Core Points - Aflac Incorporated announced the promotion of Virgil R. Miller to president, effective January 1, 2025, while retaining his role as president of Aflac U.S. [1] - Miller's expanded responsibilities will focus on profitable growth, efficiency initiatives, digital capabilities, and product evolution [1] - The company also appointed Audrey Boone Tillman and Max K. Brodén as senior executive vice presidents, effective January 1, 2025 [3] Company Leadership - Virgil R. Miller has been with Aflac since 2004 and has held various leadership roles, including chief operating officer of Aflac U.S. [2] - Audrey Boone Tillman oversees compliance, government relations, corporate communications, and sustainability efforts [4] - Max K. Brodén leads corporate development, investor relations, financial reporting, and has oversight of global investments and risk functions [5] Company Background - Aflac Incorporated is a Fortune 500 company providing financial protection to millions through its subsidiaries in the U.S. and Japan [7] - Aflac is the leading provider of supplemental health insurance in the U.S. and cancer and medical insurance in Japan [7] - The company has been recognized for its ethical practices and sustainability efforts, being included in various prestigious lists for multiple consecutive years [7]

Core Insights - Aflac Incorporated reported a significant decline in total revenues for Q3 2024, amounting to $2.9 billion, down 40.4% from $5.0 billion in Q3 2023, with net losses of $93 million compared to net earnings of $1.6 billion a year ago, primarily due to increased foreign exchange-related losses from yen strengthening by 12.9% during the quarter [1][25]. Financial Performance - Net investment losses in Q3 2024 were $1.4 billion, or $2.51 per diluted share, compared to net investment gains of $423 million, or $0.71 per diluted share in the same quarter last year [2]. - Adjusted earnings for Q3 2024 were $1.2 billion, reflecting a 10.6% increase from $1.1 billion in Q3 2023, with adjusted earnings per diluted share rising 17.4% to $2.16 [3][32]. - For the first nine months of 2024, total revenues decreased by 9.4% to $13.5 billion, with net earnings of $3.5 billion, or $6.23 per diluted share, down from $4.4 billion, or $7.28 per diluted share in the same period of 2023 [6][26]. Shareholder Equity - Shareholders' equity at the end of Q3 2024 was $24.8 billion, or $44.60 per share, compared to $22.7 billion, or $38.63 per share, at the end of Q3 2023 [5]. - The annualized return on average shareholders' equity in Q3 was (1.5)% [5][40]. Aflac Japan Performance - In yen terms, Aflac Japan's net earned premiums were ¥255.4 billion for the quarter, a decrease of 10.5% year-over-year, while total adjusted revenues in yen declined 7.8% to ¥355.3 billion [8]. - Pretax adjusted earnings in yen for the quarter increased 25.5% to ¥158.7 billion, primarily due to lower benefits and expenses [8]. Aflac U.S. Performance - Aflac U.S. net earned premiums increased 2.8% to $1.5 billion in Q3, with total adjusted revenues up 1.4% to $1.7 billion [13]. - Total new annualized premium sales in the U.S. increased 5.5% in the quarter to $379 million, driven by group life and cancer insurance products [15]. Capital Management - The board declared a fourth-quarter dividend of $0.50 per share, with $500 million deployed for share repurchases in Q3 2024 [18][22]. - The company maintained a strong focus on generating profitable growth and managing expenses effectively [19][21].

Core Viewpoint - Aflac Incorporated (AFL) is expected to report a decline in earnings and revenues for the third quarter of 2024, with earnings per share estimated at $1.69, reflecting an 8.2% decrease from the previous year [1][2]. Earnings Estimates - The Zacks Consensus Estimate for earnings per share is $1.69, indicating an 8.2% decline from the prior-year quarter [1]. - The revenue estimate is pegged at $4.6 billion, which represents a 7% decrease from the year-ago quarter [2]. - Aflac's earnings surprise history shows that the company has beaten estimates in three of the last four quarters, with an average surprise of 8.24% [2]. Earnings Prediction Model - Aflac has an Earnings ESP of +0.66%, as the Most Accurate Estimate of $1.70 per share is higher than the Zacks Consensus Estimate [4]. - The company currently holds a Zacks Rank of 3 (Hold) [4]. Revenue Growth Factors - Revenue growth is anticipated to be supported by strong contributions from U.S. operations, driven by increased net earned premiums and higher-yielding fixed-income investments [5]. - The consensus estimate for net earned premiums in the U.S. segment is $1.5 billion, indicating a 3.3% increase from the prior-year quarter [6]. - Adjusted net investment income for the U.S. segment is estimated at $217.3 million, reflecting a 4% growth year-over-year [6]. Japan Segment Challenges - Aflac's Japan segment is expected to face challenges with a decline in net earned premiums, projected at $1.8 billion, indicating a 9.1% decrease from the prior-year quarter [7]. - Despite the challenges, solid persistency rates may provide some support to the segment's quarterly results [7]. Consolidated Financial Estimates - The consensus estimate for consolidated net earned premiums is $3.4 billion, indicating a 2.4% decrease from the prior-year quarter [8]. - Total net investment income is estimated at $952.6 million, reflecting a 5.1% decline year-over-year [8]. - Expense ratios in both segments are expected to improve due to prudent expense management efforts [8]. Stock Performance - Aflac's shares have gained 33.8% year-to-date, outperforming the industry growth of 33.4%, the broader Zacks Finance sector's 17% rise, and the S&P 500 index's 21.9% increase [9].

Core Insights - The Finance sector's third-quarter 2024 earnings are projected to improve by 10%, with revenues expected to rise by 5.9% [1] - Insurance industry results are anticipated to benefit from better pricing, exposure growth, accelerated digitalization, and favorable interest rates, although catastrophe losses may impact profitability [1][3] Industry Overview - Underwriting results for insurers are likely to improve due to better pricing, increased exposure, solid retention, new business growth, and favorable reserve development [3] - Catastrophe losses, particularly from Hurricane Helene, are expected to affect profitability, with estimated economic losses exceeding $35 billion and insured losses over $12 billion [3] - Global commercial pricing saw a decline for the first time in seven years, while the U.S. experienced a 3% increase in pricing [4] Company Performance Expectations - **Berkshire Hathaway (BRK.B)**: Expected to benefit from improved pricing and solid retention, with a Zacks Consensus Estimate for earnings at $4.81, a decrease of 3% year-over-year [6][7] - **MetLife Inc. (MET)**: Anticipated to see solid performance driven by Group Benefits and international segments, with earnings estimated at $2.16, reflecting a 9.6% increase year-over-year [7] - **Lincoln National Corporation (LNC)**: Projected to achieve significant growth with earnings expected at $1.64, indicating a 613% increase from the previous year [8] - **Willis Towers Watson plc (WTW)**: Expected to benefit from geographic diversification and operational efficiency, with earnings estimated at $2.68, a 19.4% increase year-over-year [9] - **Aflac Inc. (AFL)**: Anticipated to see a decrease in earnings to $41.69, down 8.2% from the previous year, despite product innovations and cost-saving initiatives [10] Market Trends - Increased travel is likely to have driven up auto premiums, although the loss ratio may be negatively impacted by higher repair and medical costs [4] - A stronger mortgage market is expected to favor mortgage insurance premiums, while low unemployment rates may benefit commercial and group insurance [4] - Life insurers are focusing on protection products, which is expected to drive solid sales and improve investment income due to a larger asset base [5]

Core Insights - Aflac (AFL) is expected to report quarterly earnings of $1.69 per share, reflecting a year-over-year decline of 8.2% and revenues of $4.6 billion, down 7% from the previous year [1] - Analysts have revised the consensus EPS estimate upward by 0.9% over the last 30 days, indicating a reassessment of initial forecasts [1] Revenue Estimates - 'Revenues- Other income (loss)' is projected to be $36.19 million, showing a year-over-year decline of 23% [2] - 'Revenues- Net investment income' is expected to reach $952.63 million, indicating a decrease of 5.1% year-over-year [2] - 'Revenues- Total net earned premiums' is forecasted at $3.39 billion, reflecting a change of -2.4% from the year-ago quarter [2] Adjusted Revenue Projections - 'Total adjusted revenues- Corporate and other' is estimated at $237.10 million, representing a significant increase of 106.2% from the previous year [3] - 'Total adjusted revenues- Aflac Japan' is projected to be $2.51 billion, down 5.8% year-over-year [3] - 'Total adjusted revenues- Aflac Japan- Total net earned premiums' is expected to be $1.79 billion, indicating a decline of 9.1% [3] - 'Total adjusted revenues- Aflac Japan- Net investment income' is forecasted at $709.98 million, showing a slight increase of 0.7% [3] - 'Total adjusted revenues- Aflac U.S.- Other income' is anticipated to reach $17.00 million, reflecting a year-over-year decline of 48.5% [3] Key Metrics - 'Tot. Ben. /Premium - Aflac Japan' is expected to be 67.0%, up from 54.8% in the previous year [4] - 'Tot. Adj. Expenses/Total Adj. Rev. - Aflac U.S.' is projected at 38.9%, compared to 40.6% last year [4] - 'Tot. Ben. /Premium - Aflac U.S.' is forecasted to be 45.5%, an increase from 35.9% in the same quarter last year [4] - 'Tot. Adj. Expenses/Total Adj. Rev. - Aflac Japan' is expected to be 20.5%, up from 19% in the previous year [4] Stock Performance - Over the past month, Aflac shares have returned +1.8%, slightly outperforming the Zacks S&P 500 composite's +1.4% change [4]

Core Insights - Aflac Incorporated (AFL) has outperformed the industry with a 47.5% share price increase over the past year, compared to the industry's 41.8% growth [1] - The company benefits from strong U.S. sales, strategic growth initiatives, product enhancements, and digital transformation [1][2] - Aflac's earnings estimates for 2024 and 2025 indicate growth, with a projected increase of 8.5% and 4.9% respectively [2] Financial Performance - Aflac's return on equity stands at 16.2%, slightly above the industry average of 16.1%, indicating efficient use of shareholders' funds [1] - The company generated $1.1 billion in operating cash flows in the first half of 2024, with cash and cash equivalents increasing by 40.7% from the end of 2023 [3] - Aflac's leverage ratio is 22.2%, which is below the industry average of 22.5%, showcasing a solid financial position [3] Revenue Growth - Net earned premiums in Aflac's U.S. unit rose by 2.7% year over year in the first half of 2024, driven by strong sales and strategic initiatives [2] - The company is focused on introducing new products and enhancing existing offerings to meet evolving customer needs [3] Digital Transformation - Aflac is investing in digital solutions to improve operational efficiency and transition to digital sales channels, which is expected to support healthy profit margins [3]

Group 1 - Aflac has consistently surpassed earnings estimates, averaging a 10.08% beat over the last two quarters [1] - In the most recent quarter, Aflac reported earnings of $1.83 per share, exceeding the expected $1.59 per share by 15.09% [1] - The previous quarter also saw Aflac beat estimates, reporting $1.66 per share against an expectation of $1.58 per share, a surprise of 5.06% [1] Group 2 - There has been a favorable change in earnings estimates for Aflac, with a positive Zacks Earnings ESP indicating a strong potential for an earnings beat [2] - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [2] - Aflac currently has an Earnings ESP of +8.06%, suggesting increased analyst optimism regarding its near-term earnings potential [3] Group 3 - The next earnings report for Aflac is expected to be released on October 30, 2024 [3] - A negative Earnings ESP does not necessarily indicate an earnings miss, as many companies can still beat consensus estimates [4] - It is important to check a company's Earnings ESP ahead of its quarterly release to improve the odds of success [4]

Industry Overview - The Zacks Accident and Health Insurance industry is expected to benefit from increased underwriting exposure, with companies like Aflac Incorporated, Unum Group, and Trupanion likely to be driven by prudent underwriting standards [1] - The global worker's compensation insurance market is projected to grow significantly between 2024 and 2032, driven by rising awareness of the benefits of coverage [2] Trends Impacting the Industry - Pricing pressure is anticipated to continue due to inflation and rising medical costs, with a projected 5.3% CAGR in workers' compensation insurance pricing from 2022 to 2026 [3] - Claims frequency is expected to improve as safety measures and working conditions enhance, potentially leading to lower claims costs and increased productivity [4] - The adoption of technology, including artificial intelligence, is accelerating in the industry, which could reduce workers' compensation claim expenses by approximately 45% [5] Industry Performance - The Zacks Accident and Health Insurance industry currently holds a Zacks Industry Rank of 103, placing it in the top 41% of 251 Zacks industries, indicating positive near-term prospects [6] - The industry's earnings estimate for the current year has increased by 8% over the past year, reflecting growing analyst confidence in earnings growth potential [7] - The industry has outperformed the Finance sector and the Zacks S&P 500 composite, with a year-to-date gain of 33.6% compared to 15.8% and 21% respectively [8] Current Valuation - The industry is trading at a trailing 12-month price-to-book (P/B) ratio of 1.93X, lower than the Zacks S&P 500 composite's 3.83X and the sector's 8.77X [9] Company Highlights - **Aflac**: This company offers voluntary supplemental health and life insurance products, with a focus on digital solutions and strategic growth investments. It has a Zacks Rank of 2 and has seen a year-to-date stock gain of 36.8% [11][12] - **Unum Group**: This insurer provides long-term care and group benefits, with expected sales growth of 5-10% in 2024. It has a Zacks Rank of 3 and a year-to-date stock gain of 30.2% [13][14] - **Trupanion**: Focused on pet insurance, this company operates in a large but underpenetrated market, with a Zacks Rank of 3 and a year-to-date stock gain of 35% [16][17]

Company Performance - Aflac (AFL) has returned 36.8% year-to-date, outperforming the Finance sector average return of 17.1% [2] - BGC Group (BGC) has also shown strong performance with a return of 33.2% since the beginning of the year [2] - Aflac holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook [1][2] Industry Analysis - Aflac is part of the Insurance - Accident and Health industry, which has an average return of 34.7% year-to-date, indicating Aflac's strong performance within its industry [3] - BGC Group operates in the Financial - Investment Bank industry, which has returned 17.4% since the beginning of the year [3] - The Finance group ranks 4 within the Zacks Sector Rank, with Aflac being one of 871 companies in this sector [1]

Core Points - Aflac Incorporated will release its third quarter 2024 financial results after market close on October 30, 2024 [1] - A conference call to discuss the quarterly results and outlook is scheduled for 8:00 a.m. (ET) on October 31, 2024 [2] - Aflac is a leading provider of supplemental health insurance in the U.S. and cancer and medical insurance in Japan, with a strong commitment to corporate social responsibility and sustainability [3] Financial Results Announcement - Aflac will provide earnings materials, including a quarterly earnings release and financial supplement, on its Investor Relations website [1] - The financial update video will feature Executive Vice President and Chief Financial Officer Max Brodén [1] Conference Call Details - The conference call will include discussions led by Chairman and CEO Daniel P. Amos and CFO Max Brodén, along with other executive management members from the U.S. and Japan [2] - Registration for the conference call is required five to seven minutes prior to the start time [2] Company Overview - Aflac has been providing financial protection for over 68 years and is recognized as the No. 1 provider of supplemental health insurance products in the U.S. [3] - In Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance based on policies in force [3] - The company has received numerous accolades for its ethical practices and sustainability efforts, including being listed in the World's Most Ethical Companies for 18 consecutive years [3]