EX-99.1 2 aflex991-q22026new.htm EX-99.1 Document Aflac Incorporated Announces Second Quarter 2026 Results, Declares Third Quarter Dividend COLUMBUS, Ga. - August 6, 2026 - Aflac Incorporated (NYSE: AFL) today reported its second quarter results. For the Quarter • Total revenues were $4.1 billion, which was a 1.0% decrease year over year. • Net earnings were $825 million, or $1.63 per diluted share, compared with $599 million, or $1.11 per diluted share a year ago. • Adjusted earnings* were $883 million, compared with $957 million a year ago, reflecting a decrease of 7.7%. • Adjusted earnings per diluted share* decreased 1.7% to $1.75. • The annualized return on average shareholders’ equity was 10.9%. • The annualized adjusted return on equity excluding foreign currency remeasurement* was 16.6%. • The company returned $1.3 billion to shareholders, consisting of $983 million in share repurchase and $309 million in dividends. Commenting on the company’s results, Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos stated: "Aflac delivered solid earnings for the quarter and for the first six months. These results reflect execution of our strategy, driving long-term value for shareholders. In Japan, we have secured new opportunities through successful product initiatives including Anshin Palette (medical insurance), Miraito (cancer insurance) and Tsumitasu (life insurance). In the U.S., our focus is on meeting the evolving needs of employers and their employees with supplemental health products and related benefits. "We continue to pursue more profitable growth and the tactical, opportunistic deployment of capital. We treasure our 2025 milestone of 43 consecutive years of dividend increases, and the Board set us on a path to extend this record in 2026. We intend to continue our balanced approach of investing in growth and driving long-term value." AFLAC INCORPORATED CONSOLIDATED RESULTS AFLAC INCORPORATED SELECTED OPERATING RESULTS FOR THE QUARTER (IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) 2Q26 2Q25 % Change Total revenues $ 4,117   $ 4,160  (1.0) % Net earnings 825   599  37.7  % Adjusted earnings* 883   957  (7.7) % Net earnings per share (diluted) 1.63   1.11  46.8  % Adjusted earnings per share (diluted)* 1.75   1.78  (1.7) % Total shareholders' equity 30,312   27,200  11.4  % Total liabilities and shareholders' equity 115,961   124,736  (7.0) % 1 Total revenues were $4.1 billion in the second quarter of 2026, compared with $4.2 billion in the second quarter of 2025. Net earnings were $825 million, or $1.63 per diluted share, compared with $599 million, or $1.11 per diluted share a year ago. Net earnings in the second quarter of 2026 included net investment losses of $153 million, or $0.30 per diluted share, compared with net investment losses of $421 million, or $0.78 per diluted share a year ago. These net investment losses include net losses from sales and redemptions of $238 million; $77 million of current expected credit losses (CECL); impairments of $11 million; offset by an $87 million gain from an increase in the fair value of equity securities; and net gains of $86 million on certain derivatives and foreign currency activities. Adjusted earnings* in the second quarter were $883 million, compared with $957 million in the second quarter of 2025, reflecting a decrease of 7.7%. Adjusted earnings per diluted share* decreased 1.7% to $1.75 in the quarter. The average yen/dollar exchange rate in the second quarter of 2026 was 159.45, or 9.3% weaker than the average rate of 144.60 in the second quarter of 2025. The weaker yen/dollar exchange rate had a negative $0.05 impact on adjusted earnings per share. Shareholders’ equity was $30.3 billion, or $60.35 per share, at June 30, 2026, compared with $27.2 billion, or $50.86 per share, at June 30, 2025. Shareholders’ equity at the end of the second quarter included a cumulative increase of $10.4 billion for the effect of the change in discount rate assumptions on insurance reserves, co mpared with a corresponding cumulative increase of $5.6 billion at June 30, 2025 and a net unrealized loss on investment securities and derivatives of $2.8 billion, compared with a net unrealized loss of $1.8 billion at June 30, 2025 . Shareholders’ equity at the end of the second quarter also included an unrealized foreign currency translation loss of $5.0 billion, compared with an unrealized foreign currency translation loss of $4.3 billion at June 30, 2025. For the first six months of 2026, total revenues were up 12.0% to $8.5 billion, compared with $7.6 billion in the first half of 2025. Net earnings were $1.8 billion, or $3.61 per diluted share, compared with $628 million, or $1.16 per diluted share, for the first six months of 2025. Adjusted earnings for the first half of 2026 were $1.8 billion, or $3.50 per diluted share, compared with $1.9 billion, or $3.43 per diluted share, in 2025. For the first six months, the average exchange rate was 158.14, or 6.2% weaker than the rate of 148.32 a year ago. Excluding the negative impact of $0.07 per share from the weaker yen/dollar exchange rate, adjusted earnings per diluted share increased 4.1% to $3.57 for the first six months of 2026. Shareholders’ equity excluding accumulated other comprehensive income (AOCI), or adjusted book value,* was $27.6 billion, or $55.01 per share at June 30, 2026, compared with $27.7 billion, or $51.78 per share, at June 30, 2025. Adjusted book value excluding foreign currency remeasurement* was $20.7 billion, or $41.22 per share at June 30, 2026, compared with $23.0 billion, or $42.97 per share, at June 30, 2025. The annualized adjusted return on equity excluding foreign currency remeasurement* in the second quarter was 16.6%. 2 AFLAC JAPAN AFLAC JAPAN SELECTED OPERATING RESULTS FOR THE QUARTER (IN BILLIONS OF YEN AND MILLIONS OF DOLLARS) 2Q26 2Q25 % Change 2Q26 2Q25 % Change Total net earned premiums ¥ 245   ¥ 255  (3.7) % $ 1,537   $ 1,761  (12.7) % Yen-denominated investment income 30   36  (14.9) % 190   246  (22.8) % U.S. dollar-denominated investment income 70   67  4.2  % 438   464  (5.6) % Adjusted net investment income 98   101  (2.9) % 616   699  (11.9) % Total adjusted revenues 345   357  (3.6) % 2,161   2,472  (12.6) % Total benefits and claims, net 157   169  (7.5) % 983   1,172  (16.1) % Total adjusted expenses 70   74  (5.6) % 437   509  (14.1) % Pretax adjusted earnings 118   114  3.4  % 741   790  (6.2) % Change in bps Premium persistency (12-mo. rolling) 92.7   % 93.7  % (100) Total benefits and claims, net / Total net earned premiums 64.0   % 66.5  % (250) Total adjusted expenses / Total adjusted revenues 20.2   % 20.6  % (40) Pretax adjusted earnings / Total adjusted revenues 34.3   % 32.0  % 230  In yen terms, Aflac Japan's net earned premiums were ¥245.1 billion for the quarter, or 3.7% lower than a year ago, mainly due to the impact of a new external reinsurance transaction for WAYS and Tsumitasu as well as limited pay products reaching paid-up status. Adjusted net investment income decreased 2.9% to ¥98.3 billion, primarily due to reduced call income and lower dollar-denominated floating-rate income partially offset by higher income on U.S. dollar-denominated assets due to the weakening of the yen and higher dollar-denominated fixed-rate income. Total adjusted revenues in yen declined 3.6% to ¥344.6 billion. Pretax adjusted earnings in yen for the quarter increased 3.4% on a reported basis to ¥118.2 billion, primarily driven by favorable benefits. Pretax adjusted earnings decreased 2.1% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment was 34.3%, compared with 32.0% a year ago. For the first six months, net earned premiums in yen were ¥491.8 billion, or 3.8% lower than a year ago. Adjusted net investment income increased 0.4% to ¥191.0 billion. Total adjusted revenues in yen were down 2.6% to ¥685.4 billion. Pretax adjusted earnings were ¥237.3 billion, or 5.8% higher than a year ago. As a result, the pretax adjusted profit margin for the Japan segment was 34.6%, compared with 31.9% a year ago. In dollar terms, net earned premiums decreased 12.7% to $1.5 billion in the second quarter. Adjusted net investment income decreased 11.9% to $616 million. Total adjusted revenues declined by 12.6% to $2.2 billion. Pretax adjusted earnings declined 6.2% to $741 million. For the first six months, net earned premiums in dollars were $3.1 billion, or 9.6% lower than a year ago. Adjusted net investment income decreased 6.1% to $1.2 billion. Total adjusted revenues were down 8.7% to $4.3 billion. Pretax adjusted earnings were $1.5 billion, or 0.8% lower than a year ago. For the quarter, total new annualized premium sales (sales) decreased 5.6% to ¥19.6 billion, or $123 million, reflecting a high prior-year sales baseline for Miraito cancer insurance following its launch in March 2025, partially offset by strong growth in the refreshed Tsumitasu savings-type life insurance and Anshin Palette, the new medical insurance product launched in December 2025. For the first six months, sales increased 7.0% to ¥37.3 billion, or $235 million. 3 AFLAC U.S. AFLAC U.S. SELECTED OPERATING RESULTS FOR THE QUARTER (IN MILLIONS OF DOLLARS) 2Q26 2Q25 % Change Total net earned premiums $ 1,539   $ 1,504  2.3  % Adjusted net investment income 208   207  0.5  % Total adjusted revenues 1,771   1,728  2.5  % Total benefits and claims, net 762   712  7.0  % Total adjusted expenses 639   628  1.8  % Pretax adjusted earnings 370   388  (4.6) % Change in bps Persistency rate (12-mo. rolling) 79.4   % 79.2  % 20  Total benefits and claims, net / Total net earned premiums 49.5   % 47.3  % 220  Total adjusted expenses / Total adjusted revenues 36.1   % 36.3  % (20) Pretax adjusted earnings / Total adjusted revenues 20.9   % 22.5  % (160) Aflac U.S. net earned premiums increased 2.3% to $1.5 billion in the second quarter compared to the prior year, reflecting improved sales and continued strong persistency. Adjusted net investment income increased 0.5% to $208 million. Total adjusted revenues were up 2.5% to $1.8 billion. Pretax adjusted earnings were $370 million, 4.6% lower than a year ago, primarily driven by higher benefits. The pretax adjusted profit margin for the U.S. segment was 20.9%, compared with 22.5% a year ago. For the first six months, net earned premiums increased 2.9% to $3.1 billion. Adjusted net investment income remained flat at $409 million. Total adjusted revenues were up 2.9% to $3.6 billion. Pretax adjusted earnings were $733 million, 1.7% lower than a year ago. As a result, the pretax adjusted profit margin for the U.S. segment was 20.6%, compared with 21.6% a year ago. Aflac U.S. sales increased 2.6% in the quarter to $349 million, primarily benefiting from sales of group voluntary benefits and network dental and vision products. For the first six months, total new sales increased 2.8% to $667 million. 4 CORPORATE AND OTHER CORPORATE AND OTHER SELECTED OPERATING RESULTS (IN MILLIONS OF DOLLARS) 2Q26 2Q25 % Change Total net earned premiums $ 176   $ 206  (14.6) % Adjusted net investment income 114   128  (10.9) % Total adjusted revenues 291   336  (13.4) % Total benefits and claims, net 106   126  (15.9) % Interest expense 62   51  21.6  % Other adjusted expenses 133   139  (4.3) % Total benefits and adjusted expenses 301   316  (4.7) % Pretax adjusted earnings (10) 20  (150.0) % For the quarter, total adjusted revenues decreased 13.4% to $291 million. Pretax adjusted earnings were a loss of $10 million, compared with a $20 million gain last year, primarily driven by lower adjusted net investment income from reduced short-term income and reduced hedge benefits that were partially offset by higher fixed-rate income. Higher interest expense and runoff impacts from closed blocks of business also contributed to the net loss for the quarter. For the first six months, total adjusted revenues decreased 11.9% to $583 million. Pretax adjusted earnings were a loss of $10 million, compared with a gain of $63 million a year ago. SHAREHOLDER DIVIDEND The board of directors declared the third quarter dividend of $0.61 per share, payable on September 1, 2026 to shareholders of record at the close of business on August 19, 2026. *See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures. 5 ABOUT AFLAC INCORPORATED Aflac Incorporated (NYSE: AFL), a Fortune 500 company, has helped provide financial protection and peace of mind for more than seven decades to millions of policyholders and customers through its subsidiaries in the U.S. and Japan. In the U.S., Aflac is the No. 1 provider of supplemental health insurance products. 1 In Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance in terms of policies in force. 2 The company takes pride in being there for its policyholders when they need us most, as well as being included in the World’s Most Ethical Companies by Ethisphere for 20 consecutive years (2026) and Fortune’s World’s Most Admired Companies for 25 years (2026). In addition, the company became a signatory of the Principles for Responsible Investment (PRI) in 2021. To find out how to get help with expenses health insurance doesn't cover, get to know us at aflac.com or aflac.com/espanol. 1 LIMRA 2025 U.S. Supplemental Health Insurance Total Market Report 2 As of March 31, 2025, Aflac estimates based on company data Aflac Incorporated periodically provides information for investors on its corporate website, investors.aflac.com, including information regarding its commitment to corporate social responsibility and sustainability, press releases, financial information, SEC filings, corporate governance materials, annual meeting information, and other information that may be important to investors. A copy of Aflac’s financial supplement for the quarter can be found at investors.aflac.com. Aflac Incorporated will webcast its second quarter 2026 earnings conference call on Friday, August 7, 2026 at 8:00 a.m. (ET) . Note: Tables within this document may not foot due to rounding. 6 AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT (UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) THREE MONTHS ENDED JUNE 30, 2026 2025 % Change Total revenues $ 4,117  $ 4,160  (1.0) % Benefits and claims, net 1,852  2,010  (7.9) Total acquisition and operating expenses 1,270  1,328  (4.4) Earnings before income taxes 995  822  21.0  Income taxes 170  223  Net earnings $ 825  $ 599  37.7  % Net earnings per share – basic $ 1.64  $ 1.12  46.4  % Net earnings per share – diluted 1.63  1.11  46.8  Shares used to compute earnings per share (000): Basic 504,123  536,688  (6.1) % Diluted 505,578  538,425  (6.1) Dividends paid per share $ 0.61  $ 0.58  5.2  % 7 AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT (UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) SIX MONTHS ENDED JUNE 30, 2026 2025 % Change Total revenues $ 8,463  $ 7,558  12.0  % Benefits and claims, net 3,684  3,955  (6.9) Total acquisition and operating expenses 2,559  2,636  (2.9) Earnings before income taxes 2,220  967  129.6  Income taxes 376  339  Net earnings $ 1,844  $ 628  193.6  % Net earnings per share – basic $ 3.63  $ 1.16  212.9  % Net earnings per share – diluted 3.61  1.16  211.2  Shares used to compute earnings per share (000): Basic 508,572  540,676  (5.9) % Diluted 510,150  542,629  (6.0) Dividends paid per share $ 1.22  $ 1.16  5.2  % 8 AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET (UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS) JUNE 30, 2026 2025 % Change Assets: Total investments and cash $ 103,003  $ 111,769  (7.8) % Deferred policy acquisition costs 8,948  9,296  (3.7) Other assets 4,010  3,671  9.2  Total assets $ 115,961  $ 124,736  (7.0) % Liabilities and shareholders’ equity: Policy liabilities $ 64,348  $ 78,904  (18.4) % Notes payable and lease obligations 8,729  8,933  (2.3) Other liabilities 12,572  9,699  29.6  Shareholders’ equity 30,312  27,200  11.4  Total liabilities and shareholders’ equity $ 115,961  $ 124,736  (7.0) % Shares outstanding at end of period (000) 502,257  534,809  (6.1) % 9 NON-U.S. GAAP FINANCIAL MEASURES This document includes references to the Company’s financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with insurance operations. Due to the size of Aflac Japan, where the functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on reported results. In periods when the Japanese yen weakens, translating Japanese yen into U.S. dollars results in fewer U.S. dollars being reported. When the Japanese yen strengthens, translating Japanese yen into U.S. dollars results in more U.S. dollars being reported. Consequently, Japanese yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while Japanese yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. A significant portion of the Company’s business is conducted in Japanese yen and never converted into U.S. dollars but translated into U.S. dollars for U.S. GAAP reporting purposes, which results in foreign currency impact to earnings, cash flows and book value on a U.S. GAAP basis. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts and the currency-neutral operating performance over time. The average yen/dollar exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM). The company defines the non-U.S. GAAP financial measures included in this earnings release as follows: • Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The adjustments to both revenues and expenses account for certain items that are outside of management’s control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance. Management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of the Company’s insurance operations on a consolidated basis and believes that a presentation of these financial measures is vitally important to an understanding of the underlying profitability drivers and trends of the Company’s insurance business. The most comparable U.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings