Aflac (AFL) Bank of America Securities Financial Services Conference summary

Business overview and strategy

• Operates in the U.S. and Japan, focusing on supplemental health insurance and leading cancer and medical insurance in Japan, with industry-leading market share in both regions.

• Maintains a consistent strategy of offering fixed cash benefits, regularly updating products to meet evolving consumer needs, and leveraging a robust product portfolio.

• Sells through multiple channels, including associates, brokers, and direct sales, with a focus on expanding reach and optimizing distribution networks.

• In Japan, emphasizes acquiring younger customers, expanding product offerings like Tsumitasu and new cancer insurance, and maintaining persistency rates above 93%.

• In the U.S., targets both small and large employers, leveraging a diverse product mix, digital channels, and a 27% market share in worksite supplemental health insurance.

Financial performance and capital management

• In 2024, Japan adjusted revenues declined 2.3% to JPY 1.5 trillion, but pre-tax adjusted earnings rose 15.5% to JPY 520 billion, with a 36% pre-tax profit margin.

• U.S. adjusted revenues increased 1.8% to $6.7 billion, with pre-tax adjusted earnings of $1.4 billion and a 21.1% pre-tax profit margin.

• Consolidated adjusted earnings per diluted share reached a record $7.21, up 15.7%, and $7.39 when adjusted for currency effects; net EPS up 23.8% to $9.63.

• Maintains strong liquidity with $4.1 billion unencumbered at year-end, robust capital ratios, solvency margin ratio at 941% (2023), and combined risk-based capital ratio above 1,150% (2024e).

• Returned $3.9 billion to shareholders in 2024 through dividends and buybacks, with annual cash dividend increased for 42 consecutive years and a 13% CAGR (2019–2024).

Growth initiatives and market opportunities

• Launched new cancer insurance product in Japan with enhanced features and support services, targeting both existing and new customers.

• Focuses on increasing penetration within existing U.S. accounts, as it is easier and more profitable than acquiring new accounts.

• Expanding group business through broker channels and new product acquisitions, with over half of business now from brokers.

• Sees opportunity in underpenetrated U.S. employer market, with 112 million workers lacking access to its products.

• Adapts recruiting strategies to labor market conditions, leveraging commission-driven sales and targeting diverse candidates.