With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-131-Aflac

The insurance company is the largest provider of supplemental insurance in the U.S. and is best known for its payroll deduction coverage.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-146-Aflac

The supplemental health and life insurance provider is based in Columbus, Ga., and has a large business segment in Japan.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

Our 2018 list of the 100 best companies as ranked by their employees. See which companies made the list.

Fortune 100 Best Companies to Work For

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

Our 2017 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

Fortune Global 500

This year's Fortune 500 marks the 63rd running of the list.

We surveyed tens of thousands of young employees to create this list of millennials’ favorite workplaces.

best workplaces for millennials 2017 Aflac

Employees say: 
 
&nbsp; 
 
"One of the best things about this company is the culture of honesty and transparency. If things are trending badly, we know about it and we know the plans that are in place to correct course. Everyone buys into the plan and executes together, as a team. When things are going great, we celebrate wins as a team. It's a great atmosphere—a competitive, winning atmosphere that I'm proud to be a part of." 
 
&nbsp; 
 
"I feel that this is a great place to work mainly because this company gives me opportunities to make a difference while at work. I have gotten the opportunity to be part of the Aflac cancer committee and raise money for Aflac's cancer center in Atlanta. The trip to Atlanta was one of the most meaningful things I have done at work. It is nice to put in everyday work for a company that cares, and it is even better to get to directly contribute and be supported by management." 
 
&nbsp;

100 Best Large Workplaces for Millennials

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

Google/Alphabet is the No. 1 place to work for the seventh time in 10 years. Six newcomers include Veterans United at No. 30, Hilton Hotels at No. 56, and Slalom Consulting at No. 100. IKEA’s U.S. arm returns to the list, along with GoDaddy and Sheetz.

This year's Fortune 500 marks the 62nd running of the list.

Fortune’s second annual list of the 100 Best Workplaces for Women highlights companies with generous benefits, flexible schedules, and an emphasis on balancing work and life. 

100 best workplaces for women 2016- aflac

Employees say: 
&nbsp; 
"Aflac actually makes exceptions to our processes based on specific situations. The work environment is friendly and flexible. There is always something to do. I can go to management if my situation is not being addressed as I feel it should. I am treated as an individual when needed. The teams function as a family. We all work together to support the Aflac brand!! We are family!" 
&nbsp; 
"[I appreciate] the encouragement of work/life balance,and that family and personal health is allowed to come first. Also, the ability of management to see their employees' skill sets and to develop them in the professional direction they would fit best, even if it means going outside their current department." 
&nbsp; 
Read the Great Place to Work review .

100 Best Large Workplaces for Women

The second annual ranking of the best employers for workers 35 and under.

best workplaces for millennials 2016- Aflac

"I love how management is very approachable and attentive to what suggestions you may have. They try to implement them as best they can. I love how the company gives incentives just for being an Aflac employee, such as getting movies tickets at a discount, having valet dry cleaning services, etc. I love how when you go the extra mile you are noticed for it. I just love feeling appreciated and valued. I love Aflac!" says one millennial worker. 
 
&nbsp; 
 
According to another millennial: "Aflac is an amazing place to work. The culture here is like no other. Leadership truly cares about the people, and in turn the people take care of the business." 
 
&nbsp; 
 
Read the .

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year’s list marks Fortune's 18th year of partnering with Great Place to Work. Google ranks No.1 for the sixth time, and 16 new companies make impressive debuts, including Acuity (No. 3), Twitter (No. 24), and Riot Games (No. 13).

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

The inaugural list of the 100 Best Workplaces for Millennials from our partners at Great Place to Work includes surprising newcomer Power Home Remodeling, making an impressive debut at No. 1. Other standouts include Chili’s Grill and Bar (no. 11), Elevation Church (No. 34), and Yelp (No. 41).

BEST COMPANIES 2015  Aflac

Occupying slot number 132 on the Fortune 500 list, Aflac spreads its wings far and wide as one of the nation’s largest insurers. But that doesn’t keep the company from feeling intimate. In addition to a “spot awards” program that recognizes outstanding employee achievements with instant cash, company stock and swag, the company holds a weeklong celebration for its staff every year. The event has included ice skating, mini-golfing, family outings, and more. That’s not all—those who volunteer at or help plan the affair also get invited to a party at CEO Dan Amos’ country farm. As one worker gushes, “We are made to feel special and appreciated.” <a style="color:#ff0000;" href="http://us.greatrated.com/aflac-inc" target="_blank">Read the Great Place to Work review.</a>

Google tops the list once again, marking its eighth appearance and fifth time as No. 1.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Perks

100% health coverage

Unlimited sick days

Telecommuting

Job sharing

Subsidized childcare

Compressed work weeks

Fully-paid sabbaticals

On-site fitness/subsidized gym

On-site medical care facility

Non-discrimination policy includes sexual orientation

Health insurance for part-timers

Sick days for part-timers

College tuition reimbursement

Student loan debt repayment

Medical facility at all locations

Paid Time Off

PTO limit (days)

Compensation

Most common job (for salaried employee)

Hiring/staffing (past 12 Months)

Full-time and part-time job growth

# of job applicants

Avg. # of applicants per opening

FT voluntary turnover

Jobs filled internally

Jobs filled by referral

# New graduates hired

Company Info

Industry

Sector

HQ Location

Company Type

# Work Sites

U.S. Employees

Web Address

Best Companies

Best Companies Rank

Best Companies URL

Millennials In The Organization

# of millennial employees

Millennials as % of total workforce

Women In The Organization

% of Women in the Company

% of Women in Executive/Manager Positions

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Aflac is a leading provider of supplemental health and life insurance solutions. Through its two primary business segments—Aflac Japan and Aflac U.S.—the company delivers a comprehensive portfolio of products, including cancer, medical, nursing care, whole life, and specialized insurance offerings tailored to diverse market needs. Aflac’s distribution strategy leverages a multichannel network encompassing individual agents, corporate partners, banks, brokers, and independent associates, allowing for broad market reach. Established in 1955, the company is known for its innovative product development and commitment to helping clients manage health-related financial risks.

Q2 2026

Q1 2026

Q4 2025

Q2 2025

Q1 2025

Q4 2024

Aflac (AFL): Company Profile, Stock Price, News, Rankings

legacy

Aflac

aflac

Good morning, everyone, and welcome to the Aflac Incorporated Fourth Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star and then one on your touchtone phone. To withdraw your questions, you may press Star and two. Please also note today's event is being recorded. I would now like to turn the floor over to David Young, Vice President of Capital Markets. Please go ahead.

Good morning, and welcome. Thank you for joining us for Aflac Incorporated's fourth quarter 2025 earnings call. This morning, Dan Amos, Chairman, CEO of Aflac Incorporated, will provide an overview of our results and operations in Japan and the United States. Then Max Brodin, Senior Executive Vice President and CFO of Aflac Incorporated, will provide more detail on our financial results for the quarter, current capital, and liquidity. These topics are also addressed in the materials we posted with our earnings release, financial supplement, and quarterly CFO update on our investors.aflac.com. For Q&A today, we are joined by Virgil Miller, President of Aflac Incorporated and Aflac U.S. Charles Lake, Chairman and Representative Director, President of Aflac International. Masatoshi Koide, President and Representative Director, Aflac Life Insurance, Japan, and Brad Dyslin, Global Chief Investment Officer, President of Aflac Global Investments.

Before we begin, some statements in this teleconference are forward-looking within the meaning of federal securities laws. Although we believe these statements are reasonable, we can give no assurance that they will prove to be accurate because they are prospective in nature. Actual results could differ materially from those we discuss today. We encourage you to look at our annual report on Form 10-K for some of the various risk factors that could materially impact our results. As I mentioned earlier, the earnings release with reconciliations of certain non-GAAP measures and related earnings materials are available on investors.aflac.com. I'll now hand the call over to Dan. Dan?

Thank you, David, and good morning, everyone. We're glad you joined us. Aflac Incorporated reported Fourth Quarter net earnings per diluted share of $2.64, and adjusted earnings per diluted share of $1.57. For the year, Aflac Incorporated reported net earnings per diluted share of $6.82, and adjusted earnings per diluted share of $7.49. Max will expand upon these strong results for the quarter in a moment, but before he does, I'd like to comment on our operations. Beginning with Japan, I am very pleased with Aflac Japan's sales increase of 15.7% for the fourth quarter and 16% for 2025. These strong sales results were driven largely by the remarkable 35.6% sales increase, mainly due to Moraito, our latest cancer insurance product, launched in March.

While still early, we are also excited about the positive reception our newest medical product, Anshin Palette, has received since its late December introduction. As part of our ongoing strategy, we also continue to emphasize and promote the importance of third sector protection to new and younger customers with our innovative first sector product, Tsumitasu, which was repriced in September. While premium persistency reflected lapses tied to the launch of Moraito, it still remains strong at 93.1% for the year. Our success with so many policyholders who realize the value of Aflac's products and keep them is a testament to Aflac's reputation, our strategy, and our customers' recognition of the value of our products. By maintaining this level of persistency while adding new premium through sales, we look to offset the impact of reinsurance and policies reaching paid-up status in the future.

Maintaining strong persistency continues to be vital to the future of Aflac Japan. For the year, we also saw an increase in sales through each distribution channel. Being where the customer wants to buy insurance has always been an important competitive strength of our growth strategy in Japan. Our broadened networks of distribution channels, including agencies, alliance partners, and banks, are dedicated to continually optimizing opportunities to help provide financial protection to Japanese consumers. We will continue to work hard to support each channel as we evolve to meet customers' changing needs. Overall, I believe we have put in place the right people and the strategy to meet our customers' financial protection needs through their different stages of life.... Turning to Aflac U.S., we generated nearly $1.6 billion in new sales in 2025, over one-third of which came from the fourth quarter.

More importantly, we maintained strong premium persistency of 79.2% and increased net earned premiums by 2.9% for 2025. We continue to focus on driving our profitable growth by exercising a strong underwriting discipline and maintaining strong premium persistency. We believe this will continue to drive net earned premium growth. At the same time, Aflac U.S. has continued its prudent approach to expense management and maintaining a strong pre-tax margin, as Max will expand upon shortly. In both Japan and the United States, consumers continue to face financial hardships due to increasing out-of-pocket medical expenses. That is exactly where we come in as partners to be there when our policyholders need us most.

As the pioneer of cancer insurance and the leader in the industry, our management teams, employees, and sales networks approach every day as a chance to help our policyholders fill the gap during challenging times, providing not just financial protection, but also compassion and care. At the same time, we generate strong capital and cash flows on an ongoing basis while maintaining our commitment to prudent liquidity and capital management. We continue to be pleased with our investments, producing solid net investment income. As an insurance company, our primary responsibility is to fulfill the promises we make to our policyholders while being responsive to the needs of our shareholders. Our financial strength is the foundation that backs up our promise to our policyholders, balanced with the financial flexibility and tactical capital deployment.

I am very pleased with the company's financial strength, which supports our capital deployment, including the board's decision to increase the First Quarter of 2026 dividend by 5.2%. In 2025, Aflac Incorporated deployed a record $3.5 billion to repurchase 33 million shares of our stock and paid dividends of $1.2 billion. We treasure our 43 consecutive years of dividend increases and remain committed to extending this record. Combining share repurchase and dividends, we delivered nearly $4.8 billion back to the shareholders in 2025. In doing so, we have maintained our position among companies with the highest return on capital and the lowest cost of capital in the industry.

2025 also marked three significant milestones for Aflac: the 70th year since the company's founding, the 30th anniversary of what is now Aflac Cancer and Blood Disorder Center of Children's Healthcare of Atlanta, and the 25th anniversary of the Aflac Duck. Each of these noteworthy milestones demonstrates the staying power of the financial protection Aflac's products help provide and the privilege of helping enrich the lives of millions of people. In today's complex healthcare environment, our relevant products, financial strength, powerful brand, and broad distribution network uniquely positions Aflac as the ideal partner for consumers as they navigate the financial strain from out-of-pocket medical costs. The enduring foundational strengths of our business and our capacity for continued growth in Japan and the U.S., two of the largest life insurance markets in the world, support our leading position and build on our momentum.

I will now turn the program over to Max to cover more details of the financial results. Max?

Thank you, Dan. For the fourth quarter of 2025, adjusted earnings per diluted share increased 0.6% year-over-year to $1.57, excluding effect of foreign currency in the quarter. In this quarter, remeasurement gains on reserves totaled $36 million, reducing benefits. Variable investment income ran $12 million below our long-term return expectations. Adjusted book value per share, excluding foreign currency remeasurement, increased 0.5%. The adjusted ROE was 11.7% and 14.5%, excluding foreign currency remeasurement, a solid spread to our cost of capital. Overall, we view these results in the quarter as solid. Starting with our Japan segment, net earned premiums in yen terms for the quarter declined 1.9%.

Aflac Japan's underlying earned premiums, which excludes the impact of deferred profit liability, paid-up policies, and reinsurance, declined 1.2%. We believe this metric provides a clearer insight into long-term premium trends. Japan's total benefit ratio came in at 65% for the quarter, down 150 basis points year-over-year. We estimate the impact from reserve remeasurement gains to be approximately 110 basis points favorable to the benefit ratio in Q4 2025. Long-term experience trends, as they relate to treatments of cancer and hospitalization, continue to be in place, leading to continued favorable underwriting experience. Persistency remains solid year-over-year and in line with our expectations at 93.1%. With refreshed product introductions, we generally see an uptick in lapse and reissue activity, causing reported lapsation to increase.

We did experience this uptick with our recently launched cancer insurance product, but overall lapses remained within our expectations. Lapses on our first sector savings block remained low and in line with previous periods, despite the increase in yen interest rates. Our expense ratio in Japan was 22% for the quarter, up 120 basis points year-over-year, driven primarily by sales promotion expenses associated with higher sales. For the quarter, adjusted net investment income in yen terms was down 3.9%, primarily driven by lower floating rate income on our U.S. dollar book and lower variable investment income, partially offset by higher U.S. dollar fixed income due to higher volume. The pre-tax margin for Japan in the quarter was 31.3%, down 30 basis points year-over-year. A very good result. Now, turning to U.S. results.

Net earned premiums were up 4%, while premium persistency declined slightly by 10 basis points year-over-year. It remains strong at 79.2%. Our total benefit ratio came in at 48.6%, 230 basis points higher than Q4 2024, driven by prior year endorsements and higher claims activity on our individual voluntary block, as well as a higher benefit ratio on group life and disability. We estimate the reserve remeasurement gains impacted the benefit ratio by approximately 140 basis points in the quarter. Our expense ratio in the U.S. was 40.4%, up 10 basis points year-over-year, primarily driven by timing of spend from previous quarters. Our growth initiatives, group life and disability, network dental and vision, and direct to consumer, increased the expense ratio by 60 basis points in the quarter.

This is in line with our expectations as these businesses continue to scale. Adjusted net investment income in the U.S. was down 2.8% for the quarter, primarily driven by a reduction in floating rate assets and corresponding rates. Profitability in the U.S. segment was solid, with a pre-tax margin of 17.4%, a 230 basis point decrease compared with a stronger quarter a year ago. In Corporate and Other, we recorded a pre-tax adjusted loss of $31 million in the quarter. Total premiums decreased on closed blocks of business. Adjusted net investment income was $1 million higher than last year, due to a combination of lower volume of tax credit investments and higher asset balances.

Our tax credit investments impacted a net investment income line for US GAAP purposes negatively by $43 million in the quarter, with an associated credit to the tax line. The total fourth quarter earnings benefit from tax credit investments was $13 million. Adjusted earnings declined due to lower revenues and higher adjusted expenses, driven primarily by higher costs pertaining to business operations and higher interest expense, partially offset by lower net benefits and claims. We continue to be pleased with the performance of our investment portfolio. During the quarter, we did not record any charge-offs for the commercial real estate portfolio. Additionally, we did not foreclose on any properties in the period. On our portfolio of first lien senior secured middle market loans, we recorded charge-offs of $22 million in the quarter.

For U.S. statutory, we recorded a $3 million valuation allowance on mortgage loans as an unrealized loss during the quarter. On a Japan FSA basis, there were net realized gains of JPY 380 million for securities impairments in Q4, and we booked a valuation allowance of JPY 87 million related to transitional real estate loans. This is well within our expectations and has a limited impact on regulatory earnings and capital. In the third quarter of 2025, we enhanced our liquidity and capital flexibility by $2 billion with the creation of two off-balance sheet pre-capitalized trusts, that issued securities commonly referred to as PCAPS. With increased off-balance sheet capital resources and improved liquidity flexibility, we have lowered our minimum liquidity balance at the holding company by $750 million to $1 billion. This means that Aflac Inc.

Unencumbered liquidity stood at $4.1 billion, which was $3.1 billion above our minimum balance at the end of the quarter. The full PCAP facility remains undrawn. Our adjusted leverage was 21.4% for the quarter, which is within our target range of 20%-25%. As we hold approximately 63% of our debt in yen, this leverage ratio is impacted by moves in the yen-dollar exchange rate. This is intentional and part of our enterprise hedging program, protecting the economic value of Aflac Japan in US dollar terms. Our capital position remains strong. We ended the quarter with an SMR above 970% and an estimated regulatory ESR with the undertaking specific parameter, or USP, of 253%. We estimate that the USP benefits the regulatory ESR by 18 points.

We estimate our combined RBC to be 575%. These are strong capital ratios, which we actively monitor, stress, and manage to withstand market volatility and credit cycles, as well as external shocks. We last updated our ESR sensitivities at our financial analysts briefing in December 2024. Since then, we have seen significant movements in both the dollar/yen and yen interest rates. So we wanted to provide an updated estimates before the ESR comes into effect on March 31st. We have deliberately improved our ALM during this time, which has led to reduced exposure to interest rate risk. We generally have lowered our sensitivities to market risk factors. We've also refreshed the sensitivity analysis related to our combined RBC ratio in the U.S. I will characterize these refreshed estimates also as being in line with what we shared at FAB in December 2024.

Given the strength of our capital and liquidity, we repurchased $800 million of our own stock and paid dividends of $303 million in Q4, offering good relative IRR on these capital deployments. We will continue to be flexible and tactical in the way we manage the balance sheet and deploy capital in order to drive strong risk-adjusted ROE with a meaningful spread to our cost of capital. Before concluding, I would like to address our 2026 outlook. At our 2024 financial analyst briefing, I provided ranges for net earned premiums, benefits and expense ratios, and pre-tax profit margin for each segment for 2025 through 2027. These ranges remain substantially intact for 2026, but with a couple of exceptions. For Aflac Japan, we expect underlying earned premiums to decline 1%-2% in 2026.

We also expect the expense ratio to be in the 20%-23% range. However, we expect the benefit ratio in Japan to be in the 60%-63% range and the pre-tax profit margin to be in the 33%-36% range. In the U.S., we continue to expect net earned premium growth to be in the lower end of the 3%-6% range. We also expect the benefit ratio for 2026 to be in the 48%-52% range, and the expense ratio to be in the 36%-39% range as we continue to scale new business lines. At the same time, we expect pre-tax profit margin for 2026 to be in a range of 17%-20%. Thank you. I will now turn the call back over to David for Q&A.

Thank you, Max. Before we begin our Q&A, we ask that you please limit yourself to one initial question and a related follow-up. You may then rejoin the queue to ask additional questions. We'll now take the first question.

Ladies and gentlemen, we'll now begin that question and answer session. To ask a question, you may press Star and then One. To withdraw your questions, you may press Star and Two. Our first question today comes from Wes Carmichael from Wells Fargo. Please go ahead with your question.

Hey, good morning. Thank you. I had a question on the Japan business, and Max, I think you touched on this a little bit in your prepared remarks, but in particular in the savings products WAYS first sector, you know, we've seen super long yields in Japan rise pretty considerably, and I think more broadly, there's some concern that we could see additional, I guess, surrenders with interest-sensitive products. So curious if you expect higher levels of surrender going forward. I know that was pretty stable recently.

But thank you, Wes, for the question. Yes, obviously, we've seen quite significant moves up, especially at the long end of the yen yield curve, lately. And if everybody is 100% efficient in their behavior, you would expect both demand and potentially lapsation of in-force policies to increase somewhat. We have not experienced that yet, but obviously it's something that we closely monitor and prepare the company for.

Got it. Thank you. My follow-up is just on capital. It seems like you've got a lot of flexibility in terms of regulatory solvency in Japan and the U.S., but also at the parent too, and you continue to be pretty tactical with the buyback. But curious, if once ESR is printed in 2026, is there any change to the thinking around M&A or capital deployment, just given the capital flexibility you have, and, and maybe what could be incremental for you?

You know, from a capital standpoint, we've been traveling with significant capital for quite some time, and we continue to both enhance and increase the flexibility of both the sources and how we can use that as well. When it comes to M&A, that's predominantly an operational and strategic question, and that secondarily is a financial question.

So, the way we evaluate M&A, it really goes through those lenses, and it needs to tick all those boxes. But the fact of the matter is, do we have capital available, if we wanted to do something? That is absolutely true. But I would also acknowledge that we are operating in a relatively narrow niche, both in the United States and in Japan, and to sort of find operational and strategic targets within those niches is relatively difficult to find. So, we continue to obviously evaluate things, but, for the time being, we're very happy with the businesses that we have.

Thank you for the color. Our next question comes from John Barnidge, from Piper Sandler. Please go ahead with your question.

Good morning. Thank you for the opportunity. My question is around Japan. Can you maybe talk about the lower benefit ratio embedded in the guidance? And I think it's based on Japan new business versus the in-force block. I know there's been some repricing and new products being introduced, but how enduring does that benefit seem to be? Thank you.

Thank you, John. So there's a couple of factors that is pushing our benefit ratio down on a GAAP basis in 2026. The first one I will put in a more permanent category, and that is, as we updated our actuarial assumptions in the third quarter of 2025, we lowered the net premium ratio, but by about 130 basis points. That is for the full in-force block, and that it was obviously a one-timer in the third quarter, but it also feeds through into the future net premium ratio as well. So that is directly impacting the benefit ratio for future periods by 130 basis points lower, all things being equal.

The other impact is, with new product introductions that we've seen on our cancer product, and as we now, introduce our medical product, we've seen an elevation on lapse and reissue activity when those product introductions take place. When, you have lapse and reissue increase, the old policies that lapses, we will then release the reserves associated with those, policies, and it runs through our GAAP financials, lowering the benefit ratio. And generally speaking, we have lower reserves on our older policies than the new policies that we are reissuing. So that also has an impact, for us. The last piece is, if you go back and analyze our full in-force, we did sell quite a lot of, life insurance savings policies in the years 2010 through 2016, and this is the old WAYS product.

That waste product runs through our GAAP financials with a very high benefit ratio. On an economic basis, it carries a significantly lower benefit ratio, but on a GAAP basis, it's very high. That block obviously is in runoff, and as that block shrinks, then obviously the mix impact is such that our total benefit ratio is then lower. So I will characterize those three factors as the main factors for the lower benefit ratio expected in 2026.

Thanks, Max. And my related follow-up, sticking with Japan, on distribution, looks like Tsumitasu got repriced and Anshin Palette got introduced. Can you talk about what you see as the total addressable market for these new products? And then within the context of Moraito and annuity, do you need to reprice that? Thank you.

Hi, thank you for your question. This is Yoshizumi speaking from Marketing and Sales division of Aflac Japan. As you mentioned, we went through a rate revision last September. Since then, sales are growing steadily. The purpose of launching Tsumitasu is to respond to the citizens' needs of asset formation, as the government is also promoting people to shift from saving to investment. Our purpose was to encourage those young and middle-aged generation to promote such activities. Our market audience will be those individual customers who seek for yen-denominated level payment products. But in fact, actually, the Tsumitasu is also gaining popularity from middle age to older generation.

…まとまったお金をお持ちの中高年の方にも、売上が伸びるという結果を、いい効果をもたらすことができました。

This is a result from gaining attention and popularity from affluent customers who prefer to pay with the DAP or discounted advanced premium option.

つみたすの特徴です、特徴としてですね、このつみたすのレートというのを、機動的に、適切な時期に、いつでも変えていけるというような商品になっていますので。

One of the Tsumitasu’s strengths is the fact that we can change the premium rate in a timely manner with agility.

この金利環境が変化する中で、金利を上げるべき時が来たら上げると、また、下げるべき時は下げるというようなことをやっていきたいと思っています。

Going forward, whenever we see a necessity, given the interest rate market situation, when time comes, we will increase or decrease our premium rate as necessary.

This is Dan. Let me, let me just make a couple of comments about sales to have a more concise way of you looking at it. Moraito, our newest cancer policy, did terrific, better than we even thought, and we feel like it was a product that was wanted and needed by the consumers, and that's what's driving it. Saying that, we had enormous sales in 2025, and we would expect sales to be more level. Where I think you'll see an increase in sales will be at the medical product. And also, the potential is for Tsumitasu, depending on what interest rates do, but that has the potential.

But overall, cumulatively, we expect a good year in Aflac Japan in regards to sales and the job they're doing. And I want to personally thank all of them on the other end from Japan for the job that they did in 2025 in setting an enormous record for us to work toward again in 2026.

Thank you. Our next question comes from Joel Hurwitz, from Dowling & Partners. Please go ahead with your question.

Hey, good morning. Wanted to touch on U.S. sales. So the overall growth tracked pretty in line with what you guys saw in the first three quarters of the year, but it looks like the supplemental health growth was better, while disability sales were down. Virgil, can you just talk about what you saw in terms of sales in the quarters? And I guess any color on how the group life and disability and dental sales were versus expectations?

Yes, good morning. Thank you, Joel. Yeah, let me just give an overview of sort of the performance throughout, and I'll give you a little bit more detail of some of the numbers behind the scenes. Again, overall, for the year, we did $1.6 billion overall, so I'm pleased with that sales number, how we came out. And when you asked about the VBL specifically, they made up 20% of the overall number. So what am I calling the VBL? Just a reminder, the life, accident and disability, and overall, for the year, that line of business was up 11.3%. Network Dental and Vision, but just the dental product itself for Network was up 48.8% for the year.

Then our direct-to-consumer platform, we refer to as consumer markets, was up 10.5%. So that's where I get the combined 20% of total of the $1.6 billion. So overall, I am very pleased with how those businesses performed, and a lot of that sales in that life and disability was sales of our life product to your point. But again, definitely overall good performance. The other thing I would say to you is, when you look at the year, you know, it was pretty much consistent. We ended up overall 3.1%, but we did have good earned premium growth of 4% during the quarter, right at, you know, 2.9%-3% for the year. Persistency remained strong, 79.2%.

So when I look at the overall, I look at a good, solid, balanced performance for the year for us.

Okay, great. Thank you. And then, Max, just a quick one on ESR. In your prepared remarks, you had said that the uplift from the USP was 18 points. I think the last time you disclosed it was a couple of quarters ago, it was 30 points. Can you just take us through the drivers of the decline in that?

The main, the main driver of that decline is related to the level of yen interest rates. So as yen interest rates go higher, the impact from the USP tends to decline a little bit.

Our next question comes from Jack Matten, from BMO. Please go ahead with your question.

Hi, good morning. I just have one follow-up on the Japan benefit ratio. Any way for us to think about the kind of the statutory or economic margin change that you're seeing? I know there's different dynamics between how the WAYS product accounting works, and the net premium ratio change is also a big driver, but the GAAP update. But just wondering, like, putting it all together, are you still seeing a better trend on a statutory margin basis?

Yeah, so the main difference between the FSA benefit ratio and the US GAAP benefit ratio, it relates to the net premium ratio. So what I referenced there was that the net premium ratio on a US GAAP basis will lower our benefit ratio by roughly 130 basis points in 2026 relative to the first three quarters of 2025. That impact will not occur on an FSA earnings basis, but the other drivers will. So, think about it this way, that essentially when you look at the decline in the benefit ratio in 2026 over 2025, about one-third of that is driven by the lower net premium ratio. The other two-thirds will occur both on US GAAP basis and on an FSA earnings basis.

That's helpful. Thank you. And just a follow-up on your Bermuda entity. I mean, any change to your kind of outlook on how you expect to use that entity over time? I mean, I know you've kind of talked in the past about reinsuring up to 10% of your in-force in Japan. Is that limit something you're still evaluating or could it be revised higher over time?

Yeah. So to date, we've ceded roughly 6% of our Aflac Japan balance sheet to Bermuda. We have a midterm target to get to 10%. We do not think of that as an absolute limit. I think over time, we will risk assess that number and evaluate if there's a higher internal limit that would make sense for us. The bottom line is that we see significant capacity for continuing ceding business between our subsidiary in Japan and our reinsurance affiliate in Bermuda.

Our next question comes from Suneet Kamath from Jefferies. Please go ahead with your question.

Aflac (AFL) Q4 2025 Earnings Call Transcript

Company Participants