Aflac (AFL) investor relations material

Executive summary

• Net earnings for Q2 2026 were $825 million ($1.63 per diluted share), up 37.7% year-over-year, while adjusted earnings declined 7.7% to $883 million ($1.75 per diluted share); adjusted EPS excluding FX impact increased 1.1% to $1.80.

• Total revenues for Q2 2026 were $4.1 billion, down 1% year-over-year, with shareholders' equity rising to $30.3 billion.

• $1.3 billion was returned to shareholders in Q2 via $983 million in share repurchases and $309 million in dividends, totaling $2.6 billion for the first half; 43 consecutive years of dividend increases.

• Japan sales declined 5.6% year-over-year but first-half sales rose 7%, driven by strong product performance; U.S. sales increased 2.6% year-over-year, led by group voluntary and dental/vision products.

• Cyber incidents in both the U.S. and Japan were disclosed but are not expected to have a material financial impact.

Financial highlights

• Adjusted earnings per diluted share rose 1.1% year-over-year to $1.80, excluding FX; adjusted book value per share (ex-FX) decreased 4.1% to $41.22.

• Net earned premiums for Q2 2026 were $3.25 billion, down from $3.47 billion in Q2 2025; net investment income was $984 million, down from $1.08 billion.

• Net investment losses narrowed to $153 million in Q2 2026 from $421 million a year ago.

• Adjusted leverage ratio improved to 21.8%, within the 20–25% target range.

• Annualized return on average shareholders' equity was 10.9%; adjusted ROE excluding FX remeasurement was 16.6%.

Outlook and guidance

• Japan benefit ratio for 2026 expected at the high end of 60%-63% guidance, excluding actuarial review; U.S. benefit ratio outlook 48%-52%.

• U.S. net earned premium growth for 2026 expected just below 3%-6% guidance, but 2025-2027 CAGR remains within range.

• Management remains committed to prudent liquidity and capital management, targeting a minimum $1.0 billion capital buffer at the parent level.

• Japan sales for 2026 expected to exceed 2025, with JPY 80 billion sales target still possible.

• Stronger U.S. sales growth anticipated in the second half, especially Q4, due to seasonality.