Aflac Incorporated (AFL) Business Profile

What it does

Aflac provides supplemental health and life insurance to individuals and employers in Japan and the United States. Its policies are designed to provide financial protection when someone becomes sick, is injured or dies. Eligible claims generally pay cash benefits that customers can use for costs their primary insurance may not cover.

In Japan, Aflac sells cancer, medical and nursing care coverage, as well as life insurance and products with savings features. Its cancer policies can pay a lump sum upon diagnosis and benefits for subsequent treatment. Medical policies cover events such as hospital stays and surgeries. Japan’s national health insurance system provides primary coverage, while Aflac’s supplemental products help with unreimbursed medical and nonmedical costs.

In the U.S., Aflac sells individual and group policies covering accidents, disability, cancer, critical illness and hospitalization. It also offers dental, vision and life insurance. Its U.S. policies pay benefits regardless of other insurance coverage, and individual policies can generally stay with customers when they leave an employer.

Aflac was founded in 1955 and is headquartered in Columbus. Daniel P. Amos is chairman and chief executive officer. The company operates through Aflac Japan and Aflac U.S., supported by asset management and reinsurance businesses.

How it makes money

Aflac earns revenue principally from insurance premiums and investments. It seeks to price policies so premiums and investment returns support the benefits it pays, the reserves it sets aside for future claims, and the costs of selling and administering coverage. Profitability also depends on claims experience, policyholder behavior, investment results and expenses.

Aflac Japan is the principal contributor to consolidated earnings. Its supplemental cancer and medical products provide benefits for specified diagnoses and treatments. It also sells life insurance, including protection policies and savings-type products. Aflac U.S. sells supplemental coverage to individuals and groups, including accident, disability, hospital indemnity, dental, vision and life policies.

Premiums can recur as policies remain in force. U.S. individual policies are typically guaranteed-renewable for the policyholder’s lifetime, with a different age limit for short-term disability policies. Some Japanese policies eventually become paid-up, so they remain in force without generating further premiums. Sales agents and brokers receive commissions and other variable compensation based on first-year and renewal premiums.

Aflac invests assets that support its insurance liabilities. Its asset management subsidiaries manage U.S. investments and Japanese investments under advisory arrangements. Aflac Re reinsures certain policies issued by Aflac Japan; Aflac also entered an external transaction involving a block of whole-life annuities from Japan Post Insurance.

For 2025, total revenues were $17.2 billion; for the third quarter of 2026, net earnings were 61 cents per diluted share. In the third quarter of 2026, Aflac Japan ceded approximately 500 billion yen of cancer insurance reserves to Aflac Re on a Japanese regulatory basis. Aflac estimates the transaction will release approximately $1 billion of capital over time.

Customers and how it sells

Aflac serves millions of policyholders and customers in Japan and the U.S. Japan is its largest insurance market: Aflac Japan accounted for 53% of total adjusted revenues in 2025 and 76% of total assets at December 31, 2025. The company is authorized to conduct insurance business in Japan, all 50 U.S. states, the District of Columbia and several U.S. territories.

In Japan, customers can buy through individual and corporate agencies, alliance partners and banks. At the end of 2025, Aflac Japan was represented by approximately 6,300 sales agencies with approximately 112,000 licensed sales associates. Japan Post Group offers Aflac’s cancer product through postal outlets and insurance operations, while Dai-ichi Life and Daido Life representatives also distribute cancer coverage. Aflac Japan had agreements with approximately 90% of Japan’s banks to sell its products at December 31, 2025.

In the U.S., Aflac primarily markets insurance at the worksite. Career agents focus on small employers, while brokers focus on mid-sized and large employers. The company is also using digital lead generation to reach consumers outside the traditional worksite. Group sales tend to be concentrated around employer open-enrollment periods.

Suppliers and costs

Aflac’s principal operating costs are insurance benefits and reserves for future benefits, general business expenses, commissions, and the costs of selling and servicing policies. Its U.S. sales associates and brokers are independent contractors whose compensation includes commissions tied to first-year and renewal premiums.

The company uses third-party asset managers to source, underwrite and manage commercial mortgage and other loans, including any real estate acquired following defaults. Aflac also manages investments through its own asset management subsidiaries. Its workforce included 12,716 full-time employees at December 31, 2025, and compensation and benefit expense totaled approximately $2.1 billion in 2025.

Claims experience and policyholder behavior affect the cost of providing insurance. The company also incurs costs to maintain its systems and meet insurance, privacy and cybersecurity requirements. In the third quarter of 2026, its results included $40 million of cybersecurity expenses and enhancements in Japan.

Competitive position

Aflac competes with other insurance carriers on product design, price, policyholder service and sales efforts. In Japan, more insurers have entered the stand-alone cancer and medical insurance market since deregulation. In the U.S., Aflac faces national and regional supplemental insurers and major medical carriers entering supplemental products with bundled and discounted offerings. No competing carrier is named in the available company disclosures.

Aflac Japan is the largest insurer in Japan by cancer and medical policies in force. Its distribution includes agencies, banks and alliances such as Japan Post Group. Aflac also uses the Aflac Duck in marketing campaigns in both Japan and the U.S.

Our reading: Aflac’s Japanese distribution network is a meaningful competitive advantage because it reaches customers through several established channels, although those channels do not prevent other insurers from selling competing policies. Our reading: Its brand and experience in cancer coverage support recognition, but the evidence does not establish that they insulate the company from price or product competition. Our reading: Its U.S. worksite relationships and portable individual policies can support customer retention, while competing carriers’ bundled offerings can challenge new sales.

Growth opportunities

Aflac’s growth strategy centers on developing products, expanding distribution and improving efficiency through technology and operational changes. In Japan, it launched the Miraito cancer product in March 2025 and the Anshin Palette medical product in December 2025, both offering customers choices about coverage. The company also sells Tsumitasu, a product designed primarily for post-retirement preparation with savings and nursing care features.

Aflac says Tsumitasu helps expand its customer base and supports concurrent sales of cancer and medical insurance. It plans to use its distribution channels to reach customers at different stages of life. Aflac expects Japan sales in 2026 to exceed 2025 sales. In the third quarter of 2026, Japan sales declined 4% to 18.8 billion yen from the prior-year quarter, while sales were up 3% for the first nine months of the year.

In the U.S., Aflac is expanding beyond worksite distribution through digital lead generation and developing group life, disability and network dental offerings. U.S. sales increased 3.5% year over year in the third quarter of 2026.

The company also sees external reinsurance as an opportunity over time. Aflac Re assumed a block of whole-life annuities from Japan Post Insurance, and Aflac expects its external reinsurance business to become material over time.

Structural risks

• Japan concentration and currency: Aflac Japan represents a substantial share of the company’s business and assets. Changes in Japan’s economy or government bond market can affect operations and investments. Yen movements also affect the U.S. dollar value of Japanese results and can cause earnings and capital volatility.
• Interest rates and investments: Changes in interest rates affect investment values, income, insurance liabilities and capital. Credit downgrades, defaults or weaker commercial real estate values can also reduce earnings and capital. Aflac has increased loan reserves in response to pressure on property valuations and expectations for middle-market loans.
• Insurance and customer behavior: Profitability depends on claims experience and the assumptions used to price and reserve policies. Customers may cancel or modify discretionary supplemental coverage during economic downturns; higher interest rates can also encourage surrenders of some savings products.
• Cybersecurity: In 2025, unauthorized access to U.S. systems involved personal information associated with approximately 22.65 million individuals. Aflac has incurred response costs and may face further costs from litigation, investigations or other consequences. In Japan, direct mail and outbound calls were suspended following an incident and resumed in September.
• Regulation and capital: Insurers face solvency, reserve, investment and other regulatory requirements. Dividend distributions from Aflac Japan to the parent are subject to permitted dividend capacity, and investment or currency changes can affect regulatory capital and dividend capacity.

Bottom line

Our reading

Aflac combines recurring supplemental insurance premiums with investment income, with Japan contributing the largest share of adjusted revenue and the U.S. providing a separate worksite-focused business. Its Japanese distribution network and established cancer and medical coverage support its reach, while competition remains present in both markets (item1; item1a; item7).

The business also depends on claims and investment outcomes, with yen movements, interest rates, credit losses and regulatory capital affecting results and the cash available to the parent (item1a; item7).