Aflac (AFL) Q3 2026 earnings summary

Executive summary

• Q3 adjusted earnings were $1.214B, down 8.5% YoY; adjusted diluted EPS was $2.43, down 2.4%, or $2.46 excluding FX, down 1.2%.

• Reported net earnings were $303M versus $1.639B, with diluted EPS of $0.61 versus $3.08; investment losses and a tax valuation allowance weighed on results.

• Results included favorable actuarial assumption updates and U.S. business growth, while Japan earnings and yen translation pressured performance.

Financial highlights

• Q3 net investment losses were $1.072B versus $275M of gains a year earlier; $842M of losses came from sales and redemptions, largely reflecting portfolio repositioning.

• Q3 adjusted earnings included $447M of pretax reserve remeasurement gains, including $55M from quarterly experience; the assumption update added $0.71 per share.

• A $51M tax valuation allowance reduced reported earnings; cybersecurity expenses were $40M, or $0.06 per share, and variable investment income was $22M below long-term expectations.

• Adjusted investment income rose 3.7% in yen in Japan, while U.S. adjusted investment income declined 0.9%.

• Corporate and other adjusted revenue rose 5% to $360M; adjusted pretax earnings were $72M versus $69M a year earlier.

Outlook and guidance

• 2026 Japan pretax margin guidance increased to 35%–38%; the benefit ratio is expected slightly below 60%–63% and the expense ratio at the lower end of 20%–23%.

• 2026 U.S. benefit ratio is expected below 48%–52%, expense ratio in the middle of 36%–39%, and pretax margin above 17%–20%.

• Japan and U.S. sales are expected to exceed 2025; Japan sales recovered to normal levels in Q4, with October tracking expectations.

• The assumption update lowered future net premium ratios, expected to reduce in-force benefit ratios by 70 bps in Japan, 60 bps in the U.S., and 320 bps at the Bermuda reinsurer.