Core Viewpoint - Aflac Incorporated has launched a new individual Aflac Accident Insurance product aimed at providing financial support to policyholders facing covered accidents, addressing both physical and mental health needs [1][2][4]. Product Features - The new Aflac Accident Insurance plan offers cash benefits for various health services post-accident, including ambulance, ER, urgent care, physical therapy, and mental health therapy, available in 32 states [2][3]. - The plan nearly doubles coverage for follow-up care treatments and includes mental health benefits, enhancing preventive care to promote overall health and wellness [2][8]. - Key benefits include increased cash benefits for post-accident medical care, built-in benefits for hospital and ICU confinement that increase annually for up to five years, and enhanced benefits for common accident outcomes such as fractures and concussions [8]. Market Context - According to the 2025 Aflac WorkForces Report, 51% of American employees cannot afford a $1,000 out-of-pocket expense due to unexpected illness or injury, highlighting the need for supplemental insurance products like Aflac's [3]. - The company aims to alleviate the financial burden associated with unanticipated medical bills, allowing policyholders to focus on recovery rather than financial stress [4][6]. Company Background - Aflac Incorporated is a Fortune 500 company and the leading provider of supplemental health insurance in the U.S., with a strong presence in Japan as well [7]. - The company has been recognized for its ethical practices and sustainability efforts, being included in the World's Most Ethical Companies for 18 consecutive years and the Dow Jones Sustainability North America Index for 11 years [7].

Core Viewpoint - Aflac Incorporated reported mixed fourth-quarter 2024 results, with adjusted earnings per share (EPS) of $1.56, missing estimates but showing a year-over-year increase of 24.8% [1][2] Financial Performance - Revenues rose from $3.8 billion in the previous year to $4.3 billion, although this was a 2.7% miss against consensus estimates [2] - Adjusted net investment income increased by 21% year over year to $962 million [5] - Total net benefits and claims decreased by 8.6% year over year to $1.9 billion [5] - Total acquisition and operating expenses fell by 2.9% year over year to $1.3 billion [5] Segment Analysis - **Aflac Japan**: Adjusted revenues decreased by 5.6% year over year to $2.4 billion, missing estimates by 4.2%. Total net earned premiums dipped by 8.2% to $1.7 billion [6] - **Aflac U.S.**: Adjusted revenues increased by 2% year over year to $1.7 billion, but missed estimates by 2.5%. Total net earned premiums rose by 2.7% to $1.4 billion [8] Full-Year Update - Adjusted EPS for 2024 improved by 15.7% to $7.21, while total revenues rose by 1.2% to $18.9 billion [10] - Net earned premiums decreased by 4.8% to $13.4 billion, but adjusted net investment income increased by 12.1% to $3.9 billion [10] Financial Position - As of December 31, 2024, total cash and cash equivalents increased to $6.2 billion from $4.3 billion at the end of 2023 [11] - Total assets fell to $117.6 billion from $126.7 billion at the end of 2023 [11] - Adjusted debt rose to $7.2 billion from $6.8 billion at the end of 2023, with a stable adjusted debt to adjusted capitalization ratio of 19.7% [12] Capital Deployment - Aflac repurchased 7 million shares worth $750 million in the fourth quarter, with 47.3 million shares remaining for buyback [14] - Management announced a dividend of 58 cents per share for the first quarter, payable on March 3, 2025 [14] Outlook - Aflac anticipates improved sales in its Japan business for 2025, focusing on third-sector products and targeting younger customers [15] - The company expects a benefit ratio of 64-66% for Aflac Japan and 48-52% for Aflac U.S. in 2025 [16]

Forward-Looking Statements and Non-GAAP Financial Measures The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these ...

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]