Aflac Delivers Solid Fourth Quarter: Dividend Raised 5.2%, Japan Sales Surge 15.7%

Dividend Increase and Resilient Capital Return Highlight Stability

Aflac’s fourth quarter results for 2025 spotlight the insurer’s commitment to shareholder rewards, operational discipline, and market adaptability.
For Q4, the board authorized a 5.2% increase in the first quarter 2026 dividend to $0.61 per share, reinforcing Aflac’s track record—now 43 consecutive years—of annual dividend increases. The company also returned $800 million to shareholders via share repurchases in the quarter, bringing annual repurchases to $3.5 billion.

Adjusted Earnings Per Share Holds Steady Despite Revenue Decline

While revenues and net earnings declined year-over-year, adjusted earnings per diluted share were up slightly (to $1.57), highlighting effective cost and capital management, even as investment income ran $12 million below long-term targets and the yen weakened modestly against the dollar. Shareholder equity grew 13% over the prior year, bolstered by discount rate assumption changes and ongoing share repurchases.

Japan Segment Drives Growth: Sales of New Products Jump 15.7% in Q4

The Japan segment remains a growth engine despite currency headwinds and pressures on investment returns. New annualized premium sales in Japan soared 15.7% in Q4—driven by strong demand for Miraito, Aflac’s new cancer insurance product. This momentum pushed full-year Japan sales up 16% to $498 million.

The growth was offset by slightly lower profit margins (31.3% vs. 31.6% a year ago) and reduced investment income, mainly from floating-rate assets. The weak yen had negligible effect on adjusted earnings per share thanks to hedging and operational discipline.

U.S. Segment Sees Higher Premiums and Consistent Sales Growth

In the United States, Aflac delivered a 4% increase in net earned premiums for Q4, the result of strong sales, particularly in group voluntary products. New sales increased 3.1% to $551 million for the quarter. Full-year U.S. sales edged up 3%, demonstrating solid demand in a competitive market.

Persistency (the share of premiums retained over 12 months) remained strong at 79.2%. Despite margin pressure from higher benefits and expenses, Aflac attributes growth to disciplined underwriting and an efficient distribution network.

Shareholder Equity Strengthens as Adjusted ROE Remains Healthy

Shareholder equity rose to $29.49 billion at year-end, up 13% from the previous year. Adjusted book value per share (excluding AOCI) ended at $54.06, a 2.3% increase. Annualized adjusted return on equity (ROE), excluding foreign currency remeasurement, was 14.5% in Q4—consistent with the prior year and signaling efficient capital deployment even in a challenging environment.

Takeaway: Positioned for Growth, Focused on Value Creation

Aflac’s latest results underscore a strategy centered on capital returns and product innovation—particularly in Japan, where new sales trends are robust. The company’s ability to grow book value, steadily lift dividends, and invest in new business while navigating lower revenues and higher expenses points to resilience.
As Aflac sets its sights on continued growth in younger markets with modernized product offerings, investors may want to monitor further progress in Japan, margin trends in the U.S., and the durability of Aflac's capital management policy. The 43-year streak of dividend hikes cements its appeal as a defensive, shareholder-friendly holding in the insurance sector.

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