AFL

This article first appeared on GuruFocus. Revenue: $35.5 million, up 29% on the prior year, a new high for the company. Underlying Profit: $1.82 million normalized net profit before tax attributable, up 32% from $1.38 million. Second-Half Revenue: $17.7 million, relatively flat compared to first-half revenue of $17.8 million. Practice Area Growth: Family law grew 23%, contested wills and estates grew 27% (up $900,000), and criminal law grew 151% (with four months non-comparable). Average Weekly Revenue: $683,000 per week for FY26, with Q4 hitting $694,000 per week. Lawyer Numbers: Average lawyer numbers were around 66 in FY26, up from about 56 in FY25. Normalization Adjustments: Totaled $1.26 million, including Project Titan implementation costs of just over $1 million and legal defense costs of $400,000. Cash Flow: Cash closed the year about $1.2 million less than FY25, impacted by delayed billing and Project Titan costs. Borrowings: Unchanged at $6.5 million under the NAB facility, which runs through January 2027. FY27 Outlook: Average weekly revenue for the first eight weeks is over $730,000, with no normalizing adjustments expected. Warning! GuruFocus has detected 6 Warning Signs with ASX:AFL. Is ASX:AFL fairly valued? Test your thesis with our free DCF calculator. Release Date: September 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue reached a record $35.5 million, up 29% year-over-year, with strong growth across all practice areas. Underlying profit increased 32% to $1.82 million, marking four consecutive years of growth. Project Titan, the new practice management system, went live on time and within budget, providing a scalable platform for future growth. The company achieved an 85% Great Place to Work certification, up from 53% in August 2023, enhancing its ability to attract senior talent. Early FY27 performance is strong, with average weekly revenue exceeding $730,000 in the first eight weeks, and no major one-off costs expected in the year. Second-half revenue was flat compared to the first half, impacted by Project Titan disruption and a dip in revenue post go-live. Second-half profit dropped by $700,000 due to one-off costs, including Project Titan disruption, senior management restructure, and increased provisions for debtors and WIP. Cash flow lagged in FY26, with a $1.2 million decrease in cash reserves, partly due to delayed billing and collections from the system go-live. The company faces a working capital drag from the growth in contested wills and estates, which has a longer cash conversion cycle of around 15 months. The NAB facility of $6.5 million matures in January 2027, requiring refinancing, and the company has not yet finalized an extension, though discussions are ongoing. Q: Will AF Legal need to raise capital for refinancing its NAB facility?A: CEO Christopher McFadden and Non-Executive Director Peter Johns confirmed that discussions with NAB are comfortable and positive. The company is in a far stronger financial position than when the facility was established. The likelihood of a capital raise is "extremely unlikely," with the board strongly against any dilution of investors. The main consideration for the facility renewal is supporting the working capital growth of the contested wills and estates division. Q: What went wrong with the provisioning for debtors and WIP, and how will this be prevented from recurring?A: CFO David Kahn explained that the increase was not due to a spike in bad debts but a deliberate, comprehensive, matter-by-matter review of all debtors and WIP. This was prompted by the new system's insights and a fresh perspective. The board commissioned a top-tier accounting firm to review the process, leading to the implementation of a general provision on WIP in addition to specific provisions. Management is confident the balance sheet is now clean and appropriately provisioned, with no further significant impacts expected. Q: Why was the senior management restructure not flagged at the half-year, and what did it entail?A: CEO Christopher McFadden stated the restructure was underway at the half-year but was not discussed as it was incomplete. The changes were made to enhance business partnering, with the appointment of David Kahn as CFO and a new General Manager of HR. The restructure cost approximately $300,000, which was absorbed in the second-half results and is not expected to recur. Q: What is the strategy regarding the Amara Family Law brand and the future of the 51% ownership in the Northern Territory (Withnalls)?A: The Northern Territory operations have been split. The 49% shareholder now operates a high-end practice under the new "Amara Family Law" brand, while AF Legal's wholly-owned subsidiary continues with a team of more junior lawyers under the AFL Withnalls brand to target the broader market. The company also introduced a senior criminal lawyer in Darwin. The existing put option obligates AF Legal to buy out the remaining 49% of the Amara entity, which is a planned use of cash. Q: What is the company's dividend policy and capital allocation strategy for FY27?A: Non-Executive Director Peter Johns stated that the board's priority for FY27 is to direct cash to paying down debt, supporting the working capital growth of the contested wills and estates business, and funding the buyout of the Darwin (Withnalls) put option. Dividends are not on the table in the near term, but the aim is to build a stronger balance sheet to enable future payouts. Q: What are the expectations for free cash flow, lawyer headcount, acquisitions, and CapEx in FY27?A: The company expects to generate positive free cash flow in FY27. There is no set target for net lawyer additions, but a net gain is expected. There are no acquisitions currently in the pipeline, though the company remains open to opportunities. CapEx is expected to be similar to or lower than FY26's $500,000, as there are no major office openings planned. Q: What were the key reasons for the nine lawyers leaving in H2, and how does the company manage turnover?A: CEO Christopher McFadden explained that of the nine departures, four were junior lawyers seeking different areas of law, two left to become barristers, and others left for personal reasons. The company maintains a supportive culture and keeps in touch with departing staff, which has resulted in 8-10 former employees returning. CFO David Kahn noted that a 20-25% turnover is standard in professional services, and the high number of returning employees is a positive indicator of the company's culture. Q: What is the expected timing and outcome of the ongoing regulatory investigation?A: CEO Christopher McFadden stated that final written submissions are imminent, and a final position is expected before the end of the calendar year. While the outcome is uncertain, the company's advisors are confident of a favorable result. The board noted that the matters date back to 2022 and that the practitioners have had no subsequent complaints, indicating no institutional issue. Q: Where do you see the biggest opportunities to improve financial performance, particularly around working capital and cash conversion?A: CFO David Kahn highlighted that the new practice management system (Project Titan) provides better insights to manage WIP and debtors, improving cash conversion. The focus for FY27 is on streamlining processes and ensuring timely collections. With most one-off costs behind them, the company expects to consolidate and grow profitability, with organic growth being the primary driver. Q: Can you provide an update on the early FY27 revenue performance and the outlook for profit growth?A: CEO Christopher McFadden reported a very encouraging start to FY27, with average weekly revenue of over $730,000 for the first eight weeks, rising to approximately $770,000 post-school holidays. This compares favorably to the FY26 average of $683,000. The company expects solid revenue growth and bottom-line growth at more than double the rate of revenue growth, with few, if any, one-off costs expected in FY27. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Aflac stock has delivered strong long term gains over the past five years, yet the current valuation signals are split between what the market is paying and what an intrinsic value estimate suggests the shares may be worth. The Excess Returns model points to a discount to intrinsic value, while earnings based multiples indicate the stock is priced more richly. A roughly 129.5% total return over five years highlights how Aflac has already rewarded patient shareholders, which raises the bar for any further upside from here. Future cash flow from Aflac's insurance book can support the valuation if underwriting discipline and capital returns stay on track. However, any sustained pressure on investment income or claims experience may weigh on what investors are willing to pay. On broader checks, the stock earns a mixed value score of 3 out of 6, which points to a valuation picture that is neither a clear bargain nor clearly expensive. For investors, the debate is whether Aflac's share price already reflects these gains and mixed signals or whether the current discount to the intrinsic value estimate still leaves meaningful room for further returns. Compare how Aflac stacks up against other insurers by reviewing a hand picked set of companies on the solid balance sheet and fundamentals stocks screener (51 results) The Excess Returns model looks at what Aflac earns on its equity compared with the return that shareholders require. For Aflac, the inputs point to a company that is estimated to earn more on its book value than its modeled cost of equity, which creates an estimated intrinsic value of $168.62 per share. The model uses a book value of $60.35 per share and a stable EPS of $8.25 per share, based on future return on equity estimates from 5 analysts. Against a cost of equity of $4.48 per share, this implies an excess return of $3.78 per share and an average return on equity of 13.34%. With a stable book value assumption of $61.85 per share, the Excess Returns framework suggests the current share price is at a 31.1% discount to this intrinsic value estimate, so Aflac screens as undervalued on this approach. On the Excess Returns model, Aflac stock appears undervalued relative to its estimated intrinsic value of $168.62 per share. Our Excess Returns analysis suggests Aflac is undervalued by 31.1%. Track this in your watchlist or portfolio, or discover 49 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Aflac. P/E is the most commonly watched measure for Aflac because earnings remain a central anchor for how investors value insurers. It gives a quick sense of how much you are paying for each dollar of current earnings. Aflac currently trades on a P/E of about 12.0x. That sits slightly above the Insurance industry average of about 11.4x and below the broader peer group average of around 16.0x. A tailored fair P/E ratio for Aflac, which looks at its sector, size, margins, and risk profile, comes out at roughly 10.0x. Against that benchmark, the stock trades at a premium, since the present multiple is more than one turn higher than this fair level. For investors comparing different insurers on earnings, this suggests that the market is already paying up for Aflac relative to what this model indicates as a reasonable P/E anchor. On the P/E multiple, Aflac stock screens as overvalued compared with the fair ratio implied by its fundamentals and industry context. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where the Aflac valuation puzzle leaves off by spelling out which assumptions about Aflac's future growth, margins and earnings would need to hold for the stock to be worth materially more or less than the current share price. Each Narrative links a fair value estimate to a clear story about Aflac's potential catalysts and risks so you can track over time which version of events appears to be unfolding on the Community page. You can add your voice to the Aflac story by publishing a Narrative that presents your number driven case on where its growth, margins and execution go from here. Share your view with the Simply Wall St community and track how it holds up as new results arrive. Do you think there's more to the story for Aflac? Head over to our Community to see what others are saying! Aflac looks undervalued on the Excess Returns intrinsic value estimate, yet the stock screens as overvalued on its P/E multiple compared with a tailored fair ratio. That split mainly reflects different weight on long term returns on equity and capital efficiency versus what investors are currently willing to pay for earnings relative to peers. With broader checks sitting in the mixed zone, the key question is whether Aflac can keep delivering return on equity that supports the intrinsic value view without stretching earnings expectations further. The crux for investors is whether the current discount is compensation for risk or an opportunity if underwriting and capital allocation stay disciplined. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AFL. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Globe Life Inc. GL is benefiting from strong momentum in its health insurance business. Rising healthcare spending, strong Medicare Supplement demand, rate increases and expanding distribution are driving growth and creating a foundation for higher earnings. Health premium revenues increased 16% year over year in the second quarter of 2026. United American's health premiums rose 29%, while Family Heritage's increased 9%. Health insurance accounted for 34% of total premium revenues, up from 31% a year earlier, highlighting its growing contribution to Globe Life's business. Rising healthcare spending could further support demand for supplemental health coverage. The Centers for Medicare & Medicaid Services projects national health expenditures to grow 5.4% annually through 2034. Strong Medicare Supplement sales are supporting Globe Life's health premium growth, while approved rate increases on individual health products are expected to generate approximately $65 million of additional premium. Globe Life's distribution network provides another growth driver. In the second quarter of 2026, Family Heritage's average producing agent count increased 7%, supporting broader customer reach and health sales. However, medical inflation remains a challenge for Accident & Health insurers. Higher medical costs can pressure claims and underwriting margins, although Globe Life's rate increases should help offset some of this pressure. Overall, strong demand, favorable rates and expanding distribution should support Globe Life's health business. The Health Insurance segment is becoming an important contributor to GL's premium growth, underwriting profitability and earnings momentum. Aflac Incorporated's AFL supplemental health business remains a key driver of its growth, with products designed to help customers cover expenses not fully paid by major medical insurance. The company is benefiting from demand for supplemental coverage as healthcare costs rise, while its broad distribution network supports policy sales and premium growth. Net earned premiums increased 2.3% in the second quarter of 2026. CNO Financial Group's CNO health business provides supplemental health and Medicare Supplement products to middle-income Americans. Health collected premiums increased 5.5% year over year to $432 million in the second quarter of 2026. Its health business benefits from demand for products that help customers manage healthcare expenses and financial protection needs. Shares of GL have gained 22.7% in the past year compared with the industry’s growth of 10.9%. Image Source: Zacks Investment Research The stock is undervalued compared with its industry. It is currently trading at a price-to-earnings value multiple of 10.54, lower than the industry average of 13.13X. It has a Value Score of B. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Globe Life’s 2026 earnings per share (EPS) indicates a year-over-year increase of 8.2%. The consensus estimate for revenues is pegged at $6.40 billion, implying a year-over-year improvement of 6.3%. The consensus estimate for 2027 EPS and revenues indicates an increase of 5.1% and 6.1%, respectively, from the corresponding 2026 estimates. The Zacks Consensus Estimate for 2026 earnings moved 0.4% north, while 2027 earnings have moved 0.6% south over the last 30 days. Image Source: Zacks Investment Research GL stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Globe Life Inc. (GL) : Free Stock Analysis Report CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report Aflac Incorporated (AFL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Aflac’s second quarter results were met with a negative market reaction, as sales declined year-over-year despite meeting Wall Street’s expectations. Management attributed the drop in revenue largely to tough comparisons in Japan following last year’s launch of the Miraito cancer insurance product, as well as shifting consumer preferences. CEO Daniel Amos emphasized that, while sales in Japan were down this quarter, new offerings like Tsumitasu and Anshin Palette produced solid growth. In the U.S., sales growth was modest but supported by strength in group voluntary products and network dental and vision, with disciplined expense management helping to preserve margins. Is now the time to buy AFL? Find out in our full research report (it’s free). Revenue: $4.22 billion vs analyst estimates of $4.23 billion (6.9% year-on-year decline, in line) Adjusted EPS: $1.75 vs analyst estimates of $1.76 (in line) Market Capitalization: $60.53 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Ryan Krueger (KBW): asked about the sustainability of Aflac’s asset repositioning efforts. Bradley Dyslin, Global Chief Investment Officer, said there are more opportunities ahead due to the higher rate environment and that the team will continue to pursue these moves. Thomas Gallagher (Evercore): inquired about Aflac’s appetite for larger M&A deals. CEO Daniel Amos replied the company remains open to strategic opportunities but will be disciplined, favoring smaller deals that fit operationally and financially. Suneet Kamath (Jefferies): questioned sequential declines in Japanese medical sales despite new product launches. Koichiro Yoshizumi, Aflac Japan’s Head of Marketing, explained that strong initial sales post-launch drove a high Q1, and momentum is expected to continue through the year. Michael Ward (UBS): asked if inflation and higher rates in Japan affected policy lapse rates. CFO Max Broden said lapses have not materially increased and recent changes are mostly due to product launches rather than economic conditions. Wilma Jackson Burdis (Raymond James): sought detail on the capital freed by expanding Japanese reinsurance. Broden indicated that the impact depends on product mix and block age, with greater benefits expected from medical business but no simple rule of thumb. Looking ahead, the StockStory team will be watching (1) how the new product launches in Japan, particularly Tsumitasu and Anshin Palette, impact sales momentum and cross-selling rates; (2) whether the U.S. group business can sustain growth and drive higher adoption of dental and vision products; and (3) the effectiveness of continued investment portfolio repositioning in supporting net investment income and capital efficiency. Persistent inflation and evolving reinsurance strategies will also be key areas of focus. Aflac currently trades at $120.60, down from $126.66 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:00 a.m. ET Senior Vice President, Capital Markets - David Young Chairman and Chief Executive Officer - Daniel Amos Senior Executive Vice President and Chief Financial Officer - Max Broden President of Aflac Incorporated and Aflac U.S. - Virgil Miller Chairman and Representative Director, President of Aflac International - Charles Lake President and Representative Director, Aflac Life Insurance Japan - Masatoshi Koide Deputy President and Director, Aflac Life Insurance Japan - Shinsuke Morimoto Global Chief Investment Officer, President of Aflac Global Investments - Brad Dyslin Marketing and Sales, Aflac Japan - Koichiro Yoshizumi Operator: Good day, and welcome to the Aflac Incorporated Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to David Young, Senior Vice President, Capital Markets. Please go ahead. David Young: Good morning, and welcome. Thank you for joining us for Aflac Incorporated's Second Quarter 2026 Earnings Call. This morning, Dan Amos, Chairman and CEO of Aflac Incorporated, will provide an overview of our results and operations in Japan and the United States. Then Max Broden, Senior Executive Vice President and CFO of Aflac Incorporated, will provide more detail on this quarter's financial results, including our capital and liquidity. These topics are also addressed in the materials we posted with our earnings release, financial supplement and quarterly CFO video update on investors.aflac.com. For Q&A today, we are also 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; Shinsuke Morimoto, Deputy President and 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 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-U.S. GAAP measures and related earnings materials are available on investors.aflac.com. I'll now hand the call over to Dan. Dan? Daniel Amos: Thank you, David, and good morning, everyone. We're glad you joined us. The second quarter added to the first quarter's solid financial start. Aflac Incorporated reported net earnings per diluted share of $1.63 and adjusted earnings per diluted share of $1.75. These results reflect the focused execution of our strategy, thus creating long-term value for the shareholders. Starting with Aflac Japan. As we told you, we were up against a strong second quarter in 2025 sales comparison following the launch of Miraito cancer insurance. As a result, sales declined 5.6% to JPY 11 billion (sic) [ JPY 19.6 billion ] in the quarter, but sales were up 7% for the first half of the year. This reflected strong sales results of Tsumitasu and brings sales in line with our expectations for the first half of the year. As part of our ongoing strategy, we continue to promote the importance of third sector protection to new and younger customers with our innovative first sector savings-type life insurance product, Tsumitasu. During this quarter, both the refreshed Tsumitasu, new product, and Anshin Palette, medical insurance product, which we launched in December of 2025, delivered strong sales growth year-over-year. As a result, we continue to expect Aflac Japan sales to exceed 2025. For the quarter, premium persistency was 92.7%, which was in line with last quarter. By maintaining strong persistency while adding new premium through sales, we seek to offset the impact of lapses and reissue as well as policies reaching paid-up status. Our wide-ranging network of distribution channels, including agencies, alliance partners and banks, continually leverage opportunities to help provide financial protection to Japanese consumers. We view each channel as a distinct avenue to reach Japanese consumers in different demographics and stages of life. With this in mind, we evaluate and support each one with unique opportunities to help provide Japanese citizens with financial protection. Turning to Aflac U.S. We continue to focus on pursuing profitable growth with an eye on maintaining strong underwriting discipline and premium persistency. We generated a 2.6% increase in year-over-year sales in the second quarter. We are seeing momentum within our group business, especially our group voluntary products and network dental and vision. We generated a 2.3% increase in net earned premium for the quarter and maintained strong premium persistency of 79.4%. At the same time, Aflac U.S. has continued its prudent approach to expense management and maintained a solid pretax margin of 20.9%. As public insurance companies, our primary responsibility is to fulfill the promises we make to our policyholders while being responsive to the needs of the shareholders. We continue to be pleased with our investments, producing solid investment income. Our operations generated strong capital and cash flows on an ongoing basis as we remain committed to prudent liquidity and capital management. This financial strength is the foundation that backs up our promise to the policyholders, balanced with financial flexibility and tactical capital deployment. I am pleased with the company's financial strength, which supports our capital deployment. We treasure our 43 consecutive years of dividend increases and remain committed to extending this record in 2026. Combining share repurchase and dividends, we delivered $1.3 billion back to the shareholders in the second quarter and $2.6 billion for the first 6 months. In doing so, we have maintained our position among companies with the highest return on capital and lowest cost of capital in the industry. We continue to pursue more profitable growth and the tactical opportunistic deployment of capital. The Japanese and U.S. insurance markets are 2 of the best insurance markets in the world. Both share characteristics that make them well suited to the products we offer. Across Japan and the United States, consumers are feeling the strain of increasing out-of-pocket medical expenses. That's exactly where our products can help. As you have heard me say many times before, I believe the need for our products is actually more compelling in this type of environment because the financial risk to the household becomes more pronounced and more impactful. As a pioneer in cancer insurance and leader in the industry, our employees, sales teams and sales partners show up every day to help ease that burden, providing financial protection with genuine compassion and care. The ongoing foundational strength of our business and our capacity for continued growth support our leading position and build on our momentum. I'll now turn the program over to Max to cover more details of the financial results. Max? Max Broden: Thank you, Dan. For the second quarter of 2026, adjusted earnings per diluted share increased 1.1% year-over-year to $1.80, excluding effect of foreign currency in the quarter. In this quarter, remeasurement gains on reserves totaled $46 million, reducing benefits, with $7 million, or $0.01 per diluted share, below plan. Variable investment income ran $72 million, or $0.11 per diluted share, below our long-term return expectations. We also released a $26 million expense contingency with lowered expenses in our U.S. segment, benefiting results by $0.04 per share. Adjusted book value per share, excluding foreign currency remeasurement, decreased 4.1%. The adjusted ROE was 12.7% and 16.6%, 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 3.7%. Aflac Japan's underlying earned premiums, which excludes the impact of reinsurance, paid-up policies and deferred profit liability, declined 1.4%. Japan's total benefit ratio came in at 64% for the quarter, down 250 basis points year-over-year. We estimate the impact from reserve remeasurement gains were under plan by approximately 60 basis points. We continue to have favorable trends in cancer and hospitalization. Recognizing that the year-to-date benefit ratio is 63.4%, we now expect to be at the high end of our guidance range of 60% to 63% for the full year of 2026, excluding the annual actuarial assumption review in Q3. Persistency remains solid and in line with our expectations at 92.7%. We have continued to experience somewhat elevated lapse and reissue activity on recently launched products as we have expanded coverage options and competitiveness on our new products. 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 20.2% for the quarter, down 40 basis points year-over-year. This is a strong result, especially on the back of the current inflationary pressures in Japan. For the quarter, adjusted net investment income in yen terms was down 2.9%, primarily driven by lower call income and lower dollar-denominated floating rate income, partially offset by higher income on U.S. dollar assets due to the weakening of the yen and higher dollar-denominated fixed rate income. The pretax margin for Japan in the quarter was 34.3%, up 230 basis points year-over-year, a very good result. As we previously discussed, Aflac Japan set an internal reinsurance target of up to 10% of U.S. GAAP assets. We have revisited this target and aligned it with an FSA perspective of up to 30% of FSA reserves. This will allow us to continue to reduce risk, improve balance sheet efficiency and ultimately generate a higher ROE for Aflac Japan and the group. Turning to U.S. results. Net earned premiums were up 2.3%. We expect our net earned premium growth rate for 2026 to be just below our guidance range of 3% to 6% versus previous guidance for the low end of this range. We continue, though, to expect our 2025 to 2027 net earned premium CAGR to be within the range of 3% to 6%. Premium persistency remains solid at 79.4%, up 20 basis points year-over-year. Our total benefit ratio came in at 49.5%, 220 basis points higher than Q2 2025, driven by an increase in incurred group disability claims in the quarter relative to favorable results in the previous quarter. We estimate that reserve remeasurement gains impacted the benefit ratio by about 30 basis points above plan. Our expense ratio in the U.S. was 36.1%, down 20 basis points year-over-year. Adjusted net investment income in the U.S. was essentially flat, up 0.5% for the quarter, as higher call and fixed rate income were offset by lower floating rate and short-term income. Profitability in the U.S. segment was solid with a pretax margin of 20.9%, a 160 basis point decrease compared with a strong quarter a year ago. Corporate and Other reported a pretax adjusted loss of $10 million, down from a $20 million gain last year. The main drivers were lower adjusted net investment income from lower short-term income and reduced hedge benefits that were partially offset by higher fixed rate income. Although our tax credit investments impacted the adjusted net investment income line for U.S. GAAP purposes negatively by $6 million in the quarter with an associated credit to the tax line, the overall tax credit investment program benefited net earnings by $8 million. Higher interest expense and runoff impacts from our closed blocks of business also contributed to the net loss for the quarter. We're pleased with our overall performance of our investment portfolio. Our private credit portfolio, most notably our middle market loan portfolio, continues to deliver strong risk-adjusted net yields. During the quarter, our global investments team were quite active, repositioning $4.8 billion of the portfolio through switch trades to capture the benefit of higher yields and further strengthen the overall quality of our consolidated portfolio. These trades capture foreign currency gains to minimize market losses on lower-yielding assets, reduce the risk of future FSA impairments, improve our ALM and boost net investment income. On an annualized basis, we expect this program to increase net investment income by over $50 million on a run rate basis with a very limited impact on capital levels. We will continue pursuing opportunities that improve the overall health and performance of the portfolio. For U.S. statutory, we've recorded $11 million of impairments on invested assets and $1 million valuation allowance on our mortgage loans as an unrealized loss during the quarter. On a Japan FSA basis, we booked securities impairments of JPY 15.8 billion and an additional valuation allowance of JPY 33 million related to transitional real estate loans in Q2. This is well within our expectations and has a limited impact on regulatory earnings and capital. Aflac Inc. unencumbered liquidity stood at $3.3 billion, which was $2.3 billion above our minimum balance of $1 billion at the end of the quarter. Our adjusted leverage was 21.8% for the quarter, which is within our target range of 20% to 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 U.S. dollar terms. Our capital position remains strong. We ended the quarter with an estimated regulatory ESR of 226%. If including the undertaking specific parameter, or USP, this would add 14 points to the regulatory ratio and result in an ESR with USP of 240%. The decline quarter-over-quarter was primarily driven by significant subsidiary dividends. We estimate our combined RBC to be slightly above 600%. These are strong capital ratios, which we actively monitor, stress and manage to withstand both market volatility and credit cycles as well as external shocks. Given the strength of our capital and liquidity, we repurchased $983 million of our own stock and paid dividends of $309 million in Q2, 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. Thank you, and I will now turn the call back over to David. David Young: 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. [Operator Instructions]. Operator: [Operator Instructions] The first question today comes from Ryan Krueger with KBW. Ryan Krueger: My first question was on the asset repositioning that you did during the quarter. Maybe, I guess, first, maybe a little bit more detail on what you did, but then probably more importantly, to what extent do you see additional opportunities to do more of this going forward? Bradley Dyslin: Yes. Thank you, Ryan. This is Brad. Yes, we were -- I'm very pleased that we were able to reposition about 5% of our portfolio in a single quarter. Obviously, we're solving for multiple objectives here. Income is an important driver as our losses as you sell the lower-yielding assets from prior periods. But we also have to manage taxes, liquidity, ALM, et cetera. So it's a pretty complex puzzle that we have to solve. What we were able to do this quarter was harvest gains from foreign currency on our dollar portfolio in Aflac Japan and use that to offset losses on some of those older bonds, both in our U.S. dollar portfolio, but also our JGB portfolio. We repositioned in both of those sectors. Most of the activity was in Aflac Japan, but we also touched Aflac U.S. and Aflac Bermuda with some adjustments to the portfolio there as well. In terms of the forward look, there's a reason insurance companies are often referred to as buy and hold, not my favorite term, by the way, but it is a complex puzzle to solve. But when you can crack the code, you can have a pretty significant impact as we saw this quarter. And we see a very big opportunity in front of us from the higher rate environment. And we didn't stop working on June 30. So we're not going to -- we're going to do our best not to waste this opportunity, and I look forward to talking more about it in third quarter. Ryan Krueger: Okay. And on first sector sales in Japan, you had strong sales there. I think demand is generally increasing for first sector type products given the higher rate environment there, but you've always been a third sector company. So I was curious, is there any practical limit in your view of what percentage or amount of your Japan sales you'd be willing to have come from the first sector, given kind of there's probably a bigger growth opportunity there if you wanted it? Max Broden: Let me -- look, this is Max. Let me start, and then I'll ask Japan to add some commentary to this. From a group standpoint, we don't have a certain or specific set limit of our mix between third sector and first sector business. The primary driver for us is the return that we can get on certain products and the risk that comes with those products. Right now, we are getting very good risk-adjusted return on the first sector business that we are writing today. So we're very, very pleased with adding that to our portfolio. Overall, though, we do acknowledge that our in-force is predominantly driven by third sector business. And that's a business that is very stable, predictable, and it has risks that we are very comfortable with. And the first sector business adds a different type of risk profile to our business, i.e., mortality, spread and to some extent, longevity risk. So when we add that to our existing balance sheet, that is in relatively small portions, it's actually quite good for us from a diversification benefit standpoint. But if it gets too high, those risks can actually be risk increases overall for us. At this point, the first sector in-force is less than 20% of our total in-force, and it has been declining for quite a period of time, essentially since 2016 when we exited the WAYS business when JGB yields went negative. But as of right now, we are starting to see very good returns on the first sector business, and we're very happy with the business we're selling. Masatoshi Koide: [Interpreted] This is Koide speaking from Aflac Japan. As Max has described, Tsumitasu, our first sector product accounts for 20% of the total sales. But it's not that we set a specific target or upper limit in terms of the first sector product sales. Tsumitasu is contributing in expanding our platform -- our customer base to younger generation, and it's been well received by those younger customers today. And Tsumitasu is also making a great deal of contribution in expanding our sales in cancer and medical insurance through concurrent sale. So we remain to be the third sector-oriented company, but Tsumitasu is definitely playing an important role from a strategic perspective. Operator: The next question comes from Tom Gallagher with Evercore. Thomas Gallagher: Dan, just wanted to start with a high-level M&A question for you. So historically, Aflac has done small deals. Should we expect that to be the case going forward? Or would you consider going bigger and more strategic if opportunities arise? Daniel Amos: I think the answer is we continue to look at opportunities. Generally, if something is for sale, it's for sale for a reason. And so we want to be careful in how we spend the money. It took us a long time to make it, and we want to be careful with that. But at the same time, if there's opportunities, we certainly want to look into it. I am pleased with the development of the small companies that we bought and what's taking place. They've turned around and done much better in the last year or so, and I'm encouraged by that. So the answer is yes, we would look elsewhere, but it would have to pass a strenuous test for us to be excited and really interested in something. Thomas Gallagher: Okay. And then my follow-up is, Max, on the expansion of the limit in terms of reinsuring Japanese business to Bermuda. Can you just give a little bit of color what the 30% of FSA reserves now? Was that just -- is that still just a company-imposed limit? Or was that in consultation with the FSA? And will this signal an ability to actually do more each time you do them? Like, can we expect the cadence of reinsurance to be going up annually? Or would you still expect it to be similar to what you've done in the past? Max Broden: Yes. So this move from having a ceding limit from 10% of U.S. GAAP assets to 30% of FSA reserves, this is an internally imposed limit that we have developed ourselves. But you should assume that we have shared this with external constituents as well and received feedback on it. So we -- this is something that makes sense for us. We feel it fits us well when we balance the overall risks and opportunities available to us. As it relates to the size of future transactions, there is obviously a cost with every transaction that you do. So if you do any bigger transactions, that means that the cost per transaction now is somewhat lower. And we obviously now feel that we have developed a strong track record, both internally and now also externally to execute these transactions. So we feel very good about both significant opportunities that we have in front of us to improve the risk profile of the company and also the return profile of the company utilizing reinsurance. Operator: The next question comes from Suneet Kamath with Jefferies. Suneet Kamath: I want to start with the medical sales in Japan. I know they were up year-over-year, but they were down sequentially despite the product launch in December. I would have thought that you had a little bit more runway given the product launch. So can you just talk about what you're seeing in that product line and your expectations for the balance of the year? Koichiro Yoshizumi: [Interpreted] Thank you for your question. This is Yoshizumi in charge of marketing sales in Aflac Japan. As you just described, the Anshin Palette, our medical insurance products, its momentum is sustaining from the first quarter to second quarter. And as a result, the first half of 2026 sales exceeded the prior year. But it's also true that there was a decline from the first quarter to second quarter. And this is because about the timing. This product was actually launched towards the end of December last year. And we were making a thorough preparation towards that day during December. And that is why we managed to get a great sales or solid result in the first quarter. And we enjoyed the more-than-expected momentum even in the second quarter. And we expect this momentum to continue through third quarter and fourth quarter. That's all. Suneet Kamath: Okay. And then maybe shifting to the U.S. Virgil, can you just give us some thoughts on how you're feeling about sales so far this year? And I think in the past, you've given us some good color on how the traditional channel has performed relative to the brokerage channel. I was wondering if you could give us an update there as well. Virgil Miller: Yes, certainly. Let me first start by saying that pretty much for the year, we're in line with expectations, slightly the lower end of my expectations. But as you indicated, I'm expecting a stronger second half of the year, heavily weighted in the fourth quarter due to the seasonality of our business and the strength we continue to see though in our PLADS, or group life, absence, disability business. Let me give you just a little bit more color on the performance of how the portfolio balances out. First, if you add just our group life, absence, disability to our dental and vision, just looking at those 2 products and then, what, our group voluntary benefits, we were up 7.1% for second quarter, again, seeing good performance there. When you look at the overall earned premium result for those group products, we were up 13% for the earned premium. That gives you kind of a little bit of color that we're seeing continued steady growth in our group business. It's in line with the market, though. You can see the market now as brokers have gone more heavily into voluntary benefits, they are selling more of the group product. We're seeing that. We are still dedicated, though, to our agency force. We continue to roll out strong individual traditional products for them. And I do expect, though, to have a stronger year traditional overall this year, again, with a stronger second half heavily weighted in the fourth quarter. Just a couple more things. Dan mentioned earlier about the investments we made, though, with the products. When you look at the dental and vision product, we were up 47% in the second quarter. Very strong performance, heavily driven by our agency force. We're going to push stronger in the second half of the year and really get brokers to adopt the network dental product. That's going to be our focus going into the second half of the year. I think also when you look at the dental and vision property, we continue, though, to be focused on ensuring that we're selling our voluntary benefits product alongside of that. So for every $1 that we sold in the second quarter next to the voluntary benefits, what you will see is that we sold $1.07 of voluntary benefits. That's better than we ever expected, and that's the trend I want to see continue. We're not just selling it standalone. It drives VB alongside of it. Just again, overall, we've got some strong comparisons in the second half of the year, but I'm expecting growth to be higher than last year, and I'm expecting a big strong fourth quarter, though. Operator: The next question comes from Mike Ward with UBS. Michael Ward: I was wondering, in Japan, if you guys have seen any change in the lapse paid up or surrender behavior given the inflationary kind of pressure and higher rates in Japan. Max Broden: Yes. Thank you for the question. So far, we haven't really seen any sort of significant lapse uptick related to either inflation or to interest rates. If you look at our first sector block, which would be the block of business that should be the most sensitive to interest rates, we've seen a minor uptick, but that's from very, very low levels. And we certainly have not seen any spikes or significant correlation with the increase in rates there. So even when we -- if you then think about inflation pressures as well, that hasn't necessarily had any significant impact on our lapse rates. The decline in persistency that you have seen year-over-year has more been driven by the product launches that we have experienced both on cancer and medical, much more so on the cancer side than the medical side. But when we do refresh our product portfolio and we come out with more attractive new products, we always see an element of increased levels of lapse and reissue, obviously impacting our persistency rate. And we certainly experienced that with our Miraito launch. As we look forward, we do believe that Miraito is now through the full first year of being out there. So with that, we would expect some decline in lapse and reissue going forward. And therefore, we should expect our persistency rate, as reported, to stabilize going forward. Michael Ward: And then, Dan, I just wanted to ask again about the M&A question. I totally get that properties that are for sale are for sale for a reason sometimes. Just curious like how interested you guys might be in something that could really help you leapfrog in the U.S. specifically in a diversified way. Daniel Amos: We certainly are looking all the time. And if you have any suggestions, we're willing to listen. But our focus has been on turning these other programs around, which I'm very pleased with what's been going on there. And now that I'm at that point, our financial team brings us what they think makes financial sense, and then we see how it would coordinate and work well with our existing distribution or do we look at it totally separate. And we look at both ways. We look at it that if it's products we don't sell, how we might mix it together. And then if you talk about merging where we sell products that we already sell, that would be how we had to look at it from a disciplined perspective and make sure that we're following guidelines, and we realize that can create disruption, but we're willing to do it if it makes sense. So we'll continue to watch those. Operator: The next question comes from Wes Carmichael with Wells Fargo. Wesley Carmichael: First question was just on Japan sales. I think, Dan, last quarter, you mentioned that you'd be happy this year if we got to JPY 80 billion in sales, maybe the company would be satisfied with a little less. But just curious, we're halfway through the year, I think we're at JPY 37-and-change billion of yen sales. So just curious what you're thinking for the rest of the year. Daniel Amos: Well, I'd still be happy with sales at JPY 80 billion. But as I stated today, we expect the 2026 numbers to exceed last year's numbers. And that I also said in the first quarter -- at the end of the first quarter. We delayed some of our direct mail campaigns in Japan but are now back on track. And the JPY 80 billion was a challenge to begin with and remains in the realm of possibilities for us to achieve. So I won't rule it out, but I'm confident and can say that in terms of 2026 sales will exceed 2025. Wesley Carmichael: Got it. And Max, maybe just on ESR. I think, as a rule of thumb in the past, you gave every 10 points was approximately $750 million to $1 billion of excess capital. Just curious if that still is a good rule of thumb to use? And should we be thinking about including the USP when we think about your excess capital in Japan? Max Broden: Thank you, Wes. That is -- it continues to be a good rule of thumb for our ESR capital base. As it relates to the USP, we manage our business including USP. We manage our risk profile, including USP. So I would certainly include that. We think that, that gives a better view and better reflects the risks of our business when including USP in the ESR. So that is why we're using it. Operator: The next question comes from Joel Hurwitz with Dowling & Partners. Joel Hurwitz: Max, one more on inflation. In your prepared remarks on Japan, you highlighted good expense results despite the inflationary pressures. Can you just elaborate on how significant those inflation pressures are on your expense base? And I guess, any other broader headwinds from inflation in Japan? Max Broden: Yes. So let me kick it off, and I'd like Morimoto-san to give some commentary on this as well. Japan inflation is running close to 3% at the moment. And obviously, that is a function of domestic inflationary pressures, but also the weakening yen leads to imported inflation as well into the Japanese economy. And when you run those kind of inflationary pressures and you know that our revenue base is slightly shrinking, that means that managing your expense becomes quite difficult. And I think the team has done a great job managing expenses and even getting the expense ratio lower than last year. So it is in that context that I think that we've done a very good job managing that expense ratio overall. Going forward, we still expect that the 20% to 23% is a good expense ratio range for the company to operate long term. And obviously, in the very near term, we have been towards that sort of low end of that range. So please, Morimoto-san. Shinsuke Morimoto: [Interpreted] So this is Morimoto, I would like to comment as well. And one of the important factor in relation to inflation is the Middle East situation. The Middle East situation is, at this point, not giving any significant impact on the insurance business in Japan. That said, we will continue to monitor risks, including financial market volatility and potential upward pressure on operating expenses. The Middle East situation remains highly uncertain and any deterioration could raise both downside risk to Japan's economy and upside risk to inflation, notably through higher crude oil prices. The government is implementing supplementary budgets to address Middle East-driven energy price surges and has advanced alternative procurement of critical minerals with high Middle East exposure. We expect continued comprehensive measures in line with energy price developments and domestic economic and inflation trends. That's all from me. Daniel Amos: This is Dan. One thing we try to do in these meetings is introduce new people in terms of -- in their position. And Morimoto is now our Deputy President and certainly is in line to continue to do well with us. He's in his over 25 years with the company. And Morimoto, we're glad to have you join us, and we're counting on you to help grow our business going forward as you work closely with Koide this year. Joel Hurwitz: All right. Very helpful response. And then just maybe a follow-up on sales. And in response to an earlier question on Tsumitasu sales, you mentioned it's making, I think, a great contribution expanding third sector sales. Can you just provide some more color on the cross-sell there at this time? Koichiro Yoshizumi: [Interpreted] Thank you for your question. This is Yoshizumi once again. And Tsumitasu is a product attracting younger and middle-aged customers who are seeking to accumulate their assets in yen. And there is also a need from this target audience wanting to be prepared for cancer and medical by purchasing these products. However, if these needs have yet to be realized or if these needs are still potential, then the job of the associates is to drive their needs in order to realize them. So therefore, whenever they conduct pitches to the customers, the associates are always promoting the concurrent sales to customers. And through this effort, we have succeeded in selling cancer and medical insurance together with Tsumitasu. Initially, we were planning the concurrent sales to be 25%. However, presently, we are largely exceeding this percentage. That's all from me. Operator: The next question comes from Wilma Burdis with Raymond James. Wilma Jackson Burdis: We estimate that taking Japan reinsurance from 10% to 30% would free up JPY 5 billion to JPY 7 billion of capital or more. Is that a reasonable estimate? And perhaps you could walk us through the pieces there. Max Broden: So Wilma, the way to think about it is if you size the total opportunity, at the end of the fiscal year, Aflac Japan had policy reserves on an FSA basis of JPY 10.8 trillion. So if you take that as a starting point, that gives you sort of the current limit of our reinsurance capacity from a ceding standpoint out of Aflac Japan. If you then think about what would that do from a capital free-up standpoint, the capital being freed up is very dependent on many factors, including what blocks are being ceded. And I would generally say that the difference between the FSA reserve and economic reserve is the greatest for medical business. It has less of a difference for cancer business and the least difference between the reserve levels occurs in the first sector business for WAYS and Tsumitasu. The aging of the blocks ceded matters a lot. The interest rate levels matters a lot. So there's not a great sort of rule of thumb that we can give you. But I would encourage you to go back and look at our FAB presentation from 2020 (sic) [ 2021 ], where we gave a level of reserve difference for the total block of in-force business at that point in time. And that gives you an indication or a ballpark number of what that reserve difference could be given the block of business at that point in time. And it's -- I wouldn't say that it's materially different today in terms of the mix compared to back then. But that's what I would look at if I wanted to come up with a rough estimate of what reinsurance capital free up could give us in the future. Wilma Jackson Burdis: Okay. And then will the U.S. and Japan joint efforts to support the yen have any impact on Aflac? And if Japan interest rates ultimately have to increase to support the yen, what impact will that have on Aflac? Bradley Dyslin: Wilma, this is Brad. Let me comment on that as it relates to the portfolio. Obviously, we've seen a sizable move in the yen. We almost hit JPY 164. I think we're hovering around JPY 158 today. Specific to the portfolio, remember, our U.S. dollar portfolio is part of the larger strategy designed to protect the economic value of Aflac Japan against these kinds of moves in FX. Think of it quite simply as having a pool of yen assets backing a currency matched against the offsetting yen liabilities, and then our surplus on behalf of our U.S. dollar shareholders is supported in large part by our unhedged U.S. dollar assets. So any changes in FX move in tandem on both sides of the balance sheet. There's a small impact on ESR, but nothing material to speak of. One area we're watching is, as I mentioned earlier, the FX gains from our dollar program have been an important tool for us as we look to reposition the portfolio. As the yen strengthens, it does have an impact on these gains. But most of our dollar assets were bought at much lower or much -- I should say, much stronger yen levels. So we still have a long ways to go there before those gains are eroded. So there really is no other impact to the -- from FX to the portfolio. Max Broden: I just wanted to add, and I wanted to start with one correction. When you go back and look at the reserve difference between FSA and economic reserve, it's not the 2020 FAB, it's the 2021 FAB. So that's the FAB book to look at. The other comment I wanted to make on this topic of FX is that we design and have positioned our foreign exchange hedges for long-term protecting the value of, in our case, Aflac Japan in U.S. dollar terms. That's the ultimate purpose. And they are long term in nature, and they play out over a long period of time as well. So in that context, a 4% move, even though dramatic on the day, a 4% move in the yen-dollar exchange rate is actually quite minor in the scheme of things as we -- as our program is taking a very long-term view. So with that in mind, at the moment, this in itself does not necessarily lead us to make any significant changes to our foreign exchange program. Operator: The next question comes from Pablo Singzon with JPMorgan. Pablo Singzon: My first question is for Max. Can you talk about to what extent the benefit ratio in Japan year-to-date will influence your approach to reviewing reserves in the third quarter? I think you had said that the elevated ratio is being caused by who's lapsing vis-a-vis the newer product. Is that a significant consideration? Or is it more of a backward-looking item when you think about assumption updates in 3Q? Max Broden: Yes. I had a little bit trouble hearing you, but I think the question is around the benefit ratio for Japan for the first half and what we expect going into the second half and also any expectations on the actuarial assumption review that we -- that will take place in the third quarter. So in the -- obviously, in the first half, our benefit ratio has been a little bit higher than what we expected, and we have called that out. We still expect to be inside of our full year guidance range of 60% to 63%, but we now expect to be at the upper end of that range. The main reason that is sort of pushing us a little bit higher is the type of lapses that are occurring. We have seen less lapsation of older policies, and older policies obviously have -- that have been on our books for a long period of time, have accumulated and built up quite significant reserves. So when those policies lapse, that reserve is being released through the benefit ratio, pushing it down significantly. We have seen an increase in more recently issued policies that haven't had that same level of reserve being built up. And therefore, when they are being lapsed, then there's not a significant push down on the benefit ratio. So the mix impact of lapsation have played a role here, and that means that the benefit ratio have not benefited as much as we previously expected. This is driven by our lapse and reissue program, and it is driven by the cancer product, obviously, Miraito. As Miraito matures and now is more than a year through its lifetime, we would expect this lapse and reissue activity to normalize, and that also means that we would expect the mix impact between older and more recently issued cancer products as it relates to lapsation to normalize as well. And that's what gives us confidence that we will come back inside of the benefit ratio range of 60% to 63% in the second half. As it relates to the third quarter assumption review, that is something that we are working on right now, and we will report out in the third quarter. And as always, we are trying to set all the assumptions, especially our forward-looking assumptions, with our best estimate, and we do that to the best of our ability to make sure that we reflect the reserves as best as we can. Pablo Singzon: And then second question, what is your outlook for your reinsurance initiative? It seems like there's a lot of opportunity there in Japan, and you should just grow fast naturally from a standing start. But any perspective on how large that business might be for you in the medium term? Max Broden: So, so far, we have executed one external transaction, and we're very pleased with that, and it's progressing well. We think that this is a significant market. We think that we have some particular competitive advantages, and we intend to leverage that to the best of our ability. This is a very lumpy business. So you should not expect us to announce or write any business every quarter. This is more of an annual cycle. So it's something that will build up over time. But long term, I think this is a business that fits us very well. And I think that we have a very good product that we can offer to the marketplace. So long term, we think this is going to be a significant business for Aflac. But I don't think it's going to overtake our primary business in U.S. and Japan, but it will be a very, very good supplemental business for us. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to David Young for any closing remarks. David Young: Thank you. And please mark your calendars for December 3 and join us for our financial analyst briefing. We will be getting more details out in regard to that. If you have any questions, please follow up with Investor and Rating Agency Relations, and we look forward to talking to you soon. And again, thank you for joining us this Friday. Have a great one. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.] Before you buy stock in Aflac, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Aflac wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Aflac (AFL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Earnings Per Diluted Share: $1.63 for the second quarter of 2026. Adjusted Earnings Per Diluted Share: $1.75 for the second quarter of 2026; increased 1.1% year-over-year to $1.80, excluding the effect of foreign currency. Aflac Japan Sales: Declined 5.6% to JPY11 billion in the quarter; up 7% for the first half of the year. Aflac Japan Premium Persistency: 92.7% for the quarter. Aflac Japan Net Earned Premiums: Declined 3.7% in yen terms for the quarter; underlying earned premiums declined 1.4%. Aflac Japan Total Benefit Ratio: 64% for the quarter, down 250 basis points year-over-year. Aflac Japan Expense Ratio: 20.2% for the quarter, down 40 basis points year-over-year. Aflac Japan Pretax Margin: 34.3% for the quarter, up 230 basis points year-over-year. Aflac US Sales: Increased 2.6% year-over-year in the second quarter. Aflac US Net Earned Premium: Increased 2.3% for the quarter. Aflac US Premium Persistency: 79.4%, up 20 basis points year-over-year. Aflac US Total Benefit Ratio: 49.5%, 220 basis points higher than Q2 2025. Aflac US Expense Ratio: 36.1%, down 20 basis points year-over-year. Aflac US Pretax Margin: 20.9%, a 160 basis point decrease compared with a strong quarter a year ago. Adjusted Book Value Per Share: Decreased 4.1%, excluding foreign currency remeasurement. Adjusted ROE: 12.7%; 16.6% excluding foreign currency remeasurement. Capital Returned to Shareholders: $1.3 billion in the second quarter and $2.6 billion for the first 6 months, including $983 million of share repurchases and $309 million in dividends in Q2. Adjusted Leverage: 21.8% for the quarter. Regulatory ESR: Estimated at 226%; 240% including the undertaking specific parameter (USP). Warning! GuruFocus has detected 1 Warning Sign with SBKFF. Is AFL fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Aflac Inc (NYSE:AFL) reported solid second-quarter 2026 results with adjusted earnings per diluted share of $1.75, reflecting focused execution of its strategy. Aflac Japan's first-half sales increased 7% year-over-year, driven by strong performance of Tsumitas and Anshin Palette products, and the company expects full-year sales to exceed 2025. Aflac US generated a 2.6% increase in sales and a 2.3% increase in net earned premium, with strong momentum in group voluntary and network dental/vision products. The company executed $4.8 billion in portfolio repositioning trades, expected to boost net investment income by over $50 million annually with limited capital impact. Aflac Inc (NYSE:AFL) returned $1.3 billion to shareholders in Q2 through dividends and share repurchases, maintaining its 43-year dividend increase streak. The company raised its Japan internal reinsurance target to 30% of FSA reserves, allowing for further risk reduction and balance sheet efficiency to drive higher ROE. Aflac Japan's pretax margin improved 230 basis points year-over-year to 34.3%, with a strong expense ratio of 20.2% despite inflationary pressures. Capital positions remain strong with estimated regulatory ESR of 226% (240% including USP) and combined RBC slightly above 600%. Aflac Japan sales declined 5.6% in Q2 2026 due to a tough comparison with the prior year's Miraito launch, though first-half sales were up 7%. Aflac US net earned premium growth for 2026 is now expected to be just below the guidance range of 3% to 6%, revised from previous low-end guidance. The US total benefit ratio increased 220 basis points year-over-year to 49.5%, driven by higher incurred group disability claims in the quarter. Variable investment income ran $72 million or $0.11 per diluted share below long-term return expectations in Q2. Japan's benefit ratio is expected to be at the high end of the 60% to 63% guidance range for 2026, due to elevated lapse and reissue activity on newer products. Adjusted book value per share, excluding foreign currency remeasurement, decreased 4.1% in the quarter. Corporate and other reported a pretax adjusted loss of $10 million, down from a $20 million gain last year, due to lower investment income and higher interest expense. Japan FSA booked securities impairments of JPY15.8 billion and additional valuation allowances, though within expectations. Q: What is the outlook for Aflac's reinsurance initiative in Japan, and how large could this business become in the medium term?A: Max Broden, CFO, stated that while the company has executed one external transaction so far, they view this as a significant market with particular competitive advantages. The business is lumpy and operates on an annual cycle rather than quarterly. Long-term, they believe this will become a significant supplemental business for Aflac, though it will not overtake their primary operations in the US and Japan. Q: Can you provide more detail on the $4.8 billion asset repositioning completed during the quarter, and to what extent do you see additional opportunities going forward?A: Brad Dyslin, Global Chief Investment Officer, explained that the repositioning involved harvesting foreign currency gains from the dollar portfolio in Aflac Japan to offset losses on older bonds in both the US dollar and JGB portfolios. The activity was mostly in Japan, with some adjustments in the US and Bermuda. He emphasized that the higher rate environment presents a "very big opportunity" and that the team continues to work on additional repositioning opportunities beyond the quarter. Q: Is there a practical limit to what percentage of Japan sales could come from first sector products like Tsumitas, given the higher rate environment?A: Max Broden, CFO, stated there is no specific set limit on the mix between third and first sector business. The primary driver is risk-adjusted return. Currently, first sector in-force is less than 20% of total in-force. While the returns are attractive, increasing this proportion too much could increase overall risk due to mortality, spread, and longevity risks. Masatoshi Koide, President of Aflac Japan, added that Tsumitas is strategically important for expanding the customer base to younger generations and driving concurrent sales of cancer and medical insurance. Q: What is the impact of the expansion of the internal reinsurance limit from 10% of US GAAP assets to 30% of FSA reserves, and does this signal an ability to do more transactions?A: Max Broden, CFO, clarified that this is an internally imposed limit developed by the company, which has been shared with external constituents for feedback. The move allows for potentially larger transactions, which lowers the cost per transaction. The company has developed a strong track record in executing these transactions and feels good about the significant opportunities to improve both the risk and return profile of the company. Q: How are US sales performing this year, and can you provide color on the traditional channel versus the brokerage channel?A: Virgil Miller, President of Aflac US, stated that sales are in line with expectations, with a stronger second half expected, heavily weighted in Q4. Group Life, Absence, and Disability combined with Dental and Vision were up 7.1% in Q2. The Dental and Vision property was up 47%, heavily driven by the agency force. He emphasized the focus on selling voluntary benefits alongside network dental products, noting that for every dollar of dental sold, they sold $1.07 of voluntary benefits. Q: Have you seen any change in lapse, paid-up, or surrender behavior in Japan given inflationary pressures and higher interest rates?A: Max Broden, CFO, reported no significant lapse uptick related to inflation or interest rates. The first sector block, most sensitive to rates, has seen only a minor uptick from very low levels. The decline in persistency is primarily driven by lapse and reissue activity from recent product launches, particularly the Miraito cancer product. As Miraito matures past its first year, they expect lapse and reissue activity to normalize and persistency to stabilize. Q: What is the estimated capital free-up from increasing Japan reinsurance from 10% to 30%, and can you walk through the pieces?A: Max Broden, CFO, explained that the total opportunity is based on Aflac Japan's FSA policy reserves of JPY10.8 trillion. The capital freed up depends on many factors, including which blocks are ceded. The difference between FSA and economic reserves is greatest for medical business, less for cancer, and least for first sector business. He directed analysts to the 2021 FAB presentation for a ballpark estimate of the reserve difference, noting the mix is not materially different today. Q: How will the higher benefit ratio in Japan year-to-date influence the approach to the Q3 reserve review?A: Max Broden, CFO, explained that the higher benefit ratio is driven by the mix of lapses. There has been less lapsation of older policies, which release significant reserves and push the ratio down, and more lapsation of recently issued policies without the same reserve build-up. This is driven by the lapse and reissue program on the Miraito cancer product. As this normalizes, they expect the benefit ratio to come back inside the 60% to 63% range in the second half. The Q3 assumption review is ongoing, and they will report results then. Q: What impact do the US and Japan joint efforts to support the yen have on Aflac, and what would happen if Japanese interest rates increase further?A: Brad Dyslin, Global Chief Investment Officer, explained that the US dollar portfolio is part of a strategy to protect the economic value of Aflac Japan against FX moves. Changes in FX move in tandem on both sides of the balance sheet, with only a small impact on ESR. While a stronger yen impacts FX gains used for portfolio repositioning, most dollar assets were bought at much stronger yen levels, so there is a long way to go before those gains are eroded. Max Broden added that the FX hedges are long-term in nature, and a 4% move in the yen-dollar rate is minor in the scheme of things, not leading to significant changes in the program. Q: What is the outlook for Japan sales for the rest of the year, and is the JPY80 billion target still achievable?A: Dan Amos, Chairman and CEO, stated that he would still be happy with sales of JPY80 billion, but the company expects 2026 sales to exceed 2025 levels. Some major campaigns were delayed but are now back on track. The JPY80 billion target remains "in the realm of possibilities," but the primary confidence is in exceeding last year's sales figures. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Japan sales growth of 7% in the first half of 2026 was driven by the Tsumitasu first-sector savings product, which management uses as a strategic gateway to acquire younger demographics for future third-sector cross-selling. The Japan benefit ratio of 64% was impacted by a shift in lapse mix; fewer older policies with high reserves lapsed compared to newer policies, resulting in lower-than-anticipated reserve releases. U.S. sales momentum is increasingly concentrated in group voluntary products and network dental and vision, with dental/vision sales growing 47% as a primary driver for broader voluntary benefit adoption. Management attributed the U.S. benefit ratio increase to higher incurred group disability claims, though this was partially offset by prudent expense management and a $26 million contingency release. Strategic asset repositioning of $4.8 billion utilized foreign currency gains to offset losses on lower-yielding bonds, effectively boosting net investment income by an estimated $50 million on a run-rate basis. The company maintains a 'buy and hold' investment philosophy but is actively exploiting the higher rate environment to improve ALM and portfolio quality through tactical switch trades. Management raised the internal reinsurance limit from 10% of U.S. GAAP assets to 30% of Japan FSA reserves to further optimize balance sheet efficiency and long-term ROE. Japan benefit ratio guidance for 2026 is now expected at the high end of the 60% to 63% range, assuming lapse and reissue activity normalizes as the Miraito product matures. U.S. net earned premium growth for 2026 is projected to fall slightly below the 3% to 6% range, though the three-year CAGR through 2027 remains within that target. Aflac Japan sales are expected to exceed 2025 levels, supported by the resumption of delayed direct mail campaigns and continued momentum in medical insurance refreshes. Capital deployment remains focused on a 43-year track record of dividend increases and tactical share repurchases, supported by a strong ESR of 226%. The company recorded JPY 15.8 billion in securities impairments in Japan, primarily related to transitional real estate loans, though management noted this has limited impact on regulatory capital. Inflationary pressures in Japan (approximately 3%) are being monitored for their impact on operating expenses, though current expense ratios remain at the low end of the 20% to 23% target range. The enterprise hedging program, which holds 63% of debt in yen, is designed to protect the economic value of Japan operations against yen-dollar volatility rather than short-term currency fluctuations. Management flagged potential upside risks to inflation in Japan driven by Middle East geopolitical uncertainty and its impact on energy prices. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management does not set a hard limit on first-sector sales but monitors the risk mix of mortality and spread versus third-sector stability. Tsumitasu currently represents 20% of sales and is exceeding expectations with a 25%+ cross-sell rate into cancer and medical insurance. The shift to a 30% FSA reserve limit was an internal decision shared with regulators to allow for larger, more efficient risk transfers. Future external reinsurance deals are expected to follow an annual cycle rather than a quarterly cadence due to the 'lumpy' nature of the business. Management remains open to larger strategic deals but maintains a 'strenuous test' for financial sense and integration potential. Current focus remains on scaling recent smaller acquisitions and ensuring they complement existing distribution channels. Significant yen weakening provided a window to harvest FX gains from the dollar portfolio to offset losses on older JGBs and U.S. bonds. Management indicated they 'did not stop working on June 30' and see continued opportunities to capture yield in the current rate environment.

Interested in Aflac Incorporated? Here are five stocks we like better. Aflac reported solid Q2 results, with net earnings of $1.63 per diluted share and adjusted earnings of $1.75, while returning $1.3 billion to shareholders through buybacks and dividends. Japan sales fell 5.6% year over year against a difficult comparison, but first-half sales rose 7% and new products helped attract younger customers. U.S. group insurance momentum also continued, with sales up 7.1% in key group businesses. Aflac repositioned $4.8 billion of investments, expected to raise annualized net investment income by more than $50 million. The company maintained strong capital and liquidity, while lowering its 2026 U.S. premium-growth outlook to slightly below its prior 3%-6% range. A Boring Dividend Growth Strategy Becomes a Solid Defensive Play Aflac (NYSE:AFL) reported second-quarter 2026 net earnings of $1.63 per diluted share and adjusted earnings of $1.75 per diluted share, as the insurer cited continued sales momentum in Japan and growth in its U.S. group insurance operations. Chief Financial Officer Max Brodén said adjusted earnings increased 1.1% year over year to $1.80 per diluted share excluding foreign-currency effects. Chairman and Chief Executive Officer Dan Amos said the quarter extended a “solid financial start” to the year, supported by operating execution, investment income and capital generation. The company returned $1.3 billion to shareholders during the quarter through $983 million of stock repurchases and $309 million in dividends. For the first six months of 2026, shareholder returns totaled $2.6 billion. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 3 Overlooked Stocks Positioned for the Next Market Rotation Amos said Aflac remains committed to extending its record of 43 consecutive annual dividend increases in 2026. Aflac Japan recorded sales of ¥11 billion in the second quarter, down 5.6% from a year earlier, reflecting a difficult comparison following the prior-year launch of Miraito Cancer Insurance. First-half sales, however, rose 7%, and Amos said the company expects full-year Japan sales to exceed 2025 levels. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High MarketBeat Week in Review – 06/08 - 06/12 The company cited strong growth from its refreshed Tsumitasu savings-type life product and its Anshin Palette medical insurance product, introduced in December 2025. Tsumitasu accounted for about 20% of total sales, according to Masatoshi Koide, president and representative director of Aflac Life Insurance Japan. Koide said Tsumitasu has helped broaden Aflac’s customer base among younger consumers and has supported sales of cancer and medical products alongside the savings product. Koichiro Yoshizumi, executive vice president of sales and marketing at Aflac Life Insurance Japan, said concurrent sales of cancer and medical coverage with Tsumitasu have exceeded the company’s initial 25% target. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling While medical insurance sales declined sequentially from the first quarter, Yoshizumi said momentum has remained stronger than expected and should continue through the second half. The first-quarter result benefited from extensive preparation surrounding the late-December product launch, he said. Japan premium persistency was 92.7%, unchanged from the prior quarter. Brodén said the company has experienced elevated lapse-and-reissue activity on recently introduced products, particularly Miraito, but expects that activity to normalize now that the cancer product has been in the market for more than a year. Japan net earned premiums declined 3.7% in yen terms. Underlying earned premiums, excluding reinsurance, paid-up policies and deferred profit liability effects, declined 1.4%. The Japan benefit ratio was 64%, down 250 basis points year over year. The expense ratio was 20.2%, down 40 basis points despite inflation pressures in Japan. Japan’s pretax margin increased 230 basis points to 34.3%. Brodén said the company now expects Japan’s full-year benefit ratio to land at the high end of its 60% to 63% guidance range, excluding the annual third-quarter actuarial assumption review. He attributed the higher year-to-date ratio partly to fewer lapses of older policies, which carry larger accumulated reserves and would otherwise provide a greater benefit-ratio reduction when they lapse. In the U.S., Aflac reported a 2.6% year-over-year increase in sales and a 2.3% increase in net earned premiums. Premium persistency improved 20 basis points to 79.4%, while the U.S. pretax margin was 20.9%. President Virgil Miller said the company’s group life, absence and disability business, together with dental and vision products and group voluntary benefits, generated sales growth of 7.1% in the second quarter. Earned premiums for those group products rose 13%. Dental and vision sales increased 47%, driven heavily by Aflac’s agency force, Miller said. He added that the company plans to focus in the second half on increasing broker adoption of network dental products while continuing to pair dental and vision sales with voluntary-benefits offerings. Aflac expects 2026 U.S. net earned premium growth to come in slightly below its previous 3% to 6% guidance range, compared with its earlier expectation for growth at the low end of that range. Brodén said the company still expects its 2025-2027 net earned premium compound annual growth rate to remain within the 3% to 6% range. The U.S. benefit ratio rose 220 basis points year over year to 49.5%, primarily because of increased incurred group disability claims following favorable results in the prior quarter. The U.S. expense ratio fell 20 basis points to 36.1%. Aflac repositioned $4.8 billion of its investment portfolio through switch trades during the quarter. Global Chief Investment Officer Brad Dyslin said the activity was concentrated in Japan and involved harvesting foreign-exchange gains on U.S. dollar assets to offset losses on older, lower-yielding bonds, including Japanese government bonds. Brodén said the transactions are expected to increase net investment income by more than $50 million on an annualized run-rate basis, while having a limited effect on capital. The company also said the trades improved asset-liability management, reduced the risk of future Financial Services Agency impairments and strengthened portfolio quality. Aflac ended the quarter with $3.3 billion in unencumbered liquidity, or $2.3 billion above its $1 billion minimum balance. Adjusted leverage was 21.8%, within the company’s 20% to 25% target range. Its estimated regulatory economic solvency ratio was 226%, or 240% including the Undertaking-Specific Parameter, while combined risk-based capital was slightly above 600%. The company also revised its internal Japan reinsurance target to permit cessions of up to 30% of Financial Services Agency reserves, replacing a prior target of up to 10% of U.S. GAAP assets. Brodén said the expanded capacity is intended to reduce risk, improve balance-sheet efficiency and support higher returns on equity, though the timing and size of future transactions will vary. Amos said Aflac will continue evaluating acquisition opportunities but will apply a “strenuous test” before pursuing a deal. He said the company has been encouraged by the progress of smaller businesses it previously acquired and would consider larger opportunities if they made financial and strategic sense. Aflac Incorporated (American Family Life Assurance Company of Columbus) is a provider of supplemental insurance products designed to help policyholders manage out-of-pocket health care and living expenses. The company underwrites a range of individual and group policies that typically pay cash benefits directly to insureds when covered events occur, enabling greater financial flexibility for medical treatment, hospital stays, critical illness, and related costs. Aflac's product mix includes supplemental health insurance, life insurance and other specialty coverages intended to complement primary medical plans. Founded in the mid-20th century and headquartered in Columbus, Georgia, Aflac distributes its products through a combination of employer-sponsored programs, independent brokers and agents, and direct marketing. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Aflac Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Supplemental insurance provider Aflac (NYSE:AFL) missed Wall Street’s revenue expectations in Q2 CY2026, with sales falling 9.2% year on year to $4.12 billion. Its non-GAAP profit of $1.75 per share was in line with analysts’ consensus estimates. Is now the time to buy Aflac? Find out in our full research report. Revenue: $4.12 billion vs analyst estimates of $4.23 billion (9.2% year-on-year decline, 2.7% miss) Pre-tax Profit: $995 million (24.2% margin) Adjusted EPS: $1.75 vs analyst estimates of $1.76 (in line) Book Value per Share: $60.35 vs analyst estimates of $55.23 (18.7% year-on-year growth, 9.3% beat) Market Capitalization: $63.91 billion 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. Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE:AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance. Big picture, insurers generate revenue from three key sources. The first is the core business of underwriting policies. The second source is income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from various sources such as policy administration, annuities, or other value-added services. Aflac struggled to consistently generate demand over the last five years as its revenue dropped at a 5.1% annual rate. This was below our standards and is a sign of poor business quality. Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business. Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Aflac’s annualized revenue declines of 1.2% over the last two years suggest its demand continued shrinking. Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business. This quarter, Aflac missed Wall Street’s estimates and reported a rather uninspiring 9.2% year-on-year revenue decline, generating $4.12 billion of revenue. Net premiums earned made up 82.1% of the company’s total revenue during the last five years, meaning Aflac barely relies on non-insurance activities to drive its overall growth. Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business. Markets consistently prioritize net premiums earned growth over investment and fee income, recognizing its superior quality as a core indicator of the company’s underwriting success and market penetration. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. Insurance companies are balance sheet businesses, collecting premiums upfront and paying out claims over time. The float (premiums collected but not yet paid out) is invested, creating an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders. We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate. Aflac’s BVPS grew at a sluggish 3.8% annual clip over the last five years. However, BVPS growth has accelerated recently, growing by 14% annually over the last two years from $46.40 to $60.35 per share. Over the next 12 months, Consensus estimates call for Aflac’s BVPS to shrink by 7% to $55.23, a sour projection. We were impressed by how significantly Aflac blew past analysts’ book value per share expectations this quarter. On the other hand, its revenue missed and its EPS was in line with Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.4% to $124.92 immediately following the results. So should you invest in Aflac right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.

Aflac (AFL) came out with quarterly earnings of $1.75 per share, missing the Zacks Consensus Estimate of $1.77 per share. This compares to earnings of $1.78 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -1.13%. A quarter ago, it was expected that this insurer would post earnings of $1.8 per share when it actually produced earnings of $1.75, delivering a surprise of -2.78%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Aflac, which belongs to the Zacks Insurance - Accident and Health industry, posted revenues of $4.22 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.89%. This compares to year-ago revenues of $4.54 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Aflac shares have added about 13.9% since the beginning of the year versus the S&P 500's gain of 12.8%. While Aflac has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Aflac was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.77 on $4.16 billion in revenues for the coming quarter and $7.06 on $16.79 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Accident and Health is currently in the bottom 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Solana Company (HSDT), another stock in the broader Zacks Finance sector, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of +100%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Solana Company's revenues are expected to be $3.8 million, up 9400% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aflac Incorporated (AFL) : Free Stock Analysis Report Solana Company (HSDT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research