Aflac Incorporated · NYSE:AFL
Aflac — Investor Presentation (December 2023)
27 slides from Aflac's investor presentation, Dec 4, 2023
Slide 1: Investor Update
Investor Update December 4, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures This presentation material has been prepared by Aflac Life Insurance Japan Ltd. (the “Company”) solely for the information purpose only of the corporate information of the Company and/or Aflac Incorporated and its subsidiaries, and does not
Slide 3: Leading Provider of Supplemental Health Insurance
Leading Provider of Supplemental Health Insurance By delivering on our promise to be there when our policyholders need us most and running our business The Aflac Way, we’ve gained the trust of millions of people worldwide who count on us to pay claims fairly and promptly YTD Adjusted Revenues4 by Se
Slide 4: Aflac Japan Segment
Aflac Japan Segment 5C/ Anniversary
Slide 5: Japan Market Penetration
Japan Market Penetration Insurance Product Penetration, Insurance Market Size 100.0% Individual Basis (Number of policies in force) 45 (in millions) 40 80.0% 35 72.1% 73.1% 66.8% 30 60.0% 25 42.6% 41.9% 37.8% 20 40.0% 15 20.0% 10 12.3% 10.4% 9.9% 5 9.1% 6.3% 0 0.0% 2016 2019 2022 2019 2020 2021 Medi
Slide 6: Third Sector Leader
Third Sector Leader #1 provider of cancer and medical insurance in Japan1 EVER • Simple product design that appeals to younger policyholders with basic needs Aflac Japan Net Earned Premiums YTD by Product 2 Simple and older or existing policyholders who desire additional or updated coverage Medical
Slide 7: Reaching More Customers through Diverse Distribution
Reaching More Customers through Diverse Distribution: Being Where People Want to Purchase Protection Category Channel Details Traditional Core • Vital for Aflac Japan sales, with 7,000+ agencies Channel • Japan Post Co., has more than 20,000 post offices nationwide Japan Post selling Aflac cancer in
Slide 8: Aflac U.S. Segment
Aflac U.S. Segment
Slide 9: Leading Provider of Supplemental Health Insurance in U.S.
Leading Provider of Supplemental Health Insurance in U.S. U.S. Distribution Mix Aflac U.S. Net Earned Premiums (New AP in $ millions) YTD by Product 1600 3% 3% 1400 3% 40% 1200 52% Critical care 4% 30.5% 49% 1000 Hospital indemnity 46% 12.7% 800 Disability Dental / 57% 21.8% vision 600 3.7% 50% Acci
Slide 10: Aflac U.S. Growth Opportunities
Aflac U.S. Growth Opportunities Solving for Access, Penetration & Retention in the U.S. Working Population Aflac continues to be the leader in Worksite Supplemental Health 1 with 23% 2 of the Market Share and over 2x larger than our nearest competitor. 159.2 Million 16.6 D2C Self-Employed 16.6 Publi
Slide 11: Investments Portfolio
Investments Portfolio
Slide 12: Commercial Real Estate Loan Portfolio
Commercial Real Estate Loan Portfolio1 As of 9/30/2023 Portfolio Statistics Portfolio Diversification TRE CML Total By Maturity Schedule By Geography By Property Type Net Book Value $6.2bn $1.7bn $7.9bn 4% 8% 6% 13% 8% 11% Book Yield 8.83% 3.31% 7.63% 25% 13% 342 bps 151 bps 300 bps 10% 40% Wtd Avg
Slide 13: Middle Market Loan Portfolio
Middle Market Loan Portfolio As of 9/30/2023 Portfolio Statistics Portfolio Diversification Net Book Value $4.7bn By Maturity Schedule By Sector By Current EBITDA Book Yield 10.64% 1% 19% 17% 12% 31% 30% Wtd. Avg. Spread 513bps 18% 11% Average Senior Leverage 5.0x 5% Average Loan Rating B+ 69% 4% 10
Slide 14: Capital Management & Deployment
Capital Management & Deployment
Slide 15: Strong Capital Ratios
Strong Capital Ratios Aflac Japan Solvency Margin Ratio Economic Solvency Ratio (Fiscal year ending March 31, %) (Fiscal year ending March 31, %) 1,200 300 250 961 941 68 51 800 881 917 889 200 86 84 86 201 150 177 Points from UFR 134 144 ESR 400 100 116 50 0 0 2019 2020 2021 2022 2023 2019 2020 202
Slide 16: Strong Capital Ratios
Strong Capital Ratios1 Aflac U.S. Aflac Combined Risk-Based Capital Ratio (Fiscal year ending December 31, %) 732 700 659 • RBC ratio is a book value framework 600 • Combined RBC estimated to be above 650% at the 531 550 500 end of 3Q23 400 • Target 400% Combined RBC over time through 300 growth of
Slide 17: Enhancing ROE
Enhancing ROE Internal reinsurance has a capital flow of capital injection, dividend payment, and reinsurance settlement. Aflac Incorporated • First transaction in January 2023 freed up ~$900 million of capital throughout enterprise Dividends Aflac Columbus » $400 million sent to Aflac Incorporated
Slide 18: 41 Consecutive Years of Increasing the Dividend
41 Consecutive Years of Increasing the Dividend $1.80 Annual Cash Dividend per Share $1.68 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 • 1Q24 quarterly dividend payable +19% • Annual di
Slide 19: Capital Deployment Under Stable Conditions
Capital Deployment Under Stable Conditions Tactical Deployment ($ billions) • Repurchased $2.1 billion of our shares in the first 9 $ 4.0 months of 2023 • Expected run-rate annualized insurance subsidiary 3.0 dividends of $2.6 billion to $3.0 billion1 • Deployable capital defined as excess capital a
Slide 20: Appendix
Appendix 20
Slide 21: 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 22: 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 return on equity is adjusted earnings divided by average shareholders’ equity, excluding accumulated other comprehensive income (AOCI). Management uses adjusted return on equity to ev
Slide 23: Effect of Foreign Currency on Adjusted Results
Effect of Foreign Currency on Adjusted Results Nine months ended September 30, 2023 Including Excluding Currency Currency2 Net premium income3 (5.6)% (0.6)% Adjusted net investment income1 (1.2)% 1.3% Total benefits and expenses (8.0)% (3.2)% Adjusted earnings1 7.3% 10.9% Adjusted earnings per dilut
Slide 24: Reconciliation of U.S. GAAP Return on Equity to Adjusted ROE
Reconciliation of U.S. GAAP Return on Equity to Adjusted ROE1 Nine Months Ended September 30, in millions of Dollars 2023 2022 U.S. GAAP ROE - Net earnings2 27.4% 30.4% Impact of excluding unrealized foreign currency translation gains (losses) (4.0) (3.7) Impact of excluding unrealized gains (losses
Slide 25: 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 Nine Months Ended September 30 2023 2022 % Change Net earnings per diluted share $7.28 $6.57 10.8% Items impacting net earnings: Adjusted net investment (gains) losses (2.26) (1.44) Other and non-recurring (incom
Slide 26: Reconciliation of Net Earnings to Adjusted Earnings
Reconciliation of Net Earnings to Adjusted Earnings1 Nine Months Ended September 30 in millions of Dollars 2023 2022 % Change Net earnings $4,391 $4,222 4.0% Items impacting net earnings: Adjusted net investment (gains) losses (1,363) (923) Other and non-recurring (income) loss (38) (1) Income tax (
Slide 27: Learn more: investors.aflac.com Contact us
Learn more: investors.aflac.com Contact us: Aflac Incorporated Investor and Rating Agency Relations 1932 Wynnton Road Columbus, GA 31999 tel: 706.596.3264 or 800.235.2667 or 011.81.3.3344.0481 in Japan AflacIR@aflac.com