New Annualized Premium Sales (¥ Billion)

New Annualized Premium Sales ($ Million)

Contributions by Major Insurance Product - Cancer (%)

Contributions by Major Insurance Product - Medical (%)

Contributions by Agency Type - Independent (%)

Contributions by Agency Type - Affiliated (%)

Number of Sales Agencies

Number of Licensed Sales Associates

Agreements to Sell at Banks

New Money Yield (%)

Return on Average Invested Assets (%)

Portfolio Book Yield (%)

Premium Persistency (%)

Annualized Premiums in Force (¥ Trillion)

Weighted-Average DSCR for CMLs

c819ea9f257ff7b11f31881a42f7d7ef14642d94c9a6d143a95241f8a92748c1

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

8d4d1244aa7e75396018b3969d5e27782d29ce0b0d172d619ce2159fc8722493

| Metric [USD Million] | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Aflac Japan**      | **2,500**  **[0000004977-24-000006_aflex991-q42023.htm:2]**  | **2,660**  **[0000004977-23-000177_afl-20230930.htm:23]**  | **2,710**  **[0000004977-23-000149_afl-20230630.htm:19]**  | **2,800**  **[0000004977-23-000087_aflex991-q12023.htm:1]**  | N/A     | N/A     | N/A     | N/A     |
| **Aflac U.S.**       | **1,600**  **[0000004977-24-000006_aflex991-q42023.htm:2]**  | **1,660**  **[0000004977-23-000177_afl-20230930.htm:23]**  | **1,663**  **[0000004977-23-000149_afl-20230630.htm:19]**  | **1,700**  **[0000004977-23-000087_aflex991-q12023.htm:1]**  | N/A     | N/A     | N/A     | N/A     |
| **Corporate and Other** | N/A     | **115**  **[0000004977-23-000172_aflex991-q32023.htm:3]**  | **140**  **[0000004977-23-000149_afl-20230630.htm:19]**  | **129**  **[0000004977-23-000087_aflex991-q12023.htm:1]**  | N/A     | N/A     | N/A     | N/A     |

594a52884172987fe751a67d23bfeb0c7eed22f4fefec843a516328464114a16

Aflac Japan

- Net Earned Premiums

- Net Investment Income

- Other Income

Aflac U.S.

Other Business Segments

Corporate and Other

Total Adjusted Revenues

Total Revenues

a556ae5c48798dfdef48e0a487be54a4172467f391d6f44fbbb0c4affe33bb82

1. With competitors aggressively entering the third sector market in Japan and offering lower-priced products, how does Aflac plan to maintain its market share and profitability without engaging in a price war?
2. The TSUMITAS product targets younger customers with less disposable income; how are you addressing the potential challenges of lower profitability and higher lapse rates associated with this demographic?
3. Given that your expense ratios in both Japan and the U.S. reached record lows this quarter, but with anticipated increases in promotional spending and unscaled businesses, how sustainable are these expense levels moving forward?
4. Considering the increase in your commercial real estate loan watch list to approximately $1 billion and ongoing foreclosures, what is your strategy to mitigate potential risks, and how might further real estate market deterioration impact your financial position?
5. The significant boost in net investment income appears driven by tactical asset reallocations and favorable short-term rates; with potential rate cuts on the horizon, how do you plan to sustain this elevated income level in your U.S. dollar portfolio?

da9e1685e7854ba1196a34d8999eeef2decd0c515f8005c3d9155e05b1041959

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

0a8bde86f8405da04e97c68e8136575cbc7e786c6551dcb919ecf2de7f42447d

- Adjusted Net Investment Income

Total Revenue

57a0b95a3d4c2971f9cf5657581dcb9c85dbad50bcbdfc679e56befcf9566c14

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: N/A
- **Guidance**: The documents do not contain information about the guidance for Q3 2024 for Aflac Incorporated. Therefore, no specific metrics or periods were guided.

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: N/A
- **Guidance**:
  - **Expense Ratios**:
    - Japan: **19% to 21%**, expected to end up in the lower end for the full year  **[AFL_3395933_6]** .
    - U.S.: **38% to 40%** for the full year  **[AFL_3395933_6]** .
  - **Sales and Growth Initiatives**:
    - U.S.: Stronger sales push expected in the second half of the year  **[AFL_3395933_12]** .
    - Japan: New product TSUMITAS expected to contribute to sales  **[AFL_3395933_14]** .
  - **Persistency**: Focus on improving persistency in the U.S.  **[AFL_3395933_16]** .
  - **Capital Management**: Commitment to maintaining strong capital ratios and liquidity  **[AFL_3395933_2]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Sales Guidance**:
    - U.S.: Stronger performance expected in the latter part of the year  **[AFL_3382368_7]** .
    - Japan: Expects to exceed 2023 sales results  **[AFL_3382368_8]** .
  - **Expense Ratio**:
    - Japan: **19% to 21%** for the full year  **[AFL_3382368_14]** .
  - **Persistency**: Improved by **80 basis points** to **78.7%** in Q1 2024  **[AFL_3382368_4]** .
  - **Capital and Liquidity**:
    - SMR above **1,100%** in Japan and RBC greater than **650%**  **[AFL_3382368_5]** .
    - Liquidity position of **$3.7 billion**  **[AFL_3382368_16]** .
  - **Profit Margins**:
    - Japan: **32.8%** pretax profit margin  **[AFL_3382368_1]** .
    - U.S.: **21%** pretax margin  **[AFL_3382368_4]** .
  - **Investment Income**:
    - Japan: Adjusted net investment income up **19.3%**  **[AFL_3382368_4]** .
    - U.S.: Adjusted net investment income up **4.6%**  **[AFL_3382368_4]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Japan Segment**:
    - Net earned premiums: Decline by **2.5% to 1.5%**  **[AFL_3371654_4]** .
    - Benefit ratio: **66% to 68%**  **[AFL_3371654_4]** .
    - Expense ratio: **19% to 21%**  **[AFL_3371654_4]** .
    - Pretax profit margin: **29% to 31%**  **[AFL_3371654_4]** .
  - **U.S. Segment**:
    - Net earned premium growth: **3% to 5%**  **[AFL_3371654_4]** .
    - Benefit ratio: **45% to 47%**  **[AFL_3371654_5]** .
    - Expense ratio: **38% to 40%**  **[AFL_3371654_5]** .
    - Profit margin: **19% to 21%**  **[AFL_3371654_5]** .
  - **Corporate Segment**: No specific numeric guidance provided  **[AFL_3371654_5]** .

7b1f0eb8ad2eff88763679f06a28961401bca3f066429ae1005061a314bcd74b

| Name               | Position                                                                 | Start Date          | Short Bio                                                                                                                                                                                                 |
|--------------------|--------------------------------------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Daniel P. Amos     | Chairman, Chief Executive Officer                                        | CEO: 1990, Chairman: 2001 | Daniel P. Amos has been the **Chief Executive Officer of Aflac Incorporated and Aflac since 1990** and has served as **Chairman since 2001**. He will resign as President effective **January 1, 2025**  **[0000004977-24-000068_afl-20240320.htm:17]** **[0000004977-24-000053_afl-20231231.htm:21]** **[0000004977-24-000164_afl-20241030.htm:2]** . |
| Steven K. Beaver   | Executive Vice President, Chief Financial Officer, Aflac Japan           | 2024                | Steven K. Beaver is the **Executive Vice President and Chief Financial Officer of Aflac Japan** since **2024**. He previously served as the First Senior Vice President and Deputy Chief Financial Officer of Aflac Japan  **[0000004977-24-000053_afl-20231231.htm:21]** .                  |
| Robin L. Blackmon  | Chief Accounting Officer, Senior Vice President, Financial Services      | 2024                | Robin L. Blackmon has been serving as the **Chief Accounting Officer** and **Senior Vice President, Financial Services** at Aflac Incorporated since **2024**. She was previously Vice President, Deputy Chief Accounting Officer  **[0000004977-24-000053_afl-20231231.htm:21]** .          |
| Max K. Brodén      | Executive Vice President, Chief Financial Officer, Aflac Incorporated    | 2020                | Max K. Brodén has been serving as the **Executive Vice President and Chief Financial Officer of Aflac Incorporated since 2020**. He was also Treasurer for Aflac from 2017 until 2021  **[0000004977-24-000053_afl-20231231.htm:21]** **[0000004977-23-000055_afl-20221231.htm:18]** .                                                    |
| Bradley E. Dyslin  | Executive Vice President, Global Chief Investment Officer, President, Aflac Asset Management LLC | 2023                | Bradley E. Dyslin has been serving as the **Executive Vice President, Global Chief Investment Officer** at Aflac since **2023**. He is also the **President of Aflac Asset Management LLC** since the same year  **[0000004977-24-000053_afl-20231231.htm:21]** **[0000004977-23-000055_afl-20221231.htm:18]** .                        |
| Masatoshi Koide    | President and Representative Director, Aflac Japan                       | 2018                | Masatoshi Koide has been serving as the **President and Representative Director of Aflac Japan since 2018**. He has focused on innovative insurance products and addressing societal needs  **[0000004977-24-000053_afl-20231231.htm:21]** **[0000004977-23-000055_afl-20221231.htm:18]** .                                              |
| Charles D. Lake II | President, Aflac International; Chairman and Representative Director, Aflac Japan | President: 2014, Chairman: 2018 | Charles D. Lake II has been serving as the **President of Aflac International since 2014** and as the **Chairman and Representative Director of Aflac Japan since 2018**  **[0000004977-24-000053_afl-20231231.htm:21]** .                                                                   |
| Virgil R. Miller   | President, Aflac U.S.; President, Aflac Incorporated (effective January 1, 2025) | Aflac U.S.: 2023, Aflac Inc.: 2025 | Virgil R. Miller joined Aflac U.S. in **2004** and has served as President of Aflac U.S. since **2023**. He will also serve as President of Aflac Incorporated effective **January 1, 2025**  **[0000004977-24-000164_afl-20241030.htm:2]** **[0000004977-24-000053_afl-20231231.htm:21]** .                                            |
| Albert A. Riggieri | Senior Vice President, Global Chief Risk Officer                         | 2018                | Albert A. Riggieri has been serving as the **Senior Vice President, Global Chief Risk Officer** at Aflac Incorporated since **2018**. He was also Chief Actuary from 2018 until 2023  **[0000004977-24-000053_afl-20231231.htm:21]** **[0000004977-23-000055_afl-20221231.htm:18]** .                                                     |
| Frederic J. Simard | Senior Vice President, Chief Financial Officer, Aflac U.S.               | 2023                | Frederic J. Simard has been serving as the **Senior Vice President, Chief Financial Officer of Aflac U.S. since 2023**. He previously worked as a consultant at Gerson Lehrman Group in 2023  **[0000004977-24-000053_afl-20231231.htm:21]** .                                                |
| Audrey B. Tillman  | Executive Vice President, General Counsel                                | 2014                | Audrey B. Tillman has been serving as the **Executive Vice President and General Counsel** of Aflac Incorporated and Aflac since **2014**  **[0000004977-24-000053_afl-20231231.htm:21]** **[0000004977-23-000055_afl-20221231.htm:18]** .                                                                                               |

d67fdc640c469c722ecc3a8aab3943d53a8d9714f7d8b2db6149c37155491dbd

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | November 2022  **[0000004977-24-000167_afl-20240930.htm:128]**  |
| End Date/Duration        | N/A             |
| Total Additional Amount  | 100,000,000 shares  **[0000004977-24-000167_afl-20240930.htm:128]**  |
| Remaining Authorization  | 54.3 million shares  **[0000004977-24-000167_afl-20240930.htm:73]** **[0000004977-24-000167_afl-20240930.htm:121]**  |
| Details                  | Part of capital deployment strategy focusing on value creation through growth investments, stable dividend growth, and disciplined tactical stock repurchase.  **[0000004977-23-000177_afl-20230930.htm:81]** **[0000004977-24-000053_afl-20231231.htm:229]** **[AFL_1147374_1]**  |

0fee15fb5fde2cf7b7baa0ca53a918019b43056543bf94dc682be4d9c0eab603

1. **Japan Sales Decline**  
   **Q:** How will third sector Japan sales trend in 2024?  
   **A:** Management expects Japan's third sector sales to recover and exceed 2023 results, despite negative sales this quarter.  **[AFL_3382368_8]**  Initiatives include enhancing the sales force by recruiting approximately **600 new agents** and promoting products through channels like Japan Post.  **[AFL_3382368_8]** 

2. **Industry vs. Aflac-specific Issues in Japan**  
   **Q:** Are Japan sales issues industry-wide or Aflac-specific?  
   **A:** Aflac attributes the challenges to a highly competitive market, especially in medical products.  **[AFL_3382368_9]**  The company avoids underwriting products with irrational pricing, focusing on profitable business. Cancer insurance sales remain strong through existing channels and Japan Post.  **[AFL_3382368_9]** 

3. **Weaker Persistency in Japan**  
   **Q:** What's causing weaker persistency in Japan?  
   **A:** The decline is mainly due to an aging in-force block with higher lapses and mortality.  **[AFL_3382368_10]**  New sales are lower than lapsation, leading to natural decreases in persistency.  **[AFL_3382368_10]** 

4. **Underwriting Discipline in U.S.**  
   **Q:** What's changed with underwriting discipline in U.S.?  
   **A:** Aflac is emphasizing underwriting discipline in the group voluntary benefits business to ensure long-term profitability amid fierce competition.  **[AFL_3382368_11]**  This strategy focuses on attracting profitable business that persists, improving overall margins.  **[AFL_3382368_11]** 

5. **Capital Ratios and Shareholder Returns**  
   **Q:** Can you explain capital ratios and shareholder returns?  
   **A:** Aflac's capital ratios are strong, with holding company liquidity at **$3.7 billion**, about **$2 billion** above the minimum.  **[AFL_3382368_16]**  Capital deployment decisions prioritize satisfying subsidiary capital needs and achieving the best returns for shareholders.  **[AFL_3382368_16]** 

6. **Hedging Costs and Yen Intervention**  
   **Q:** Impact of Japan's yen intervention on hedging costs?  
   **A:** While volatility can affect option pricing, current short-term yen volatility is low, so hedging costs remain stable.  **[AFL_3382368_15]**  Aflac's hedging program is performing well, protecting the economic value of Aflac Japan.  **[AFL_3382368_15]** 

7. **Claims Trends and Remeasurement Gains**  
   **Q:** Are favorable Japan claims trends sustainable?  
   **A:** Favorable hospitalization trends in Japan have continued, leading to remeasurement gains.  **[AFL_3382368_13]**  If these trends persist, future gains are possible, but current reserving does not assume continued improvement.  **[AFL_3382368_13]** 

8. **Agent Recruiting in U.S.**  
   **Q:** How is agent recruiting in the U.S. going?  
   **A:** Recruiting for commission roles is challenging in the current environment, but Aflac is adopting new strategies to meet targets.  **[AFL_3382368_18]**  Despite a strong Q1 2023 comparison, management expects to rebound and grow the producer base.  **[AFL_3382368_18]** 

9. **Transitional Real Estate Portfolio Risks**  
   **Q:** Are there concerns in the transitional real estate portfolio?  
   **A:** The foreclosure watchlist is stable at about **$1.2 billion**, with half in active workout proceedings.  **[AFL_3382368_17]**  Early signs of market improvement are noted, and disciplined underwriting has maintained solid loan-to-value ratios.  **[AFL_3382368_17]** 

10. **Japan Expense Sustainability**  
    **Q:** Are lower Japan expenses sustainable?  
    **A:** Favorable expenses this quarter were due to seasonality and timing.  **[AFL_3382368_14]**  For the full year, Aflac is tracking toward an expense ratio outlook of **19% to 21%**.  **[AFL_3382368_14]** 

11. **Sales Channels in Japan**  
    **Q:** Is Aflac behind in nonexclusive agency sales in Japan?  
    **A:** Aflac's exclusive agencies account for **70%** of sales, while large nonexclusive agencies contribute **5%**.  **[AFL_3382368_19]** **[AFL_3382368_20]**  While competitors focus more on nonexclusive channels, Aflac believes in the strength of its exclusive agencies and plans to grow sales across all channels.  **[AFL_3382368_20]** 

d7c737ee7f7eb9b4b4f1a62d5c3724305912381bf438d18345281669a6a3fb7f

**Annual guidance for FY 2024:**
- **Full-Year Benefit Ratio (Japan)**: 62% to 63%  **[AFL_3405034_4]**  (no prior guidance)  
- **Full-Year Pretax Margin (Japan)**: 35% to 36%  **[AFL_3405034_4]**  (no prior guidance)  
- **Full-Year Net Earned Premium Growth (U.S.)**: 3% to 5%  **[AFL_3405034_4]**  (no prior guidance)  
- **Full-Year Benefit Ratio (U.S.)**: 45% to 47%  **[AFL_3405034_4]**  (no prior guidance)  
- **Expense Ratio (U.S.)**: 38% to 40%  **[AFL_3405034_4]**  (no change from prior guidance 38% to 40%  **[AFL_3395933_6]** )  
- **Run Rate Profitability (Corporate)**: remain profitable  **[AFL_3405034_11]**  (no prior guidance)  
- **Capital Ratios**: SMR about 1,100%, RBC greater than 650%  **[AFL_3405034_5]**  (no prior guidance)  
- **Leverage Ratio**: 20% to 25%  **[AFL_3405034_5]**  (no prior guidance)  

e8f27a5d3a99659e7c5eaec0090db00b26ea1b52cfdc276d27a7fc603626a96e

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1963  **[0000004977-24-000053_afl-20231231.htm:132]**    | Present  | Current auditor   |
```

5881692f69c59c7a0c256172af393cd2c18b69734e61f1bcf9067136c6d33ee0

- Total Revenue: $2,949 million (–**40%** YoY)  **[0000004977-23-000177_afl-20230930.htm:23]** **[0000004977-24-000167_afl-20240930.htm:12]**   
- Aflac Japan: $2,378 million (–11% YoY)  **[0000004977-23-000177_afl-20230930.htm:23]** **[0000004977-24-000167_afl-20240930.htm:12]**   
- Corporate and Other: $225 million (+96% YoY)  **[0000004977-23-000177_afl-20230930.htm:23]** **[0000004977-24-000167_afl-20240930.htm:12]**   
- Operating Income (EBIT): $92 million (–95% YoY)  **[0000004977-23-000177_afl-20230930.htm:2]** **[0000004977-24-000167_afl-20240930.htm:2]**   
- Net Income: –$93 million (down from **$1,569 million** in Q3 2023)  **[0000004977-23-000177_afl-20230930.htm:2]** **[0000004977-24-000167_afl-20240930.htm:2]**   
- EPS (Diluted): –$0.12 (down from $2.63 in Q3 2023)  **[0000004977-23-000177_afl-20230930.htm:2]** **[0000004977-24-000167_afl-20240930.htm:2]**   

566684c7fb37eb51cc4f9c495f63b586283ff1489eb6d74114bebdf901da186a

e91fba3afa6dbe303c8ccc6ef3e284ad7bd5b3ff7e4f847e3ac568c51c55f35b

| Year | Amount Due (in millions) | Debt Type | Interest Rate (%) | % of Total Debt |
|------|--------------------------|-----------|-------------------|-----------------|
| 2025 | $87 **[0000004977-24-000167_afl-20240930.htm:69]**              | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 0.300 **[0000004977-24-000167_afl-20240930.htm:69]** | 1.1% = (87 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2026 | $698 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Sustainability Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.125 **[0000004977-24-000167_afl-20240930.htm:69]** | 8.7% = (698 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2027 | $419 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 0.932 **[0000004977-24-000167_afl-20240930.htm:69]** | 5.3% = (419 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2029 | $466 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.048 **[0000004977-24-000167_afl-20240930.htm:69]** | 5.8% = (466 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2030 | $1,291 **[0000004977-24-000167_afl-20240930.htm:69]**           | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 0.550 **[0000004977-24-000167_afl-20240930.htm:69]** | 16.2% = (1,291 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2031 | $469 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.412 **[0000004977-24-000167_afl-20240930.htm:69]** | 5.9% = (469 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2032 | $291 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 0.750 **[0000004977-24-000167_afl-20240930.htm:69]** | 3.6% = (291 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2033 | $190 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 0.844 **[0000004977-24-000167_afl-20240930.htm:69]** | 2.4% = (190 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2034 | $414 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.682 **[0000004977-24-000167_afl-20240930.htm:69]** | 5.2% = (414 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2036 | $173 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.740 **[0000004977-24-000167_afl-20240930.htm:69]** | 2.2% = (173 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2037 | $45 **[0000004977-24-000167_afl-20240930.htm:69]**              | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.594 **[0000004977-24-000167_afl-20240930.htm:69]** | 0.6% = (45 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2038 | $62 **[0000004977-24-000167_afl-20240930.htm:69]**              | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.750 **[0000004977-24-000167_afl-20240930.htm:69]** | 0.8% = (62 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2039 | $379 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.920 **[0000004977-24-000167_afl-20240930.htm:69]** | 4.8% = (379 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2040 | $254 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 6.450 **[0000004977-24-000167_afl-20240930.htm:69]** | 3.2% = (254 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2041 | $69 **[0000004977-24-000167_afl-20240930.htm:69]**              | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.264 **[0000004977-24-000167_afl-20240930.htm:69]** | 0.9% = (69 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2044 | $40 **[0000004977-24-000167_afl-20240930.htm:69]**              | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 2.160 **[0000004977-24-000167_afl-20240930.htm:69]** | 0.5% = (40 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2046 | $394 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 4.000 **[0000004977-24-000167_afl-20240930.htm:69]** | 4.9% = (394 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2047 | $416 **[0000004977-24-000167_afl-20240930.htm:69]**             | Subordinated Debentures **[0000004977-24-000167_afl-20240930.htm:69]** | 2.108 **[0000004977-24-000167_afl-20240930.htm:69]** | 5.2% = (416 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2049 | $542 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 4.750 **[0000004977-24-000167_afl-20240930.htm:69]** | 6.8% = (542 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2051 | $139 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 1.560 **[0000004977-24-000167_afl-20240930.htm:69]** | 1.7% = (139 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2052 | $83 **[0000004977-24-000167_afl-20240930.htm:69]**              | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 2.144 **[0000004977-24-000167_afl-20240930.htm:69]** | 1.0% = (83 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2053 | $209 **[0000004977-24-000167_afl-20240930.htm:69]**             | Subordinated Bonds **[0000004977-24-000167_afl-20240930.htm:69]** | 1.958 **[0000004977-24-000167_afl-20240930.htm:69]** | 2.6% = (209 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |
| 2054 | $135 **[0000004977-24-000167_afl-20240930.htm:69]**             | Senior Notes **[0000004977-24-000167_afl-20240930.htm:69]** | 2.400 **[0000004977-24-000167_afl-20240930.htm:69]** | 1.7% = (135 / 7,978) * 100 **[0000004977-24-000167_afl-20240930.htm:3]** **[0000004977-24-000167_afl-20240930.htm:69]** |

537c6e780b6d987f02752dd5b00fe6dd5538f8a75900465c7bb44f48f83ff230

- **Strong sales growth from new product launches in Japan**, specifically the TSUMITAS product targeting younger customers, leading to increased sales and cross-selling opportunities for third sector products.  **[AFL_3395933_5]** **[AFL_3395933_8]** **[AFL_3395933_10]**
- **Improved U.S. persistency rates**, with early signs from initiatives showing positive results; even a **100 basis point improvement** is meaningful and contributes to additional net earned premium over time.  **[AFL_3395933_16]**
- **Maintained #1 position in Japan's third sector market despite increased competition**, highlighting Aflac's strong customer trust and ability to provide appropriate insurance policies, leading to continued sales growth.  **[AFL_3395933_7]**

2f6d479e3a297974ed3504f1a45485cc874639e93a9845211c0f293f556b5334

1. **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.  **[AFL_3405034_7]** 

2. **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.  **[AFL_3405034_10]** 

3. **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.  **[AFL_3405034_9]** 

4. **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.  **[AFL_3405034_15]** 

5. **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.  **[AFL_3405034_14]** 

6. **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.  **[AFL_3405034_18]** 

7. **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.  **[AFL_3405034_17]** 

8. **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.  **[AFL_3405034_19]** 

9. **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.  **[AFL_3405034_19]** 

4d116838a42efa87e35f1b565c8c6bc406c214fe3dbb17738f149132188a513a

- **Strong U.S. profitability with a pretax margin of 21%**, driven by higher net earned premiums (up **3.3%**) and improved persistency (increased **80 basis points** to **78.7%**).  **[AFL_3382368_7]**
- **Japan sales expected to exceed 2023 results**, through strategies such as recruiting and training **600 new sales agents**, launching new products, and leveraging alliances like Japan Post to increase cancer insurance sales.  **[AFL_3382368_8]**
- **Disciplined expense management** leading to **improved expense ratios** in both Japan and the U.S.; Japan's expense ratio is **tracking towards the outlook of 19% to 21%**, and the U.S. expense ratio has decreased due to **platforms improving scale and lower acquisition expenses**.  **[AFL_3382368_6]** ,  **[AFL_3382368_7]**

94a62b30285fe5f8c0a11ea6cfac5d52e96e04505abb421837666ede0534e713

1. **Profitability of TSUMITAS Product**  
   **Q:** How does TSUMITAS's return compare to third sector products?  
   **A:** The TSUMITAS product launched in June has **at or higher GAAP margins** than our core third sector business. On an IRR basis, though initially lower due to higher reserves, reinsurance brings returns to very attractive levels, similar to our core business.  **[AFL_3395933_5]** 

2. **U.S. Sales and Guidance**  
   **Q:** Can you achieve full-year sales guidance despite a light quarter?  
   **A:** Despite a **2% sales increase** this quarter, we're confident in hitting guidance. We anticipate stronger sales in the second half due to seasonality, new products, and improved productivity.  **[AFL_3395933_9]** 

3. **Expense Ratio Sustainability**  
   **Q:** Are low expense ratios in Japan and U.S. sustainable?  
   **A:** In Japan, the expense ratio of **17.8%** is expected to be at the lower end of the **19%–21%** range for the year. In the U.S., expenses may rise due to seasonality, keeping the ratio within the **38%–40%** guidance.  **[AFL_3395933_6]** 

4. **Competition in Japan**  
   **Q:** How is the competitive environment in Japan evolving?  
   **A:** Competition has intensified with new entrants offering low-priced products. However, we focus on providing value, maintaining our position as the **#1** seller of third sector products in Japan.  **[AFL_3395933_6]** 

5. **Net Investment Income in Japan**  
   **Q:** What drove higher net investment income and is it sustainable?  
   **A:** The strong quarter was driven by attractive short rates, tactical portfolio actions, and accelerated deployment in structured private credit. We believe these tailwinds are sustainable into the second half.  **[AFL_3395933_11]** 

6. **U.S. Persistency Improvement**  
   **Q:** How much can you improve U.S. persistency?  
   **A:** Even a **100 basis points** improvement is meaningful. We're focusing on business improvements and beneficial mix shifts toward products with higher persistency.  **[AFL_3395933_11]** 

7. **U.S. Recruiting Trends**  
   **Q:** What is the status of U.S. recruiting recovery?  
   **A:** Recruiting improved over **10%** in Q2. We're emphasizing quality recruiting and better productivity, expecting similar recruitment numbers as last year.  **[AFL_3395933_9]** 

8. **TSUMITAS Product Rollout**  
   **Q:** Will TSUMITAS become a larger sales percentage?  
   **A:** After an initial sales spike, we expect TSUMITAS sales to level off but continue contributing significantly, aiding cross-selling of third sector products without capping sales due to strong returns.  **[AFL_3395933_10]** 

9. **Difference from WAYS Sales**  
   **Q:** How does TSUMITAS differ from previous WAYS sales?  
   **A:** TSUMITAS involves more frequent repricing, diligent distribution management, and use of reinsurance to improve IRRs, differentiating it from the significant WAYS sales of 2012–2014.  **[AFL_3395933_10]** 

8c3972b7b6b17eb0ee77d33d3a6f23130a2cdffa1d1a71e6393979f1e4224f83

- **The new TSUMITAS product in Japan has a lower internal rate of return (IRR) than core third sector products due to significant new business strain associated with higher reserves, relying on reinsurance to achieve acceptable returns, which may pressure profitability.**  **[AFL_3395933_5]**
- **Competitors in Japan are entering the third sector market with low-priced products, creating a challenging competitive environment that is "totally different compared with maybe 5 years ago or 10 years ago," potentially impacting Aflac's market share and margins.**  **[AFL_3395933_7]**
- **Aflac's strategy of targeting younger customers who may have less disposable income may lead to slower cross-selling opportunities and impact sales growth and immediate profitability in the near term.**  **[AFL_3395933_5]** **[AFL_3395933_8]** **[AFL_3395933_10]**

30623c25e28c2b24ff2f5f0d07e08b3330c2e903156279ef67c8c2480866f3bc

- **Aflac is tapping into the significant opportunity in the U.S. pet insurance market**, which has very **low penetration**. They have a partnership and ownership stake with **Trupanion**, allowing their distribution to earn additional commissions and capturing significant economics over time.  **[AFL_3371654_14]**
- **Aflac is actively reducing U.S. expenses**, with the expense ratio expected to decrease to **35% to 37% over time**, as businesses grow to scale and improve profitability. This should enhance margins and lead to a more efficient operation.  **[AFL_3371654_15]**
- **Aflac has strong capital levels and significant capital generation**, with an underlying capital generation of **$2.6 billion to $3 billion annually**. They plan to deploy this capital effectively through **dividends**, **share buybacks**, and **capital efficiency initiatives**, including internal reinsurance.  **[AFL_3371654_12]** **[AFL_3371654_10]**

fb4e935a3360dcf19351704faf87d847c9cc0a5ca73ae4239b9ed9a2cbb85387

- **Aflac has lowered its Japan sales target from JPY 80 billion to JPY 67-73 billion by 2026**, indicating expectations of slower growth in the Japanese market. The company acknowledges that achieving the original target will take longer due to market challenges.  **[AFL_3371654_7]**
- **The company's commercial real estate watch list is higher than that of peers**, primarily due to significant exposure to transitional real estate with shorter maturities, leading to elevated potential foreclosures. This could negatively impact the investment portfolio and earnings.  **[AFL_3371654_10]**
- **Net investment income growth in Japan may be flattening**, as Aflac has reached a steady state in its allocation between yen and dollar assets, potentially limiting future increases in net investment income from investments in Japan.  **[AFL_3371654_6]**

be39c07170281f688f8b6c78acd85eecabb3c303e17c70b1bbed895ba37cd2b0

- **U.S. sales were weaker than expected** in the first quarter, with management noting that sales were "a little bit softer" and emphasizing a focus on "stronger underwriting discipline," which could negatively impact sales growth.  **[AFL_3382368_7]**
- **Third sector sales in Japan turned negative** this quarter, and while initiatives are in place to improve sales, achieving significant growth may be challenging.  **[AFL_3382368_8]**
- **Persistency in Japan has declined**, with the rate decreasing by **50 basis points year-over-year to 93.4%**, due to an aging policyholder base and structural shifts in product cycles, leading to higher lapses and surrenders, which may pressure future revenues.  **[AFL_3382368_3]** **[AFL_3382368_10]**

74f1a5f99a22f681c33b2c9188d20058a33d661bfb38aae76404bac718cf3e1c

Aflac Inc (AFL)

Financials