 2023, with a slight increase to $21,930 million projected for 2024[56]. - Total shareholders' equity increased to $26,098 million in 2024, up from $21,985 million in 2023, reflecting a growth of approximately 18.5%[45]. Market and Sales Strategy - The company plans to continue focusing on market expansion and new product development to drive future growth[54]. - Aflac U.S. anticipates a 3.6% increase in total annualized premium in force to $6,383 million in 2024[65]. - The company plans to enhance its product mix, focusing on critical illness and hospital intensive care products to drive future growth[69]. - Aflac Japan's sales force data indicates a strategic focus on enhancing sales in the cancer insurance segment[86]. Currency and Foreign Exchange - The impact of foreign currency on adjusted earnings was a decrease of $0.19 in 2023, highlighting the sensitivity to currency fluctuations[29]. - The yen/dollar exchange rate for 2023 was 141.83, a 7.4% decrease compared to the previous year[89]. - Adjusted earnings per diluted share for 2023 were significantly impacted by foreign currency fluctuations, with a focus on the yen's performance[100]. - The company plans to continue monitoring the impact of foreign currency translation on its financial performance, particularly in relation to its operations in Japan[94].

Core Insights - Aflac Incorporated reported strong financial results for the fourth quarter of 2024, with total revenues increasing to $5.4 billion, a 43.1% rise from $3.8 billion in the same quarter of 2023. Net earnings surged to $1.9 billion, or $3.42 per diluted share, compared to $268 million, or $0.46 per diluted share, a year earlier [1][27]. Financial Performance - Net investment gains in Q4 2024 were $1.0 billion, or $1.86 per diluted share, a significant recovery from net investment losses of $511 million, or $0.87 per diluted share, in Q4 2023. This was driven by net gains on derivatives and foreign currency activities [2]. - Adjusted earnings for the fourth quarter were $865 million, reflecting an 18.2% increase from $732 million in Q4 2023. Adjusted earnings per diluted share rose 24.8% to $1.56 [3][34]. - For the full year 2024, total revenues increased by 1.2% to $18.9 billion, with net earnings rising to $5.4 billion, or $9.63 per diluted share, compared to $4.7 billion, or $7.78 per diluted share, in 2023 [6][36]. Shareholder Equity - Shareholders' equity at the end of Q4 2024 was $26.1 billion, or $47.45 per share, up from $22.0 billion, or $38.00 per share, at the end of Q4 2023. The annualized return on average shareholders' equity was 29.9% [5][41]. Aflac Japan Performance - In yen terms, Aflac Japan's net earned premiums for Q4 2024 were ¥257.4 billion, a decrease of 5.4% year-over-year. Adjusted net investment income increased by 3.7% to ¥101.4 billion [8][9]. - For the full year, net earned premiums in yen were ¥1.1 trillion, down 6.9% from the previous year, while adjusted net investment income rose 12.1% to ¥409.9 billion [9]. Aflac U.S. Performance - Aflac U.S. net earned premiums increased by 2.7% to $1.4 billion in Q4 2024, with adjusted net investment income rising 0.9% to $213 million. Total adjusted revenues were up 2.0% to $1.7 billion [14][15]. - For the full year, net earned premiums increased by 2.7% to $5.8 billion, while total new sales decreased by 1.0% to $1.5 billion [16][15]. Capital Management - The board declared a first-quarter dividend of $0.58 per share, payable on March 3, 2025. In Q4 2024, Aflac repurchased $750 million worth of its common shares [19][23]. - The company has maintained a strong commitment to capital management, repurchasing $2.8 billion in shares for the year [23].

Company Overview - Aflac Incorporated is a Fortune 500 company providing financial protection and peace of mind for nearly seven decades to millions of policyholders and customers through its subsidiaries in the U.S. and Japan [3] - In the U.S., Aflac is the No. 1 provider of supplemental health insurance products, while in Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance in terms of policies in force [3] - The company has been recognized as one of the World's Most Ethical Companies for 18 consecutive years and has been included in Fortune's World's Most Admired Companies for 23 years [3] Upcoming Events - Aflac Chairman and CEO Daniel P. Amos will present at the Bank of America Securities 2025 Financial Services Conference on February 12, 2025, at 10:30 a.m. ET [1] - The presentation will be webcast live, and a replay will be available within 24 hours after the conclusion of the live event [2] Corporate Social Responsibility - Aflac became a signatory of the Principles for Responsible Investment (PRI) in 2021 and has been included in the Dow Jones Sustainability North America Index for 11 years [3] - Investors can learn more about Aflac's commitment to corporate social responsibility and sustainability at the company's investor relations website [3]

Core Viewpoint - Aflac Incorporated (AFL) is set to report its fourth-quarter 2024 results on February 5, with earnings per share (EPS) expected to grow by 30.4% year-over-year to $1.63, while revenue is projected to reach $4.4 billion, reflecting a 17.4% increase from the previous year [1][2]. Earnings Estimates - The Zacks Consensus Estimate for Aflac's EPS is $1.63, with a downward revision trend observed over the past 60 days [2][3]. - The current estimates for the first and second quarters of the following fiscal year are $1.71 and $7.02, respectively, with slight revisions noted [3]. Revenue and Premiums - Aflac's U.S. segment is expected to contribute significantly to revenue growth, with net earned premiums estimated at $1.5 billion, indicating a 5.4% increase year-over-year [8][9]. - The total consolidated net earned premiums are projected at $3.4 billion, showing a slight increase from the prior-year quarter [12]. Investment Income - The consensus estimate for adjusted net investment income for Aflac's U.S. segment is $216.9 million, reflecting a 2.8% growth from the previous year [9]. - Total net investment income for Aflac is estimated at $963 million, indicating an 11.3% year-over-year growth [12]. Segment Performance - The Japan segment is anticipated to face challenges, with net earned premiums expected to decline by 3.3% to $1.8 billion due to a decrease in paid-up policies [11]. - Despite the challenges in Japan, strong persistency rates may provide some support to the segment's performance [11]. Expense Management - Improved expense ratios in both segments are expected due to effective expense management, along with benefits from reinsurance agreements that may enhance Aflac's margins [10].

Core Viewpoint - Analysts forecast Aflac (AFL) will report quarterly earnings of $1.63 per share, reflecting a year-over-year increase of 30.4%, with anticipated revenues of $4.44 billion, an increase of 17.4% compared to the previous year [1]. Earnings Projections - The consensus EPS estimate for the quarter has been revised upward by 0.3% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts estimate 'Revenues- Other income (loss)' to reach $33.22 million, indicating a decrease of 12.6% from the prior-year quarter [4]. - The estimated 'Revenues- Net investment income' is projected at $962.60 million, reflecting an increase of 11.3% year over year [5]. - 'Revenues- Total net earned premiums' is expected to remain unchanged at $3.39 billion year over year [5]. - 'Total adjusted revenues- Corporate and other' is forecasted to reach $236.00 million, showing a significant increase of 210.5% from the previous year [5]. Aflac Japan Metrics - The consensus estimate for 'Total adjusted revenues- Aflac Japan' is $2.46 billion, indicating a year-over-year decrease of 1.5% [6]. - 'Total adjusted revenues- Aflac Japan- Total net earned premiums' is projected at $1.78 billion, reflecting a decline of 3.3% year over year [6]. - 'Total adjusted revenues- Aflac Japan- Net investment income' is expected to be $680.63 million, showing a year-over-year increase of 2.5% [6]. Aflac U.S. Metrics - 'Total adjusted revenues- Aflac U.S.- Other income' is estimated at $17.50 million, indicating a decrease of 30% from the prior-year quarter [7]. - The 'Tot. Ben. /Premium - Aflac Japan' is projected to reach 66.9%, up from 56.2% reported in the same quarter last year [7]. - The average prediction for 'Tot. Adj. Expenses/Total Adj. Rev. - Aflac U.S.' is 39.5%, down from 43.4% year over year [8]. - 'Tot. Ben. /Premium - Aflac U.S.' is expected to be 46.6%, compared to 44.6% reported in the same quarter last year [8]. Overall Performance - Aflac shares have returned +4.1% over the past month, outperforming the Zacks S&P 500 composite's +2.7% change [9].

Aflac and Dagger Internship Program - Aflac and Dagger are continuing their successful internship program, Dagger X Aflac, with four new positions in Art Direction, Copywriting, Design, and Content Creation for summer 2025 [1] - The program offers hands-on agency experience, allowing interns to produce real-world work showcased publicly [1] - The inaugural 2024 program resulted in the production of a national TV ad titled "Duck Dunk," developed by SCAD interns [5] - The "Duck Dunk" ad features celebrity appearances and a hidden Easter egg highlighting Aflac's commitment to equity in sports [6] - Aflac and Dagger will recruit for the 2025 program at SCAD Atlanta on January 21, with applications open until January 26, 2025 [8] Aflac Company Overview - Aflac Incorporated is a Fortune 500 company providing financial protection and supplemental health insurance in the US and Japan [2] - In the US, Aflac is the No 1 provider of supplemental health insurance products [2] - In Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance by policies in force [2] - The company has been recognized as one of the World's Most Ethical Companies for 18 consecutive years and one of Fortune's World's Most Admired Companies for 23 years [2] - Aflac is a signatory of the Principles for Responsible Investment (PRI) and has been included in the Dow Jones Sustainability North America Index for 11 years [2] Dagger Agency Overview - Dagger is an independent, creatively driven brand-building agency based in Atlanta, Georgia [9] - The agency specializes in brand and content strategy, campaign development, media connections, and storytelling across various formats [3] - Dagger operates with a "media company mindset," prioritizing cultural relevance and steady content flow to help brands thrive [9] - Recent clients include Aflac, American Cancer Society, The Home Depot, and Georgia Aquarium, among others [10]