Aflac (AFL) KBW Insurance Conference 2026 summary

Investment repositioning and risk management in Japan

• Executed significant investment repositioning in Japan, offsetting FX gains with JGB losses to achieve higher yields and reduce impairment risk, resulting in a $50 million annual run-rate increase in net investment income.

• Reduced total unrealized loss on the JGB portfolio, lowering future impairment risk and supporting dividend capacity.

• Repositioned 5% of the portfolio in one quarter, with further but smaller opportunities expected.

Product strategy and growth in Japan

• Opportunistically growing savings-oriented life insurance products like Tsumitasu due to favorable yield curve steepness, with strong IRRs and strategic value in attracting younger clients.

• Third sector (cancer and medical) sales grew 24% in 2025, with Miraito cancer product maturing and medical product Anshin Palette targeted for growth, especially through non-exclusive agency channels.

• Third-party reinsurance in Japan is being expanded, focusing on mortality, longevity, and spread risk for diversification and capital benefits.

Benefit ratio, claims, and medical advancements

• Japan benefit ratio is at the upper end of the 60%-63% target, mainly due to lapsation mix rather than claims trends, expected to normalize in the second half.

• Medical advancements in cancer treatment have historically led to favorable claims experience and increased demand for updated policies.

• Expense ratio in Japan remains at the lower end of the target due to effective expense management and higher net investment income.