Aflac (AFL) Q2 2026 earnings summary

Executive summary

• Net earnings for Q2 2026 were $825 million ($1.63 per diluted share), up 37.7% year-over-year, while adjusted earnings were $883 million ($1.75 per diluted share), down 7.7% year-over-year; adjusted EPS excluding FX impact increased 1.1% to $1.80.

• $1.3 billion was returned to shareholders in Q2 via $983 million in share repurchases and $309 million in dividends, totaling $2.6 billion for the first half; 43 consecutive years of dividend increases.

• Shareholders' equity increased to $30.3 billion at June 30, 2026, with adjusted book value per share at $55.01, but adjusted book value excluding FX remeasurement declined 4.1%.

• Japan sales declined 5.6% year-over-year, but first-half sales rose 7% due to strong product performance; U.S. sales increased 2.6% year-over-year, led by group voluntary and dental/vision products.

• Persistency rates remained high: Japan at 92.7%, U.S. at 79.4%.

Financial highlights

• Net earned premiums for Q2 2026 were $3.25 billion, down from $3.47 billion in Q2 2025; net investment income was $984 million, down from $1.08 billion.

• Net investment losses narrowed to $153 million in Q2 2026 from $421 million a year ago; variable investment income was $72 million below long-term expectations.

• Adjusted leverage ratio improved to 21.8%, within the 20%-25% target range; regulatory ESR at 226% (240% with USP); combined RBC slightly above 600%.

• Pretax margin: Japan 34.3% (up 230 bps YoY), U.S. 20.9% (down 160 bps YoY).

• Annualized adjusted ROE excluding FX remeasurement was 16.6%.

Outlook and guidance

• Japan benefit ratio expected at the high end of 60%-63% guidance for 2026, excluding Q3 actuarial review.

• U.S. net earned premium growth for 2026 expected just below 3%-6% guidance, but 2025-2027 CAGR still within range.

• Management remains committed to prudent liquidity and capital management, targeting a minimum $1.0 billion capital buffer at the parent level.

• Focus on profitable growth, long-term value, and extending the record of dividend increases.