Aflac (AFL) Q4 2025 Pre Recorded earnings summary

Executive summary

• Net earnings per diluted share fell 22.8% year-over-year to $2.64 in Q4, while adjusted EPS rose 0.6% to $1.57, reflecting operational stability despite investment volatility.

• Net earnings declined 27.5% year-over-year to $1.4 billion, with adjusted earnings down 5.4% to $818 million.

• Full-year 2025 net earnings were $3.6 billion ($6.82 per diluted share), down 33% from 2024, while adjusted earnings were $4.0 billion ($7.49 per share), up 3.9%.

• Adjusted book value per share increased 2.3% to $54.06, and 0.5% to $42.66 excluding FX.

• The board declared a first quarter 2026 dividend of $0.61 per share, a 5.2% increase.

Financial highlights

• Variable investment income was $12 million below long-term expectations.

• Adjusted net investment income in Japan fell 3.9% year-over-year; in the U.S., it declined 2.8%.

• Pre-tax margin for Japan was 31.3% (down 30 bps); U.S. pre-tax margin was 17.4% (down 230 bps).

• Adjusted leverage improved to 19.7% at year-end, within the 20-25% target range.

• Strong capital ratios: SMR above 970%, regulatory ESR at 253%, combined RBC at 575%.

Outlook and guidance

• Japan underlying earned premiums expected to decline 1%-2% in 2026; pre-tax margin forecasted at 33%-36%, benefit ratio at 60%-63%, expense ratio at 20%-23%.

• U.S. net earned premium growth expected at lower end of 3%-6% range for 2026; pre-tax margin at 17%-20%, benefit ratio at 48%-52%, expense ratio at 36%-39%.

• Management remains committed to dividend growth and balanced capital deployment.