Aflac Incorporated Announces Second Quarter Results, Reports Second Quarter Net Earnings of $1.6 Billion, Declares Third Quarter Cash Dividend
Total revenues were
Net earnings in the second quarter of 2023 included net investment gains of
Adjusted earnings* in the second quarter were
The average yen/dollar exchange rate in the second quarter of 2023 was 137.53, or
Total investments and cash at the end of June 2023 were
Shareholders' equity was
For the first six months of 2023, total revenues were down
Shareholders' equity excluding AOCI (or adjusted book value*) was
AFLAC
In yen terms, Aflac Japan's net earned premiums were
For the first six months, net earned premiums in yen were
In dollar terms, net earned premiums decreased
For the first six months, net earned premiums in dollars were
For the quarter, total new annualized premium sales (sales) increased
AFLAC
Aflac
For the first six months, net earned premiums rose
Aflac
CORPORATE AND OTHER
For the quarter, total adjusted revenues increased
For the first six months, total adjusted revenues increased
DIVIDEND AND CAPITAL RETURNED TO SHAREHOLDERS
The board of directors declared the third quarter dividend of
In the second quarter, Aflac Incorporated deployed
OUTLOOK
Commenting on the company's results, Chairman and Chief Executive Officer Daniel P. Amos stated: "Aflac delivered very strong earnings for both the quarter and the first six months. We remain actively focused on numerous initiatives in the
"Looking at our operations in
"In the
"As always, we are committed to prudent liquidity and capital management. We continue to generate strong investment results while remaining in a defensive position as we monitor evolving economic conditions. We remain committed to extending our track record of dividend growth, supported by the strength of our capital and cash flows. At the same time, we remain in the market repurchasing shares with a tactical approach, focused on the growth investments we have made in our platform to improve our strength and leadership position."
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts.
*See Non-
ABOUT AFLAC INCORPORATED
Aflac Incorporated (NYSE: AFL), a Fortune 500 company, has helped provide financial protection and peace of mind for more than 67 years to millions of policyholders and customers through its subsidiaries in the
1 LIMRA 2021 U.S. Supplemental Health Insurance Total Market Report
A copy of Aflac's financial supplement for the quarter can be found on the "Investors" page at aflac.com.
Aflac Incorporated will webcast its quarterly conference call via the "Investors" page of aflac.com at 8:00 a.m. (ET) on Wednesday, August 2, 2023.
Note: Tables within this document may not foot due to rounding.
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) | ||||||
THREE MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Total revenues | $ 5,172 | $ 5,315 | (2.7) % | |||
Benefits and claims, net | 2,098 | 2,274 | (7.7) | |||
Total acquisition and operating expenses | 1,249 | 1,333 | (6.3) | |||
Earnings before income taxes | 1,825 | 1,708 | 6.9 | |||
Income taxes | 191 | 314 | ||||
Net earnings | $ 1,634 | $ 1,394 | 17.2 % | |||
Net earnings per share – basic | $ 2.72 | $ 2.18 | 24.8 % | |||
Net earnings per share – diluted | 2.71 | 2.17 | 24.9 | |||
Shares used to compute earnings per share (000): | ||||||
Basic | 600,742 | 640,707 | (6.2) % | |||
Diluted | 602,929 | 643,243 | (6.3) | |||
Dividends paid per share | $ 0.42 | $ 0.40 | 5.0 % |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. |
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) | ||||||
SIX MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Total revenues | $ 9,972 | (4.9) % | ||||
Benefits and claims, net | 4,247 | 4,757 | (10.7) | |||
Total acquisition and operating expenses | 2,558 | 2,729 | (6.3) | |||
Earnings before income taxes | 3,167 | 3,002 | 5.5 | |||
Income taxes | 345 | 561 | ||||
Net earnings | $ 2,822 | $ 2,441 | 15.6 % | |||
Net earnings per share – basic | $ 4.66 | $ 3.78 | 23.3 % | |||
Net earnings per share – diluted | 4.64 | 3.77 | 23.1 | |||
Shares used to compute earnings per share (000): | ||||||
Basic | 605,945 | 645,205 | (6.1) % | |||
Diluted | 608,411 | 648,010 | (6.1) | |||
Dividends paid per share | $ 0.84 | $ 0.80 | 5.0 % |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. |
AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS) | ||||||
JUNE 30, | 2023 | 2022 | % Change | |||
Assets: | ||||||
Total investments and cash | (4.1) % | |||||
Deferred policy acquisition costs | 8,860 | 8,914 | (0.6) | |||
Other assets | 5,303 | 5,910 | (10.3) | |||
Total assets | (4.1) % | |||||
Liabilities and shareholders' equity: | ||||||
Policy liabilities | $ 93,807 | $ 99,970 | (6.2) % | |||
Notes payable and lease obligations | 7,087 | 7,416 | (4.4) | |||
Other liabilities | 9,293 | 9,295 | — | |||
Shareholders' equity | 20,439 | 19,558 | 4.5 | |||
Total liabilities and shareholders' equity | (4.1) % | |||||
Shares outstanding at end of period (000) | 595,969 | 634,526 | (6.1) % |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. |
NON-
This document includes references to the Company's financial performance measures which are not calculated in accordance with
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 yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while 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 yen and never converted into dollars but translated into dollars for
The company defines the non-
- 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 cannot be predicted or that are outside management's control. Adjusted revenues are
U.S. GAAP total revenues excluding adjusted net investment gains and losses. Adjusted expenses areU.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring 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 comparableU.S. GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively. - Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. Adjusted earnings per diluted share excluding current period foreign currency impact is adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The Company considers adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact important because a significant portion of the Company's business is conducted in
Japan and foreign exchange rates are outside management's control; therefore, the Company believes it is important to understand the impact of translating foreign currency (primarily Japanese yen) intoU.S. dollars. The most comparableU.S. GAAP financial measures for adjusted earnings excluding current period foreign currency impact and adjusted earnings per diluted share excluding current period foreign currency impact are net earnings and net earnings per share, respectively. - Adjusted return on equity is adjusted earnings divided by average shareholders' equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to evaluate the financial performance of the Company's insurance operations on a consolidated basis and believes that a presentation of this financial measure is vitally important to an understanding of the underlying profitability drivers and trends of the Company's insurance business. The Company considers adjusted return on equity important as it excludes components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable
U.S. GAAP financial measure for adjusted return on equity is return on average equity (ROE) as determined using net earnings and average total shareholders' equity. - Adjusted return on equity excluding foreign currency impact is adjusted earnings excluding the current period foreign currency impact divided by average shareholders' equity, excluding AOCI. The Company considers adjusted return on equity excluding foreign currency impact important as it excludes changes in foreign currency and components of AOCI, which fluctuate due to market movements that are outside management's control. The most comparable
U.S. GAAP financial measure for adjusted return on equity excluding foreign currency impact is ROE as determined using net earnings and average total shareholders' equity. - Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency derivatives to hedge certain foreign exchange risks in the Company's
Japan segment or in Corporate and other. These amortized hedge costs/ income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight-line basis over the term of the hedge. The Company believes that amortized hedge costs/income measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income. There is no comparableU.S. GAAP financial measure for amortized hedge costs/ income. - Adjusted book value is the
U.S. GAAP book value (representing total shareholders' equity), less AOCI as recorded on theU.S. GAAP balance sheet. Adjusted book value per common share is adjusted book value at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value and adjusted book value per common share important as they exclude AOCI, which fluctuates due to market movements that are outside management's control. The most comparableU.S. GAAP financial measures for adjusted book value and adjusted book value per common share are total book value and total book value per common share, respectively. - Adjusted book value including unrealized foreign currency translation gains and losses is adjusted book value plus unrealized foreign currency translation gains and losses. Adjusted book value including unrealized foreign currency translation gains and losses per common share is adjusted book value plus unrealized foreign currency translation gains and losses at the period end divided by the ending outstanding common shares for the period presented. The Company considers adjusted book value including unrealized foreign currency translation gains and losses, and its related per share financial measure, important as they exclude certain components of AOCI, which fluctuate due to market movements that are outside management's control; however, it includes the impact of foreign currency as a result of the significance of Aflac's
Japan operation. The most comparableU.S. GAAP financial measures for adjusted book value including unrealized foreign currency translation gains and losses and adjusted book value including unrealized foreign currency translation gains and losses per common share are total book value and total book value per common share, respectively. - Adjusted net investment income is net investment income adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, and ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and losses to net investment income. The Company considers adjusted net investment income important because it provides a more comprehensive understanding of the costs and income associated with the Company's investments and related hedging strategies. The most comparable
U.S. GAAP financial measure for adjusted net investment income is net investment income. - Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest cash flows from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses. The Company considers adjusted net investment gains and losses important as it represents the remainder amount that is considered outside management's control, while excluding the components that are within management's control and are accordingly reclassified to net investment income and interest expense. The most comparable
U.S. GAAP financial measure for adjusted net investment gains and losses is net investment gains and losses.
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) | ||||||
THREE MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Net earnings | $ 1,394 | 17.2 % | ||||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | (651) | (567) | ||||
Other and non-recurring (income) loss | (35) | — | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | 5 | 119 | ||||
Adjusted earnings | 954 | 945 | 1.0 % | |||
Current period foreign currency impact 1 | 25 | N/A | ||||
Adjusted earnings excluding current period foreign | $ 979 | $ 945 | 3.6 % | |||
Net earnings per diluted share | $ 2.71 | $ 2.17 | 24.9 % | |||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | (1.08) | (0.88) | ||||
Other and non-recurring (income) loss | (0.06) | — | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | 0.01 | 0.19 | ||||
Adjusted earnings per diluted share | 1.58 | 1.47 | 7.5 % | |||
Current period foreign currency impact 1 | 0.04 | N/A | ||||
Adjusted earnings per diluted share excluding | $ 1.62 | $ 1.47 | 10.2 % |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. | |
1 | Prior period foreign currency impact reflected as "N/A" to isolate change for current period only. |
2 | Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. |
RECONCILIATION OF NET EARNINGS TO ADJUSTED EARNINGS | ||||||
(UNAUDITED – IN MILLIONS, EXCEPT FOR PER-SHARE AMOUNTS) | ||||||
SIX MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Net earnings | $ 2,822 | $ 2,441 | 15.6 % | |||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | (859) | (701) | ||||
Other and non-recurring (income) loss | (35) | — | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | (21) | 147 | ||||
Adjusted earnings | 1,907 | 1,887 | 1.1 % | |||
Current period foreign currency impact 1 | 66 | N/A | ||||
Adjusted earnings excluding current period foreign | $ 1,973 | $ 1,887 | 4.6 % | |||
Net earnings per diluted share | $ 4.64 | $ 3.77 | 23.1 % | |||
Items impacting net earnings: | ||||||
Adjusted net investment (gains) losses | (1.41) | (1.08) | ||||
Other and non-recurring (income) loss | (0.06) | — | ||||
Income tax (benefit) expense on items excluded from adjusted earnings | (0.03) | 0.23 | ||||
Adjusted earnings per diluted share | 3.13 | 2.91 | 7.6 % | |||
Current period foreign currency impact 1 | 0.11 | N/A | ||||
Adjusted earnings excluding current period foreign | $ 3.24 | $ 2.91 | 11.3 % |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. | |
1 | Prior period foreign currency impact reflected as "N/A" to isolate change for current period only. |
2 | Amounts excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. |
RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
THREE MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Net investment (gains) losses | $ (555) | $ (564) | (1.6) % | |||
Items impacting net investment (gains) losses: | ||||||
Amortized hedge costs | (63) | (30) | ||||
Amortized hedge income | 38 | 14 | ||||
Net interest cash flows from derivatives associated with certain investment strategies | (82) | (1) | ||||
Interest rate component of the change in fair value of foreign currency swaps on notes payable1 | 12 | 12 | ||||
Adjusted net investment (gains) losses | $ (651) | $ (567) | 14.8 % |
1 | Amounts are included with interest expenses that are a component of adjusted expenses. |
RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
THREE MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Net investment income | $ 999 | $ 937 | 6.6 % | |||
Items impacting net investment income: | ||||||
Amortized hedge costs | (63) | (30) | ||||
Amortized hedge income | 38 | 14 | ||||
Net interest cash flows from derivatives associated with certain investment strategies | (82) | (1) | ||||
Adjusted net investment income | $ 892 | $ 920 | (3.0) % |
RECONCILIATION OF NET INVESTMENT (GAINS) LOSSES TO ADJUSTED NET INVESTMENT (GAINS) LOSSES | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
SIX MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Net investment (gains) losses | $ (678) | $ (686) | (1.2) % | |||
Items impacting net investment (gains) losses: | ||||||
Amortized hedge costs | (122) | (55) | ||||
Amortized hedge income | 67 | 25 | ||||
Net interest cash flows from derivatives associated with certain investment strategies | (151) | (10) | ||||
Interest rate component of the change in fair value of foreign currency swaps on notes payable1 | 24 | 25 | ||||
Adjusted net investment (gains) losses | $ (859) | $ (701) | 22.5 % |
1 | Amounts are included with interest expenses that are a component of adjusted expenses. |
RECONCILIATION OF NET INVESTMENT INCOME TO ADJUSTED NET INVESTMENT INCOME | ||||||
(UNAUDITED – IN MILLIONS) | ||||||
SIX MONTHS ENDED JUNE 30, | 2023 | 2022 | % Change | |||
Net investment income | $ 1,942 | $ 1,840 | 5.5 % | |||
Items impacting net investment income: | ||||||
Amortized hedge costs | (122) | (55) | ||||
Amortized hedge income | 67 | 25 | ||||
Net interest cash flows from derivatives associated with certain investment strategies | (151) | (10) | ||||
Adjusted net investment income | $ 1,736 | $ 1,800 | (3.6) % |
RECONCILIATION OF | ||||||
(UNAUDITED - IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) | ||||||
JUNE 30, | 2023 | 2022 | % Change | |||
$ 20,439 | $ 19,559 | |||||
Less: | ||||||
Unrealized foreign currency translation gains (losses) | (4,249) | (3,218) | ||||
Unrealized gains (losses) on securities and derivatives | 1,953 | 2,901 | ||||
Effect of changes in discount rate assumptions | (5,059) | (6,502) | ||||
Pension liability adjustment | 17 | (160) | ||||
Total AOCI | (7,338) | (6,980) | ||||
Adjusted book value | $ 27,777 | $ 26,539 | ||||
Add: | ||||||
Unrealized foreign currency translation gains (losses) | (4,249) | (3,218) | ||||
Adjusted book value including unrealized foreign currency translation gains (losses) | $ 23,528 | $ 23,321 | ||||
Number of outstanding shares at end of period (000) | 595,969 | 634,526 | ||||
$ 34.30 | $ 30.82 | 11.3 % | ||||
Less: | ||||||
Unrealized foreign currency translation gains (losses) per common share | (7.13) | (5.07) | ||||
Unrealized gains (losses) on securities and derivatives per common share | 3.28 | 4.57 | ||||
Effect of changes in discount rate assumptions per common share | (8.49) | (10.25) | ||||
Pension liability adjustment per common share | 0.03 | (0.25) | ||||
Total AOCI per common share | (12.31) | (11.00) | ||||
Adjusted book value per common share | $ 46.61 | $ 41.82 | 11.5 % | |||
Add: | ||||||
Unrealized foreign currency translation gains (losses) per common share | (7.13) | (5.07) | ||||
Adjusted book value including unrealized foreign currency translation gains (losses) per common share | $ 39.48 | $ 36.75 | 7.4 % |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. |
RECONCILIATION OF | ||||
(EXCLUDING IMPACT OF FOREIGN CURRENCY) | ||||
THREE MONTHS ENDED JUNE 30, | 2023 | 2022 | ||
32.5 % | 30.0 % | |||
Impact of excluding unrealized foreign currency translation gains (losses) | (4.7) | (3.2) | ||
Impact of excluding unrealized gains (losses) on securities and derivatives | 1.9 | 4.9 | ||
Impact of excluding effect of changes in discount rate assumptions | (5.9) | (10.3) | ||
Impact of excluding pension liability adjustment | — | (0.2) | ||
Impact of excluding AOCI | (8.7) | (8.8) | ||
23.8 | 21.2 | |||
Differences between adjusted earnings and net earnings2 | (9.9) | (6.8) | ||
Adjusted ROE - reported | 13.9 | 14.4 | ||
Less: Impact of foreign currency3 | (0.4) | N/A | ||
Adjusted ROE, excluding impact of foreign currency | 14.3 | 14.4 |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. | |
1 | |
2 | See separate reconciliation of net income to adjusted earnings. |
3 | Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure. |
RECONCILIATION OF | ||||
(EXCLUDING IMPACT OF FOREIGN CURRENCY) | ||||
SIX MONTHS ENDED JUNE 30, | 2023 | 2022 | ||
27.8 % | 26.7 % | |||
Impact of excluding unrealized foreign currency translation gains (losses) | (4.0) | (2.7) | ||
Impact of excluding unrealized gains (losses) on securities and derivatives | 0.6 | 6.4 | ||
Impact of excluding effect of changes in discount rate assumptions | (3.6) | (11.5) | ||
Impact of excluding pension liability adjustment | — | (0.2) | ||
Impact of excluding AOCI | (7.0) | (7.9) | ||
20.8 | 18.8 | |||
Differences between adjusted earnings and net earnings2 | (6.7) | (4.3) | ||
Adjusted ROE - reported | 14.0 | 14.5 | ||
Less: Impact of foreign currency3 | (0.5) | N/A | ||
Adjusted ROE, excluding impact of foreign currency | 14.5 | 14.5 |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. | |
1 | |
2 | See separate reconciliation of net income to adjusted earnings. |
3 | Impact of foreign currency is calculated by restating all foreign currency components of the income statement to the weighted average foreign currency exchange rate for the comparable prior year period. The impact is the difference of the restated adjusted earnings compared to reported adjusted earnings. For comparative purposes, only current period income is restated using the weighted average prior period exchange rate, which eliminates the foreign currency impact for the current period. This allows for equal comparison of this financial measure. |
EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1 | ||||
(SELECTED PERCENTAGE CHANGES, UNAUDITED) | ||||
THREE MONTHS ENDED JUNE 30, 2023 | Including Currency Changes | Excluding Currency Changes2 | ||
Net earned premiums3 | (5.1) % | (2.0) % | ||
Adjusted net investment income4 | (3.0) | (1.5) | ||
Total benefits and expenses | (6.1) | (3.4) | ||
Adjusted earnings | 1.0 | 3.6 | ||
Adjusted earnings per diluted share | 7.5 | 10.2 |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. | |
1 | Refer to previously defined adjusted earnings and adjusted earnings per diluted share. |
2 | Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes. |
3 | Net of reinsurance |
4 | Refer to previously defined adjusted net investment income. |
EFFECT OF FOREIGN CURRENCY ON ADJUSTED RESULTS1 | ||||
(SELECTED PERCENTAGE CHANGES, UNAUDITED) | ||||
SIX MONTHS ENDED JUNE 30, 2023 | Including Currency Changes | Excluding Currency Changes2 | ||
Net earned premiums3 | (7.4) % | (2.0) % | ||
Adjusted net investment income4 | (3.6) | (0.7) | ||
Total benefits and expenses | (8.6) | (3.2) | ||
Adjusted earnings | 1.1 | 4.6 | ||
Adjusted earnings per diluted share | 7.6 | 11.3 |
All relevant prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts. | |
1 | Refer to previously defined adjusted earnings and adjusted earnings per diluted share. |
2 | Amounts excluding currency changes were determined using the same foreign currency exchange rate for the current period as the comparable period in the prior year, which eliminates dollar-based fluctuations driven solely from currency rate changes. |
3 | Net of reinsurance |
4 | Refer to previously defined adjusted net investment income. |
FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as "expect," "anticipate," "believe," "goal," "objective," "may," "should," "estimate," "intends," "projects," "will," "assumes," "potential," "target," "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.
The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:
- difficult conditions in global capital markets and the economy, including inflation and the continued effects caused by COVID-19
- defaults and credit downgrades of investments
- global fluctuations in interest rates and exposure to significant interest rate risk
- concentration of business in
Japan - limited availability of acceptable yen-denominated investments
- foreign currency fluctuations in the yen/dollar exchange rate
- differing interpretations applied to investment valuations
- significant valuation judgments in determination of expected credit losses recorded on the Company's investments
- decreases in the Company's financial strength or debt ratings
- decline in creditworthiness of other financial institutions
- concentration of the Company's investments in any particular single-issuer or sector
- major public health issues, including COVID-19 and any resulting or coincidental economic effects, on the Company's business and financial results
- the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
- deviations in actual experience from pricing and reserving assumptions
- ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives
- interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems
- subsidiaries' ability to pay dividends to the Parent Company
- inherent limitations to risk management policies and procedures
- operational risks of third party vendors
- tax rates applicable to the Company may change
- failure to comply with restrictions on policyholder privacy and information security
- extensive regulation and changes in law or regulation by governmental authorities
- competitive environment and ability to anticipate and respond to market trends
- catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics (such as COVID-19), tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, terrorism or other acts of violence, and damage incidental to such events
- ability to protect the Aflac brand and the Company's reputation
- ability to effectively manage key executive succession
- changes in accounting standards
- level and outcome of litigation
- allegations or determinations of worker misclassification in
the United States
Analyst and investor contact - David A. Young, 706.596.3264; 800.235.2667 or dyoung@aflac.com
Media contact - Ines Gutzmer, 762.207.7601 or igutzmer@aflac.com
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SOURCE Aflac Incorporated