Financials
Insurance - Life
$55.76B
12.8K
Aflac Incorporated is a supplemental health and life insurance provider, operating primarily in the U.S. and Japan. The company's core business model revolves around offering supplemental insurance products, with a focus on cancer and medical insurance in Japan, and accident, disability, and critical care insurance in the U.S. Aflac's competitive advantages include a well-known brand, a large distribution network, and low-cost operations, particularly in Japan.
Key insights and themes extracted from this filing
Total revenues decreased by 2.3% to $18.7 billion in 2023, compared to $19.1 billion in 2022. This was primarily due to a decrease in net earned premiums.
Net earnings per diluted share increased to $7.78 in 2023, compared to $6.93 in 2022. This was primarily due to net investment gains.
The company repurchased $2.8 billion, or 38.9 million of its common shares in 2023. At December 31, 2023, the company had 77.7 million remaining shares authorized for repurchase.
The Company's strategy is to pursue growth through product development and distribution expansion and to achieve efficiencies by modernizing its technology and streamlining its operations.
In Japan, the Company is cultivating an innovation-driven culture to meet the rapidly changing customer and societal needs.
In the U.S., the Company continues to make broad-based investments in digital enhancements and innovation within the U.S. platform.
The Company's objectives in 2024 are to maintain strong pretax margins with increased sales production through product refreshment in its Aflac Japan segment and to begin realizing benefits from its buy to build initiatives and other platform investments.
The Company intends to maintain a minimum SMR of 500% for Aflac Japan and a target combined RBC over time of approximately 400% for Aflac U.S., consistent with the Company's risk management practices.
The Company intends to maintain a minimum SMR of 500% for Aflac Japan and a target combined RBC over time of approximately 400% for Aflac U.S., consistent with the Company's risk management practices.
Difficult conditions in global capital markets and the economy could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business.
The Company is exposed to significant interest rate risk, which may adversely affect its results of operations, financial condition and liquidity.
The Company's concentration of business in Japan poses risks to its operations and financial condition.
However, based on Aflac Japan's size of annualized premiums in force and diversified distribution network, the Company believes it is well-positioned to continue to adapt to increased competition.
Aflac U.S. believes that its products are distinct from competitive offerings given its product focus (including features, benefits and claims service model), distribution capabilities and brand awareness.
Since Aflac products provide an additional level of financial protection for policyholders, the Company believes the increased financial exposure some employees may face creates a favorable opportunity for Aflac U.S. products.
The success of the Company's business depends in part on effective information technology systems, on continuing to develop and implement improvements in technology, and on successful execution of revenue growth and expense management initiatives.
The Company believes the continued development and maintenance of operating efficiencies will allow Aflac Japan to offer affordable products that appeal to consumers.
The Company's strategy to drive long-term shareholder value is to pursue growth through product development and distribution expansion and to achieve efficiencies by modernizing its technology and streamlining its operations.
As such, the Company is investing in technology and other capabilities to continuously enhance its customer experience, while also seeking to increase efficiencies.
The Company is also developing new and innovative products and enhancing existing products.
The Company will continue to incur expenses related to, among other things, investments in digital capabilities and product innovation including the development and use of artificial intelligence (AI).
The Company intends to maintain strong capital ratios in Aflac Japan and Aflac U.S. in support of its commitment to shareholder dividends while remaining tactical in its deployment of capital in the form of share repurchases and opportunistic investments.
The Company intends to maintain a minimum SMR of 500% for Aflac Japan and a target combined RBC over time of approximately 400% for Aflac U.S., consistent with the Company's risk management practices.
In 2023, Aflac Incorporated repurchased $2.8 billion, or 38.9 million of its common shares. At December 31, 2023, the Company had 77.7 million remaining shares authorized for repurchase.
In 2023, Aflac Japan was certified, for the sixth consecutive year, as one of the top 500 Leading Companies in Health and Productivity Management under the Certified Health & Productivity Management Outstanding Organizations Recognition Program with Japan's Ministry of Economy, Trade and Industry.
As of December 31, 2023, women account for 54% of Aflac Japan employees and 33% of those in leadership roles. Women also held 20% of senior management roles. Aflac Japan's goal is to further increase the percentage of women in line manager positions by 2025.
Established in 2009, Aflac Heartful Services Co., Ltd. (Aflac Heartful Services), a subsidiary of Aflac Japan, promotes the hiring of employees with disabilities.
With Japan's aging population and the rise in healthcare costs, supplemental health care insurance products remain attractive.
Trends indicate existing customers and potential customers seek cost-effective solutions that are easily understood and can be accessed through technology-enabled devices.
In the U.S., competition exists for sales associates and brokers with demonstrated ability. Further, low rates of unemployment, such as those currently reflected in the U.S. employment market, tend to make it more difficult for Aflac U.S. to maintain its network of sales associates.