Aflac (AFL) Q4 2024 earnings summary

Executive summary

• Net earnings per diluted share rose 23.8% to $9.63, and adjusted EPS increased 15.7% to $7.21 for 2024; Q4 adjusted EPS rose 24.8% to $1.56, and net EPS surged 643.5% to $3.42 on significant investment gains.

• Adjusted earnings for Q4 were $865M, up 18.2% year-over-year; full-year adjusted earnings reached $4.1B, up 9.1%.

• Persistency remained strong in Japan (93.4%) and the U.S. (up to 79.3%), with Japan sales up 5.6% and U.S. net earned premiums up 2.7%.

• Total Q4 revenues were $5.4B, up 43.1% year-over-year; full-year revenues rose 1.2% to $18.9B.

• The board declared a 16% increase in the first quarter dividend to $0.58 per share.

Financial highlights

• Q4 net investment gains totaled $1.0B, compared to net investment losses of $511M in the prior year.

• Adjusted book value per share rose 11.2% to $52.87; excluding FX, it increased 3.2% to $42.46.

• Adjusted ROE was 12% in Q4, up from 10.5% in Q4 2023; excluding FX, adjusted ROE was 14.5%.

• Q4 pretax adjusted profit margin for Japan was 31.6%; for U.S., 19.7%.

• Shareholders' equity at year-end was $26.1B ($47.45 per share), up from $22.0B ($38.00 per share) a year ago.

Outlook and guidance

• For 2025–2027, Japan's benefit ratio is targeted at 64–66%, expense ratio at 20–23%, and pre-tax margin at 30–33%.

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

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

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

• Strategy includes targeting younger customers in Japan and maintaining strong persistency.