Aflac (AFL) Q3 2025 earnings summary

Executive summary

• Q3 2025 net earnings reached $1.6 billion ($3.08 per diluted share), reversing a prior year loss, with adjusted EPS up 15.3% to $2.49, driven by strong results in 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, especially Miraito; U.S. new sales reached $390 million, up 2.8%, with strong premium persistency.

• Shareholder returns were robust, with $1 billion in share repurchases and $309 million in dividends in Q3, and a new 100 million share repurchase authorization.

• Total revenues for Q3 2025 were $4.7 billion, up from $2.9 billion in Q3 2024, primarily due to $275 million in net investment gains versus $1.4 billion in losses last year.

• 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%, and annualized ROE reached 23.5%.

• 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.

• Japan benefit ratio was 39.3%, down nearly 10 points year-over-year; third sector benefit ratio was 27.8%, down 14 points.

• U.S. net earned premium up 2.5%; benefit ratio at 45.6%, 200 bps lower year-over-year due to assumption unlock; pre-tax margin at 21.7%.

• Shareholders' equity rose to $28.7 billion ($54.57/share) at September 30, 2025.

Outlook and guidance

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

• U.S. 2025 benefit ratio expected at 48%-52%; expense ratio 36%-39%; pre-tax margin 17%-20%.

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

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

• Continued need for third sector products in Japan and growth in U.S. group product sales expected.