Aflac Incorporated 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 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 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) 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 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 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 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 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 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 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 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, 202535 - 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 Long-Term Debt Data 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 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 ratings50 Aflac U.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 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 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 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 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 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 - The total number of recruited agents (Career and Broker) was 3,421 in Q2 2025, compared to 3,535 in Q2 202465 Aflac Japan 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 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 income68 Balance Sheets 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 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 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 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 sales85 - As of Q2 2025, sales contribution was led by Affiliated Corporate agencies (50.4%) and Individual/Independent Corporate agencies (46.8%)87 Yen/Dollar Exchange Rates 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 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 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 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 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 operations93100 - 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 control95 - 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 business102
Aflac(AFL) - 2025 Q2 - Quarterly Results