Aflac has reported its second-quarter 2025 results, showing total revenues of $4.2 billion, down from $5.1 billion in Q2 2024, largely due to net investment losses of $421 million versus gains of $696 million in the year‑ago quarter.
Net earnings were $599 million compared with $1.8 billion in the year‑earlier period.
The net investment losses comprised $452 million in losses on derivatives and foreign currency activities; $58 million of CECL; impairments of $6 million; and $3 million in losses from sales and redemptions, partially offset by a $98 million gain from equity securities value appreciation.
Adjusted earnings totaled $957 million, down 7.5%, with adjusted EPS falling 2.7% to $1.78. Variable investment income missed long‑term expectations by $35 million. The company’s Japan segment posted $35 million in net investment income from a make‑whole call, and the stronger yen/dollar rate added $0.04 to adjusted EPS.
Revenue for the first half of 2025 declined 28.5% to $7.6 billion from $10.6 billion a year earlier. Net earnings were $628 million, down from $3.6 billion in H1 2024. Adjusted earnings reached $1.9 billion, compared with $2 billion in the prior year. Excluding the forex impact, adjusted EPS slipped to $3.41.
In Q1 2025, Aflac generated $3.4 billion in revenue, down from $5.4 billion in Q1 2024, primarily due to net investment losses of $963 million compared with gains of $951 million in the prior year. Net earnings collapsed to $29 million from $1.9 billion – a nearly 98.5% decline.
Despite the earnings drop in the quarter, however, Aflac returned $1.2 billion to shareholders, including $317 million in share repurchases and $900 million in dividend payouts.
In its Japan operations, net earned premiums were ¥254.6 billion, down 4.8%, with adjusted investment income down 10.5% to ¥101.1 billion. Total adjusted revenues fell 6.2% to ¥357.5 billion, and pretax adjusted earnings declined 15.0% to ¥114.3 billion.
The pretax adjusted margin stood at 32.0%, compared with 35.3% a year ago. Six‑month results showed similar contraction across premiums, investment income, revenues, and pretax earnings.
In the US, net earned premiums rose 3.4% to $1.5 billion, driven by stronger sales and persistency. Adjusted net investment income declined 5% to $207 million, pulling total adjusted revenues to $1.7 billion, up 2.6%.
Pretax adjusted earnings rose to $388 million, a 1.3% increase, amid higher premiums offset by elevated benefits, lower investment income, and increased expenses. The segment’s pretax adjusted margin was 22.5%, nearly flat with the prior year. USnew sales grew 2.7% to $340 million in Q2 and 3.1% to $649 million in H1.
Chairman and CEO Daniel P. Amos (pictured above) said the company maintained focus on profitable growth in the US and Japan via distribution strategies and product updates.
“We treasure our 2024 milestone of 42 consecutive years of dividend increases and remain committed to extending this record, supported by our financial strength,” he said. “We intend to continue our balanced approach of investing in growth and driving long-term operating efficiencies."
Elsewhere, Aflac also disclosed last month that it detected suspicious activity on its US network, later attributed to a sophisticated cybercrime group, as part of a broader campaign targeting insurers.
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