Key Highlights

  • Aflac (NYSE:AFL) reported third-quarter net Earnings of USD 303 million, or USD 0.61 per diluted share, down 81.5% from USD 1.6 billion, or USD 3.08, after USD 1.1 billion of net Investment losses.
  • Adjusted earnings, a non-GAAP measure, were USD 1.21 billion, down 8.5%, while adjusted earnings per diluted share fell 2.4% to USD 2.43 and included USD 453 million of reserve remeasurement gains.
  • Aflac U.S. pretax adjusted earnings rose 31.5% to USD 493 million, while Aflac Japan pretax adjusted earnings fell 21.0% in dollars to USD 961 million.
  • The company returned USD 1.1 billion to shareholders, split between USD 804 million of repurchases and USD 305 million of dividends, and declared a fourth-quarter Dividend of USD 0.61.

Portfolio Repositioning Drives USD 1.1 Billion of Investment Losses

Aflac (NYSE:AFL) announced third-quarter results on November 4, 2026. Total revenues fell 31.0% to USD 3.27 billion, and the company attributes the drop in net earnings primarily to realized losses from the strategic repositioning of its investment portfolio. Net investment losses totaled USD 1.1 billion, or USD 2.15 per share, including USD 842 million from sales and redemptions, USD 146 million on certain Derivatives and foreign currency activity, and USD 102 million of expected Credit losses. A USD 51 million valuation allowance on tax Capital loss carryforwards cut another USD 0.10 per share. Annualized return on average Equity was 4.1%. Adjusted earnings strip out such investment items, which is why the two measures diverge.

Japan Margin Slips as the U.S. Business Strengthens

Aflac Japan's pretax adjusted earnings fell 15.2% in yen to 152 billion yen, mainly because of lower reserve remeasurement gains from unlocking actuarial assumptions and higher benefits, and its profit margin narrowed to 44.4% from 52.2%. Net earned premiums slipped 2.0% in yen, and sales fell 4.0% against strong prior-year Miraito cancer insurance sales. In the U.S., net earned premiums rose 3.3% to USD 1.54 billion, sales rose 3.5% to USD 403 million and the margin widened to 27.7% from 21.7%, helped by higher reserve remeasurement gains. The yen averaged 158.49 per dollar, 6.8% weaker than a year earlier, a USD 0.03 per share drag on adjusted earnings. Aflac Japan also ceded about 500 billion yen of cancer reserves to Aflac Re Bermuda.

USD 1.1 Billion Capital Return and 44 Years of Dividend Increases

The fourth-quarter dividend of USD 0.61 per share is payable on December 1, 2026 to holders of record on November 18, extending a record of 44 consecutive years of dividend increases. Shareholders' equity was USD 29.3 billion, or USD 59.08 per share, and adjusted Book Value excluding accumulated other comprehensive income was USD 54.21 per share. Excluding foreign currency remeasurement, adjusted book value fell to USD 40.73 per share from USD 43.52, and annualized adjusted Return on Equity on that basis was 23.7%. For nine months, adjusted Earnings Per Share were unchanged at USD 5.92, or USD 6.02 excluding currency effects, up 1.7%. The Earnings Call is scheduled for November 5, 2026.

Where Things Stand

Realized investment losses from repositioning the portfolio, not weaker insurance operations, explain the plunge. Aflac (NYSE:AFL) kept adjusted earnings per share within 2.4% of last year while net earnings fell 81.5%, and the U.S. segment improved as Japan margins narrowed. The adjusted figure included USD 453 million of reserve remeasurement gains, which depend on actuarial assumptions, so Quality of Earnings deserves attention. Next markers are the November 5 call, the December 1 dividend payment, yen movements and further portfolio changes.