AFL reported adjusted earnings per share of USD 1.57 for the fourth quarter, up 0.6% on the previous year, but below consensus estimates.
AFL's revenue fell by 9.9% to USD 4.9 billion as net investment income declined and operating costs increased.
AFL's premium revenue in Japan increased by 15.7%, while US revenue declined due to higher employee benefits and expenses.
AFL's performance in the fourth quarter
Adjusted net investment income decreased by 4.4% year-on-year to USD 920 million in the period under review.
The
Net benefits and claims totaled USD 1.9 billion, a decrease of 1.1% year-on-year. Total acquisition and operating costs increased by 3.5% year-on-year to USD 1.4 billion.
Profit before tax fell by 26.4% year-on-year to USD 1.6 billion.
AFL outlook 2026
Aflac currently anticipates a benefit ratio of 60-63% for the Japanese Aflac unit in 2026. A value in the range of 48-52% is forecast for the US Aflac unit.
The cost ratio for Aflac Japan is estimated at 20-23%. The underlying earned premiums for the Japanese unit are expected to fall by 1-2 % in 2026 compared to the previous year. Net premiums for the US unit are likely to be at the lower end of the 3-6% range.
The pre-tax profit margin for Aflac Japan is estimated at 33-36%, while for Aflac US it is expected to be in the range of 17-20% in 2026.
Over longer periods of time, however, Aflac generates robust profits. The company is therefore increasing its quarterly dividend this year by 5.2 percent to 0.61 dollars (0.52 euros). This marks the 44th consecutive year of dividend increases, and the new dividend yield is a solid 2.2 percent based on the current share price.
