Aflac (AFL) Q2 2025 earnings summary

Executive summary

• Q2 2025 net earnings per diluted share were $1.11, with adjusted EPS of $1.78, both down year-over-year due to significant net investment losses and FX impacts, but reflecting solid underlying insurance performance.

• Total revenues for Q2 2025 were $4.2 billion, down from $5.1 billion in Q2 2024, mainly due to $421 million in net investment losses versus prior-year gains.

• Japan segment saw a 23.2% year-over-year sales increase, with cancer insurance sales up 53%, driven by the Miraito product and expanded distribution.

• U.S. segment generated $340 million in new sales, up 2.7% year-over-year, with strong premium persistency and net earned premium growth.

• Robust capital deployment included $829 million in share repurchases and $312 million in dividends in Q2 2025.

Financial highlights

• Adjusted EPS decreased 2.7% year-over-year to $1.78, with a $0.04 positive FX impact.

• Adjusted book value per share excluding FX remeasurement rose 5.2% year-over-year to $44.17.

• Adjusted ROE was 13.7%, or 16.4% excluding FX remeasurement.

• Net investment losses of $421 million in Q2 2025, compared to gains of $696 million in Q2 2024, driven by derivative and FX losses.

• U.S. GAAP book value per share increased 9.6% year-over-year to $50.86.

Outlook and guidance

• Japan earned premium guidance remains at -1% to -2% for the period, with Q2 results trending toward the lower end.

• Expense ratio in Japan expected to be within 20%-23% for the year, likely at the middle or lower end.

• Optimism for continued strong performance in Japan, especially with Miraito and upcoming new medical product launch.

• U.S. sales expected to strengthen in the second half, driven by fourth quarter enrollments and improved recruitment.

• Management remains focused on profitable growth, long-term value creation, and prudent capital management in both markets.