Aflac (AFL) Q3 2025 earnings summary

Executive summary

• Q3 2025 net earnings reached $1.6 billion ($3.08 per diluted share), reversing a net loss of $93 million a year ago, with adjusted EPS up 15.3% to $2.49, driven by strong results in both Japan and the U.S. and significant net investment gains.

• Japan sales rose 11.8% year-over-year, led by a 42% increase in cancer insurance sales, driven by the Miraito product; U.S. new sales increased 2.8% with strong premium persistency.

• Record capital deployment included $1 billion in share repurchases and $309 million in dividends in Q3, returning $1.3 billion to shareholders.

• Shareholders' equity rose to $28.7 billion at September 30, 2025, from $26.1 billion at year-end 2024.

• A cyber incident in June 2025 led to increased expenses, but no material financial impact has been determined yet.

Financial highlights

• Adjusted book value per share (ex-FX) increased 6.3% to $46.35; adjusted ROE was 19.1%, or 22.1% excluding FX remeasurement.

• Net investment gains of $275 million in Q3 2025, compared to $1.4 billion in losses in Q3 2024.

• Net earned premiums for Q3 2025 were $3.4 billion, up from $3.3 billion in Q3 2024; net investment income was $1.1 billion, up from $1.0 billion.

• Annualized return on average shareholders' equity for Q3 2025 was 23.5%.

• Remeasurement gains on reserves totaled $580 million, boosting EPS by $0.76 in Q3.

Outlook and guidance

• Japan 2025 benefit ratio expected in 58%-60% range; expense ratio at lower end of 20%-23%; pre-tax margin 35%-38%.

• U.S. 2025 benefit ratio expected at lower end of 48%-52%; expense ratio mid-to-upper 36%-39%; pre-tax margin upper end of 17%-20%.

• Management remains committed to prudent liquidity and capital management, with $6.8 billion in cash and equivalents at quarter-end.

• Long-term Japan benefit ratio guidance remains 64%-69%, trending lower over time.