Aflac Reports Significant Revenue Decline to $3.4 Billion in Q1 2025

Aflac Incorporated reported a significant decline in financial performance for the first quarter of 2025, with total revenues of $3.4 billion, down from $5.4 billion in the same period of 2024. This decrease was primarily attributed to net investment losses of $963 million, contrasting sharply with net investment gains of $951 million in the previous year. The company's net earnings fell to $29 million, or $0.05 per diluted share, compared to $1.9 billion, or $3.25 per diluted share, in the first quarter of 2024. Adjusted earnings for the quarter were $906 million, or $1.66 per diluted share, slightly down from $961 million, or $1.66 per diluted share, in the prior year.

In terms of operational metrics, Aflac Japan's net earned premiums decreased by 7.4% to $1.7 billion, while Aflac U.S. saw a modest increase of 1.8% to $1.5 billion. The overall decline in net earned premiums was influenced by internal reinsurance transactions and limited-pay products reaching premium paid-up status. The company also reported a decrease in adjusted net investment income, which fell to $586 million from $648 million, primarily due to lower floating rate income. Total adjusted revenues decreased by 8.1% year-over-year, reflecting the combined impact of reduced net earned premiums and adjusted net investment income.

Strategically, Aflac has continued to focus on its share repurchase program, buying back $900 million worth of shares during the first quarter, which included 8.5 million shares. As of March 31, 2025, the company had 38.8 million shares remaining authorized for repurchase. The company’s shareholders’ equity increased to $26.3 billion, or $48.55 per share, from $26.1 billion, or $47.45 per share, at the end of 2024. This increase was bolstered by a cumulative rise in the effect of changes in discount rate assumptions on insurance reserves.

Operationally, Aflac Japan reported over 22 million individual policies in force, with approximately 14 million cancer policies. The company also launched a new cancer insurance product, Miraito, in March 2025, which is expected to contribute to future sales growth. Aflac U.S. reported an increase in new annualized premium sales to $309 million, driven by group products. The company continues to emphasize digital sales strategies and has expanded its sales force, which included an average of approximately 5,100 agents actively producing business.

Looking ahead, Aflac remains focused on maintaining strong capital levels and liquidity, with $5.2 billion in cash and cash equivalents as of March 31, 2025. The company is committed to managing its investment portfolio effectively while navigating the challenges posed by fluctuating foreign exchange rates and market conditions. Aflac's management anticipates that its operational strategies and ongoing investments will position the company for recovery and growth in the coming quarters.