Aflac Japan's new annualized premium sales increased by 23.0% to $236 million for the six months ended June 30, 2025, from $192 million in the prior year. This growth was primarily due to the successful launch of the new Miraito cancer insurance product and Tsumitasu.

Aflac U.S. new annualized premium sales rose by 3.1% to $649 million for the six months ended June 30, 2025, compared to $629 million in the prior year. This increase was primarily driven by strong sales of group products, reflecting steady organic expansion.

Aflac Japan continues to promote digital and web-based sales, including the utilization of a virtual sales tool that enables online consultations and policy applications. This demonstrates a strategic focus on technological adoption to improve customer engagement and operational efficiency.

Management swiftly contained a cybersecurity incident identified on June 12, 2025, within hours, ensuring business operations remained unaffected by ransomware. While data exfiltration is being investigated, the prompt response demonstrates robust incident management.

The Company settled its U.S. defined pension plan obligations by purchasing a nonparticipating group annuity contract in January 2025, recognizing a $55 million settlement charge. This action streamlines future liabilities and simplifies benefit plan administration.

While Aflac U.S. improved its adjusted expense ratio through efficiency efforts, Aflac Japan's ratio increased primarily due to higher technology expenses. Additionally, Corporate & Other saw a $30 million rise in expenses, partly due to cybersecurity incident response costs.

An unauthorized network intrusion in June 2025 led to the exfiltration of claims information, health information, social security numbers, and other personal data. This incident creates substantial risks of litigation, regulatory investigations, and reputational harm, with potential for significant future costs.

Gross unrealized losses on available-for-sale fixed maturity securities increased to $5,223 million at June 30, 2025, from $4,128 million at December 31, 2024. These losses are primarily attributed to general market factors like interest rate changes and foreign exchange rates, rather than specific credit concerns.

The Company recognized a $10 million net loss in net investment gains (losses) for the six months ended June 30, 2025, due to foreclosures on transitional real estate loans (TREs) collateralized by commercial properties with an amortized cost of $257 million, highlighting ongoing risks in this market segment.

Aflac Japan continues to hold a dominant position in its market, exceeding 22 million individual policies in force and having agreements to sell products at 358 banks, representing approximately 90% of the total banks in Japan. This indicates broad market penetration and distribution strength.

The successful launch of new cancer insurance products like Miraito and the continued promotion of digital and web-based sales, including virtual sales tools, position Aflac Japan competitively in a market facing continued cost pressure on Japan’s healthcare system.

Aflac U.S. increased its annualized premiums in force by 4.3% to $6.5 billion at June 30, 2025, compared to $6.2 billion at June 30, 2024. This growth reflects sustained demand for its insurance offerings, particularly in group products.

Aflac U.S. successfully decreased its total adjusted expense ratio for the three- and six-month periods ended June 30, 2025, primarily through expense efficiency efforts, demonstrating effective cost management and operational discipline.

Aflac Japan's total adjusted expense ratio increased for the three- and six-month periods ended June 30, 2025, primarily due to higher technology expenses. This indicates ongoing investments in digital infrastructure, which temporarily impact reported efficiency metrics.

Corporate and other adjusted expenses rose by $30 million for the three-month period ended June 30, 2025. This increase includes costs incurred to investigate and respond to the June 2025 cybersecurity incident, impacting overall operational efficiency for the segment.

The Company has deployed $294 million of a $400 million commitment to Aflac Ventures, with a central mission to support organic growth and business development through digital applications. This signals a strong strategic push towards innovation and technological advancement.

Aflac Japan actively promotes digital and web-based sales channels and utilizes a virtual sales tool that enables online consultations and policy applications. These efforts demonstrate a commitment to modernizing its sales processes and improving customer access through technology.

The increase in Aflac Japan's total adjusted expense ratio is primarily attributed to higher technology expenses. This indicates continuous investment in its technological capabilities and digital infrastructure, which is a key component of its strategic growth initiatives.

The Company repurchased $1.7 billion of its common stock (16.4 million shares) during the first six months of 2025. With 30.9 million shares remaining under authorization, this signals continued confidence in its valuation and commitment to shareholder returns.

The board of directors declared a Q3 2025 cash dividend of $0.58 per share, representing a 16.0% increase year-over-year. This action demonstrates management's positive outlook on future cash flow generation and commitment to a balanced capital allocation strategy.

The Parent Company issued ¥74.9 billion in public senior notes and ¥75.1 billion in private placement senior notes in Q2 2025. These issuances, leveraging its U.S. shelf registration, provide financing for general corporate purposes and enhance liquidity.

The Company invests in partnerships specializing in rehabilitating historic structures and installing solar equipment, which generate federal historic rehabilitation and solar tax credits. These investments are classified as limited partnerships and contribute to environmental and social benefits.

The Company has outstanding 1.125% senior sustainability notes due March 2026, with an amortized cost of $399 million. This indicates its engagement in sustainable finance instruments, aligning with broader ESG principles.

The 10-Q does not introduce new or significantly expanded disclosures regarding specific environmental, social, or governance initiatives beyond existing investment activities in tax credit partnerships and sustainability notes. This suggests a consistent but not newly emphasized ESG strategy.

The average yen/dollar exchange rate strengthened by 7.7% in Q2 2025 (144.60) compared to Q2 2024 (155.70). This positively impacted reported adjusted earnings per diluted share by $0.04, partially mitigating the broader negative impact from investment losses.

The Company continues to face difficult conditions in global capital markets, including inflation and interest rate fluctuations, which contributed to significant net investment losses of $1.4 billion for the six months ended June 30, 2025, and lower new money yields.

Japan's Financial Services Agency (FSA) is set to introduce an economic value-based solvency regime (ICS) by March 2026. This necessitates ongoing adjustments to Aflac Japan's capital management and reporting frameworks to ensure compliance.