Aflac (AFL) Q4 2024 earnings summary

Executive summary

• Net earnings per diluted share surged 643.5% to $3.42 in Q4 2024, driven by significant non-recurring investment gains, while full-year net EPS rose 23.8% to $9.63; adjusted EPS increased 24.8% in Q4 to $1.56 and 15.7% for the year to $7.21.

• Adjusted earnings for Q4 were $865 million, up 18.2% year-over-year; persistency remained strong in both Japan (93.4%) and the U.S. (79.3%).

• Japan contributed over 70% of pre-tax adjusted earnings and achieved a record 36% pre-tax profit margin for the year.

• $2.8 billion was deployed for share repurchases and $3.9 billion returned to shareholders in 2024, including a 16% dividend increase for Q1 2025.

• Persistency and capital ratios remained strong, supporting stable premium income and robust capital returns.

Financial highlights

• Adjusted EPS for Q4 2024 increased 24.8% year-over-year to $1.56, with a $0.01 negative FX impact.

• Adjusted book value per share (ex-FX) rose 3.2% to $42.46; adjusted ROE was 12% (14.5% ex-FX).

• Japan segment: Net earned premiums declined 5.4% in Q4 due to reinsurance and paid-up policies; pretax margin for Q4 was 31.6%, and for the year, 36%.

• U.S. segment: Net earned premium up 2.7% in Q4, pre-tax margin 19.7% for Q4 and 21.1% for the year.

• Commercial real estate CECL reserves increased by $40 million; two loans foreclosed and added to REO portfolio.

Outlook and guidance

• For 2025–2027, Japan's benefit ratio expected at the higher end of 64%-66%, expense ratio at the lower end of 20%-23%, and pre-tax margin at the lower end of 30%-33%.

• U.S. benefit ratio expected at the lower end of 48%-52%, expense ratio at the upper end of 36%-39%, and pre-tax margin at the upper end of 17%-20%.

• New cancer insurance product to launch in Japan between March and April 2025, expected to be a major sales driver targeting younger customers.

• Company stands by previously shared 2025-2027 key metric ranges.

• Management remains focused on profitable growth, new products, and distribution strategies in both markets.