Capital Allocation Plans
Q: How are you thinking about capital allocation and potential for buybacks or other uses?
A: Management acknowledged their strong capital ratios and significant capital generation, both organically and through reinsurance. They are evaluating all opportunities, including share buybacks, special dividends, and M&A, focusing on long-term returns over the next 1 to 20 years. They emphasized that all options are on the table, prioritizing where they can get the best returns for shareholders. -

Japan Benefit Ratio Guidance
Q: Should we expect improvement in Japan's benefit ratio guidance going forward?
A: The company has lowered the future net premium ratio by roughly 100 basis points, which means the benefit ratio is expected to be about 100 basis points lower than previously anticipated. This impact from the assumption unlock will apply going into 2025 as well. -

Outlook for First Sector Sales Mix
Q: Should we expect a greater contribution from first sector sales going forward?
A: Management expects first sector savings products like Tsumitas to become a more meaningful part of the portfolio, though they will remain predominantly a third sector company. Given Japan's aging society and focus on asset management, retirement products are seen as increasingly important, and cross-selling efforts with third sector products are underway. -

Higher Incurred Claims in U.S. Business
Q: Why are incurred claims higher in the U.S. this year?
A: The increase is partly intentional, as the company is focusing on delivering value to policyholders by increasing benefits and encouraging wellness claims. Additionally, the mix shift towards products like cancer insurance, which has higher persistency, and growth in the group life and disability business, which runs at a benefit ratio in the low 80s, are contributing factors. -

Expected Sales Trend for Tsumitas
Q: Will Tsumitas sales keep growing, or will they fade over time?
A: Management expects Tsumitas sales to remain stable and meet expectations, as the product is popular among young people due to its flexibility and ability to meet their needs for asset formation and coverage. There is no indication of sales fading in the coming quarters. -

Macro Impacts on U.S. Sales and Recruiting
Q: Are macro or employment factors impacting U.S. sales and recruiting?
A: While there were some challenges earlier in the year, sales and recruiting have improved, with a 10% increase in recruiting and 5.5% sales growth this quarter. The company is focusing on strengthening its field force, broker relationships, and expanding into larger case markets, which is helping offset any macroeconomic impacts. -

Management Succession Planning
Q: What are your priorities regarding development and succession planning?
A: CEO Dan Amos is focused on ensuring a smooth succession plan and has identified internal candidates, including Virgil Miller, Max Broden, and Audrey Tillman, who have taken on larger roles. He emphasizes the importance of a strong management bench to continue the company's success whenever a transition occurs. -

Strength in U.S. Persistency
Q: What's driving the strength in U.S. persistency rates?
A: Persistency is improving due to intentional efforts like focusing on high-persistency products such as cancer insurance, enhancing benefits, and driving wellness campaigns. The mix shift towards products with higher persistency and increasing loyalty by demonstrating consumer value are key factors. -

Competitive Environment in Japan's Third Sector
Q: How is the competition in Japan's third sector products?
A: The competitive environment remains severe, especially in medical insurance. Aflac differentiates itself through unique and flexible products, a strong distribution channel, and exclusive partnerships like the one with Japan Post for cancer insurance. Management believes they can win by meeting customer needs and leveraging their strengths. -