Aflac Incorporated · NYSE:AFL
Aflac — Q4 2023 Earnings Presentation
33 slides from Aflac's earnings presentation, Feb 1, 2024
Slide 1: Aflac Incorporated
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meani
Slide 3: Max K. Brodén, Executive Vice President, CFO
Max K. Brodén Executive Vice President CFO, Aflac Incorporated
Slide 4: Fourth quarter net earnings per diluted share
Fourth quarter net earnings per diluted share $0.46
Slide 5: Fourth quarter adjusted earnings per diluted share
Fourth quarter adjusted earnings per diluted share* $1.25 *Non-GAAP measure
Slide 6: ROE, Adj. ROE and Adj. ROE ex-FX
ROE 4.8% Adj. ROE* 10.5% Adj. ROE ex-FX* 10.7% *Non-GAAP measure
Slide 7: Fourth quarter benefit ratio for Aflac Japan
Fourth quarter benefit ratio for Aflac Japan 66.1%
Slide 8: Fourth quarter third sector benefit ratio for Aflac Japan
Fourth quarter third sector benefit ratio for Aflac Japan 56.2%
Slide 9: Fourth quarter premium persistency for Aflac Japan
Fourth quarter premium persistency for Aflac Japan 93.4%
Slide 10: Fourth quarter total adjusted expense ratio for Aflac Japan
Fourth quarter total adjusted expense ratio for Aflac Japan 21.1%
Slide 11: Fourth quarter pretax profit margin for Aflac Japan
Fourth quarter pretax profit margin for Aflac Japan 30.4%
Slide 12: Fourth quarter premium persistency for Aflac U.S.
Fourth quarter premium persistency for Aflac U.S. 78.6%
Slide 13: Fourth quarter benefit ratio for Aflac U.S.
Fourth quarter benefit ratio for Aflac U.S. 44.6%
Slide 14: Fourth quarter total adjusted expense ratio for Aflac U.S.
Fourth quarter total adjusted expense ratio for Aflac U.S. 43.4%
Slide 15: Fourth quarter pretax profit margin for Aflac U.S.
Fourth quarter pretax profit margin for Aflac U.S. 18.4%
Slide 16: Strong capital position at the end of Q4
Strong capital position at the end of Q4 Combined SMR RBC >1,100% >650%
Slide 17: Fourth quarter Adjusted Leverage
Fourth quarter Adjusted Leverage* 19.7% *Adjusted debt to adjusted capitalization ex-AOCI, these are non-GAAP measures.
Slide 18: $700 million share repurchase
Fourth quarter share repurchase $700 million
Slide 19: $245 million dividends
Fourth quarter dividends $245 million
Slide 20: Financial Focus & Outlook
Financial Focus & Outlook Afiiac. Incorporated
Slide 21: Aflac Japan 2024 Outlook
Aflac Japan 2024 Outlook: Continued Strength in Core Margins 2024e Benefit Ratio % Expense Ratio % Pretax Profit Ratio % 68 21 31 2024e Underlying Net Earned Premiums 1 -2.5 to -1.5% Aim to reach ¥67 to ¥73 billion of sales by the 66 19 29 end of 2026 1 A non-U.S. GAAP financial measure. See appendi
Slide 22: Aflac U.S. 2024 Outlook
Aflac U.S. 2024 Outlook: Providing Customers Value, Scaling Growth and Realizing Efficiency 2024e Benefit Ratio % Expense Ratio % Pretax Profit Ratio % 47 40 21 2024e Net Earned Premiums +3.0 to +5.0% Aim to exceed sales of $1.8 billion by the end of 2025 45 38 19
Slide 23: Slide 23
Slide 24: Appendix
Appendix
Slide 25: Glossary of Non-U.S. GAAP Measures
Glossary of Non-U.S. GAAP Measures The Company defines these non-U.S. GAAP financial measures as follows: • Adjusted earnings are adjusted revenues less benefits and adjusted expenses. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted ave
Slide 26: Glossary of Non-U.S. GAAP Measures (cont'd)
Glossary of Non-U.S. GAAP Measures (cont’d) The Company defines these non-U.S. GAAP financial measures as follows: • Aflac Japan’s Underlying net earned premiums is a measure that adjusts Aflac Japan’s net earned premiums under U.S. GAAP for significant variables including the increase in paid-up po
Slide 27: Reconciliation of Net Earnings Per Diluted Share to Adjusted Earnings per Diluted Share
Reconciliation of Net Earnings Per Diluted Share to Adjusted Earnings per Diluted Share Three Months Ended December 31 2023 2022 %Change Net Earnings per diluted share $0.46 $0.31 48.4% Items impacting net earnings Adjusted net investment (gains) losses 0.77 0.77 Other and non-recurring (income) los
Slide 28: Reconciliation of Net Earnings to Adjusted Earnings
1 Reconciliation of Net Earnings to Adjusted Earnings Three Months Ended December 31, in millions of Dollars 2023 2022 %Change Net Earnings $268 $196 36.7% Items impacting net earnings Adjusted net investment (gains) losses 450 477 Other and non-recurring (income) loss — — Income tax (benefit) expen
Slide 29: Reconciliation of U.S. GAAP Return on Equity to Adjusted ROE
1 Reconciliation of U.S. GAAP Return on Equity to Adjusted ROE Three Months Ended December 31, in millions of Dollars 2023 2022 U.S. GAAP ROE - Net earnings2 4.8% 3.9% Impact of excluding unrealized foreign currency translation gains (losses) (0.8) (0.6) Impact of excluding unrealized gains (losses)
Slide 30: Reconciliation of U.S. GAAP Book Value per Share
1 Reconciliation of U.S. GAAP Book Value per Share Three Months Ended December 31, in millions of Dollars 2023 2022 %Change U.S. GAAP book value per common share $38.00 $32.73 16.1% Less: Unrealized foreign currency translation gains (losses) per common share (7.03) (5.79) Unrealized gains (losses)
Slide 31: Adjusted Leverage Ratios
Adjusted Leverage Ratios (In millions) 2023 2022 Notes Payable $7,364 $7,442 50% of subordinated debentures and perpetual bonds (315) (337) Pre-funding of debt maturities (211) — Adjusted debt1 6,839 7,105 Total Shareholders’ Equity 21,985 20,140 Accumulated other comprehensive (income)loss: Unreali
Slide 32: Aflac Japan's Underlying Net Earned Premiums
Aflac Japan’s Underlying Net Earned Premiums Three Months Ended December 31, in millions of Yen 2023 2022 %Change Aflac Japan’s Net Earned Premiums - as reported ¥272,085 ¥297,315 (8.5)% Estimated impacts of quarterly significiant variables: Increase in paid-up policies 7,100 Impact of reinsurance 1
Slide 33: Aflac Japan's Underlying Net Earned Premiums
Aflac Japan’s Underlying Net Earned Premiums Twelve Months Ended December 31, in billions of Yen 2023 2022 %Change Aflac Japan’s Net Earned Premiums - as reported ¥1,127.8 ¥1,198.1 (5.9)% Estimated impacts of quarterly significiant variables: Increase in paid-up policies 32.3 Impact of reinsurance 3