Aflac Net Earnings Rise 37.7% Amid Investment Recovery
The insurer reported net earnings of $825 million for the second quarter, driven by a reduction in investment losses.
Aflac (AFL), the supplemental insurance provider, reported net earnings of $825 million for the second quarter, a 37.7% increase from the $599 million recorded in the same period last year.
The growth in net earnings occurred despite a decline in total revenues, which fell 1.0% year-over-year to $4.1 billion. The result was primarily influenced by a recovery in the company's investment portfolio, as net investment losses narrowed to $153 million, or $0.30 a share, compared to losses of $421 million, or $0.78 a share, in the prior-year quarter.
Adjusted earnings fell 7.7% year-over-year to $883 million. Adjusted earnings per diluted share decreased 1.7% to $1.75, compared to $1.78 in the second quarter of 2024. A 9.3% weakening of the yen against the dollar, with an average rate of 159.45, created a negative $0.05 impact on adjusted earnings per share.
In Japan, the company's pretax adjusted profit margin expanded to 34.3% from 32.0% in the prior-year period. However, net earned premiums in yen decreased 3.7% to ¥245.1 billion, due to limited pay products reaching paid-up status and a new external reinsurance transaction. New annualized premium sales also fell 5.6% to ¥19.6 billion, following a high prior-year baseline for Miraito cancer insurance.
Aflac U.S. saw net earned premiums increase 2.3% to $1.5 billion. Despite the premium growth, pretax adjusted earnings in the U.S. fell 4.6% to $370 million, as higher benefits compressed the pretax adjusted profit margin to 20.9% from 22.5%.
The Corporate and Other segment reported a pretax adjusted loss of $10 million, compared to a $20 million gain in the second quarter of 2024. This swing was due to higher interest expenses and lower adjusted net investment income.
Aflac returned $1.3 billion to shareholders during the quarter, consisting of $983 million in share repurchases and $309 million in dividends. This capital return was consistent with the $1.3 billion returned in the first quarter of 2025.