XML 39 R29.htm IDEA: XBRL DOCUMENT

POLICY LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of Changes in Present Value of Expected Net Premiums and Expected Future Policy Benefits

The following tables present the changes in the present value of expected net premiums and the present value of expected future policy benefits by reporting segment and disaggregated by product type


	June 30, 2023
	Aflac Japan								Aflac U.S.
(In millions)	Cancer		Medical and Other Health		Life Insurance		Other		Accident		Disability		Critical Care		Hospital Indemnity		Dental/Vision		Life Insurance		Other
Present value of expected premiums:
Balance at December 31, 2022	$	19,298	$	16,714	$	7,485	$	1,256	$	2,534	$	1,635	$	4,486	$	1,220	$	211	$	724	$	110
Beginning balance at original discount rate	18,221		16,195		7,284		1,242		2,760		1,775		5,050		1,365		231		799		118
Effect of changes in cash flow assumptions	0		0		0		0		0		0		0		0		0		0		0
Effect of actual variances from expected experience	(198)		(61)		(22)		(5)		(51)		(15)		(139)		(44)		(11)		(9)		0
Adjusted beginning of period balance	18,023		16,134		7,262		1,237		2,709		1,760		4,911		1,321		220		790		118
Issuances	498		204		198		14		185		204		291		153		20		90		55
Interest accrual	218		180		66		11		51		30		94		23		4		14		3
Net premiums earned (1)	(824)		(673)		(549)		(60)		(237)		(193)		(298)		(127)		(20)		(65)		(8)
Foreign currency translation	(1,521)		(1,348)		(597)		(104)		0		0		0		0		0		0		0
Other	0		0		0		0		(3)		(3)		(2)		(1)		2		2		9
Ending balance at original discount rate	16,394		14,497		6,380		1,098		2,705		1,798		4,996		1,369		226		831		177
Effect of changes in discount rate assumptions	1,579		1,135		335		47		(201)		(129)		(497)		(129)		(17)		(68)		(8)
Balance at June 30, 2023	$	17,973	$	15,632	$	6,715	$	1,145	$	2,504	$	1,669	$	4,499	$	1,240	$	209	$	763	$	169
Present value of expected future policy benefits:
Balance at December 31, 2022	$	54,766	$	27,419	$	31,954	$	5,582	$	3,098	$	2,445	$	11,489	$	2,074	$	488	$	1,526	$	622
Beginning balance at original discount rate	47,677		27,566		32,800		5,940		3,391		2,636		12,846		2,300		532		1,778		624
Effect of changes in cash flow assumptions	0		0		0		0		0		0		0		0		0		0		0
Effect of actual variances from expected experience	(232)		(65)		(26)		(2)		(65)		(23)		(166)		(58)		(14)		(12)		(1)
Adjusted beginning of period balance	47,445		27,501		32,774		5,938		3,326		2,613		12,680		2,242		518		1,766		623
Issuances	509		211		201		17		194		212		302		162		23		94		55
Interest accrual	779		323		329		53		63		48		267		43		10		33		16
Benefit payments	(1,592)		(647)		(808)		(107)		(225)		(233)		(446)		(137)		(30)		(56)		(23)
Foreign currency translation	(4,000)		(2,323)		(2,759)		(500)		0		0		0		0		0		0		0
Other	0		0		0		0		0		0		0		0		2		4		9
Ending balance at original discount rate	43,141		25,065		29,737		5,401		3,358		2,640		12,803		2,310		523		1,841		680
Effect of changes in discount rate assumptions	8,551		1,462		670		(25)		(264)		(176)		(1,166)		(201)		(39)		(228)		6
Balance at June 30, 2023	51,692		26,527		30,407		5,376		3,094		2,464		11,637		2,109		484		1,613		686
Net liability for future policy benefits	33,719		10,895		23,692		4,231		590		795		7,138		869		275		850		517
Less: reinsurance recoverable	2,130		1,580		0		0		0		0		0		0		0		11		1
Net liability for future policy benefits after reinsurance recoverable	$	31,589	$	9,315	$	23,692	$	4,231	$	590	$	795	$	7,138	$	869	$	275	$	839	$	516

(1) Net premiums earned represent the portion of gross premiums collected from policyholders that is used to fund expected benefit payments.


	December 31, 2022
	Aflac Japan								Aflac U.S.
(In millions)	Cancer		Medical and Other Health		Life Insurance		Other		Accident		Disability		Critical Care		Hospital Indemnity		Dental/Vision		Life Insurance		Other
Present value of expected premiums:
Balance at December 31, 2021	$	25,893	$	21,174	$	10,847	$	1,586	$	3,283	$	1,862	$	6,023	$	1,467	$	264	$	834	$	153
Beginning balance at original discount rate	22,470		18,681		10,064		1,461		2,999		1,760		5,391		1,380		241		780		135
Effect of changes in cash flow assumptions	(639)		317		(494)		25		(52)		5		(38)		42		10		(1)		(12)
Effect of actual variances from expected experience	(284)		61		(81)		(10)		(152)		(43)		(421)		(111)		(20)		(16)		6
Adjusted beginning of period balance	21,547		19,059		9,489		1,476		2,795		1,722		4,932		1,311		231		763		129
Issuances	947		639		221		62		355		384		537		273		33		146		0
Interest accrual	459		364		146		22		105		57		193		45		9		27		5
Net premiums earned (1)	(1,734)		(1,376)		(1,229)		(123)		(496)		(382)		(612)		(261)		(42)		(131)		(17)
Foreign currency translation	(2,997)		(2,488)		(1,343)		(195)		0		0		0		0		0		0		0
Other	(1)		(3)		0		0		1		(6)		0		(3)		0		(6)		1
Ending balance at original discount rate	18,221		16,195		7,284		1,242		2,760		1,775		5,050		1,365		231		799		118
Effect of changes in discount rate assumptions	1,077		519		201		14		(226)		(140)		(564)		(145)		(20)		(75)		(8)
Balance at December 31, 2022	$	19,298	$	16,714	$	7,485	$	1,256	$	2,534	$	1,635	$	4,486	$	1,220	$	211	$	724	$	110
Present value of expected future policy benefits:
Balance at December 31, 2021	$	72,747	$	36,021	$	42,720	$	7,322	$	3,949	$	2,871	$	15,388	$	2,552	$	616	$	1,843	$	837
Beginning balance at original discount rate	56,807		31,398		39,002		6,787		3,594		2,670		13,079		2,300		549		1,694		645
Effect of changes in cash flow assumptions	(721)		352		(550)		96		(70)		5		(43)		40		13		(1)		(15)
Effect of actual variances from expected experience	(333)		83		(91)		(10)		(177)		(48)		(465)		(130)		(23)		(21)		7
Adjusted beginning of period balance	55,753		31,833		38,361		6,873		3,347		2,627		12,571		2,210		539		1,672		637
Issuances	960		646		222		68		364		397		550		282		34		149		0
Interest accrual	1,599		642		670		106		128		94		539		85		21		62		32
Benefit payments	(3,050)		(1,375)		(1,248)		(202)		(456)		(483)		(823)		(277)		(62)		(103)		(45)
Foreign currency translation	(7,585)		(4,180)		(5,205)		(905)		0		0		0		0		0		0		0
Other	0		0		0		0		8		1		9		0		0		(2)		0
Ending balance at original discount rate	47,677		27,566		32,800		5,940		3,391		2,636		12,846		2,300		532		1,778		624
Effect of changes in discount rate assumptions	7,089		(147)		(846)		(358)		(293)		(191)		(1,357)		(226)		(44)		(252)		(2)
Balance at December 31, 2022	54,766		27,419		31,954		5,582		3,098		2,445		11,489		2,074		488		1,526		622
Net liability for future policy benefits	35,468		10,705		24,469		4,326		564		810		7,003		854		277		802		512
Less: reinsurance recoverable	0		1,579		0		0		0		0		0		0		0		9		0
Net liability for future policy benefits after reinsurance recoverable	$	35,468	$	9,126	$	24,469	$	4,326	$	564	$	810	$	7,003	$	854	$	277	$	793	$	512

(1) Net premiums earned represent the portion of gross premiums collected from policyholders that is used to fund expected benefit payments.

Schedule of Weighted-Average Interest Rate and Liability for Future Policy Benefit

The following tables present the weighted-average interest rates and weighted-average liability duration (calculated using the original discount rate) by reporting segment and disaggregated by product type.


	June 30, 2023
	Aflac Japan				Aflac U.S.
	Cancer	Medical and Other Health	Life Insurance	Other	Accident	Disability	Critical Care	Hospital Indemnity	Dental/Vision	Life Insurance	Other
Weighted-average interest, original discount rate (1)	3.9 %	2.5 %	2.1 %	1.8 %	3.9 %	4.2 %	4.6 %	4.4 %	4.3 %	3.7 %	5.4 %
Weighted-average interest, current discount rate (1)	1.6 %	2.1 %	1.6 %	1.9 %	5.2 %	5.3 %	5.2 %	5.2 %	5.2 %	5.2 %	5.2 %
Weighted-average liability duration (years)	13.6	26.4	17.1	17.8	8.4	5.6	11.8	9.5	8.0	12.8	9.4

(1) The weighted-average interest rates are calculated using the reserve balances as the weights. No adjustments were made to observable market information.


	December 31, 2022
	Aflac Japan				Aflac U.S.
	Cancer	Medical and Other Health	Life Insurance	Other	Accident	Disability	Critical Care	Hospital Indemnity	Dental/Vision	Life Insurance	Other
Weighted-average interest, original discount rate (1)	4.1 %	2.6 %	2.1 %	1.8 %	3.8 %	4.2 %	4.6 %	4.4 %	4.3 %	3.7 %	5.4 %
Weighted-average interest, current discount rate (1)	1.6 %	2.2 %	1.6 %	1.9 %	4.8 %	4.7 %	4.8 %	4.8 %	4.8 %	4.8 %	4.8 %
Weighted-average liability duration (years)	13.7	26.9	17.3	18.2	8.5	5.6	12.0	9.4	8.1	13.1	9.6

(1) The weighted-average interest rates are calculated using the reserve balances as the weights. No adjustments were made to observable market information.

Reconciliation of Future Policy Benefits

The following table presents a reconciliation of the disaggregated rollforwards above to the ending future policy benefits presented in the Consolidated Balance Sheets. The deferred profit liability for limited-payment contracts and the deferred profit liability for reinsurance is presented together with the liability for future policy benefits in the Consolidated Balance Sheets and has been included as a reconciling item in the table below.


(In millions)	June 30, 2023			December 31, 2022
Balances included in future policy benefits rollforward:
Aflac Japan
Cancer		$	33,719		$	35,468
Medical and other health		10,895			10,705
Life insurance		23,692			24,469
Other		4,231			4,326
Aflac U.S.
Accident		590			564
Disability		795			810
Critical care		7,138			7,003
Hospital indemnity		869			854
Dental/vision		275			277
Life insurance		850			802
Other		517			512
Corporate and other		2,696			686
Deferred profit liability - limited-payment contracts		1,697			1,740
Deferred profit liability - reinsurance		620			692
Intercompany eliminations (1)		(2,680)			(667)
Total		$	85,904		$	88,241

(1) Elimination entry necessary due to the internal reinsurance transaction with Aflac Re and to recapture of a portion of policy liabilities ceded externally as a result of the reinsurance retrocession transaction. See Note 8 of the Notes to the Consolidated Financial Statements.

Summary of Net Earned Premiums Recognized

The following table summarizes the amount of net earned premiums recognized in the Consolidated Statements of Earnings by reporting segment and disaggregated by product type.


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Net earned premiums:
Aflac Japan
Cancer	$	1,054	$	1,193	$	2,149	$	2,528
Medical and other health	672		735		1,377		1,563
Life insurance	390		459		812		983
Other	38		42		77		85
Aflac U.S.
Accident	322		329		652		665
Disability	318		295		627		591
Critical care	439		439		882		885
Hospital indemnity	182		183		367		368
Dental/vision	53		50		107		99
Life insurance	115		99		228		197
Other	9		9		19		19
Corporate and other	84		36		175		82
Reinsurance ceded	(103)		(105)		(210)		(221)
Total	$	3,573	$	3,764	$	7,262	$	7,844

Summary of Interest Expense Related to Insurance Contracts Recognized

The following table summarizes the amount of interest expense related to insurance contracts recognized in total benefits and claims, net in the Consolidated Statements of Earnings by reporting segment and disaggregated by product type.


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2023		2022		2023		2022
Interest expense:
Aflac Japan
Cancer	$	276	$	296	$	561	$	626
Medical and other health	72		73		143		151
Life insurance	130		136		263		285
Other	20		21		42		45
Aflac U.S.
Accident	6		5		12		12
Disability	10		9		18		19
Critical care	86		86		173		172
Hospital indemnity	10		10		20		20
Dental/vision	3		3		6		7
Life insurance	10		8		19		17
Other	6		7		13		13

Total	$	629	$	654	$	1,270	$	1,367

Summary of Undiscounted and Discounted Expected Future Gross Premiums and Future Benefits and Expenses

The following tables summarize the amount of undiscounted expected future gross premiums and expected future benefits and expenses and discounted (discounted at the current period discount rate) expected future gross premiums and expected future benefits and expenses by reporting segment and disaggregated by product type. Future gross premiums represent the expected amount of future premiums to be received. For limited-payment policies, the premiums are collected over a shorter period than the policy term over which benefits are provided. As a result, once the policy reaches premium paid-up status, the future gross premiums can be significantly less than the future benefit payments. Further, benefits and expenses are generally greater in the later years of a policy. These are the primary factors that result in future gross premiums lower than future benefit and expense payments for certain lines of business of the Company.


	June 30, 2023						December 31, 2022
(In millions)	Gross Premiums			Benefits and Expenses			Gross Premiums			Benefits and Expenses
Undiscounted expected future gross premiums and expected future benefits and expenses:
Aflac Japan
Cancer		$	74,340		$	83,000		$	75,529		$	84,246
Medical and other health		49,626			50,445			50,720			50,778
Life insurance		16,406			52,836			16,946			53,271
Other		2,279			9,337			2,322			9,433
Aflac U.S.
Accident		9,408			4,602			9,481			4,636
Disability		5,886			3,288			5,858			3,267
Critical care		21,050			22,022			21,069			22,113
Hospital indemnity		5,199			3,359			5,164			3,338
Dental/vision		1,180			749			1,208			759
Life insurance		2,502			2,926			2,375			2,787
Other		429			1,222			333			1,147
Total		$	188,305		$	233,786		$	191,005		$	235,775


	June 30, 2023						December 31, 2022
(In millions)	Gross Premiums			Benefits and Expenses			Gross Premiums			Benefits and Expenses
Discounted expected future gross premiums and expected future benefits and expenses:
Aflac Japan
Cancer		$	49,689		$	51,692		$	53,278		$	54,766
Medical and other health		32,246			26,527			34,693			27,419
Life insurance		11,730			30,407			12,951			31,954
Other		1,570			5,376			1,697			5,582
Aflac U.S.
Accident		6,494			3,094			6,510			3,098
Disability		4,493			2,464			4,468			2,445
Critical care		12,785			11,637			12,659			11,489
Hospital indemnity		3,532			2,109			3,483			2,074
Dental/vision		805			484			821			488
Life insurance		1,757			1,613			1,663			1,526
Other		292			686			228			622
Total		$	125,393		$	136,089		$	132,451		$	141,463

Schedule of Changes in Other Policyholders' Funds

The following table presents the changes in other policyholders’ funds.


(In millions)	June 30, 2023		December 31, 2022
Other policyholders' funds:
Fixed annuities account balance, beginning of period (1)	$	6,423	$	7,410
Premiums received	65		150
Transfers from WAYS conversions	107		214
Surrenders and withdrawals	(27)		(52)
Benefit payments	(187)		(367)
Interest credited	26		57
Foreign currency translation and other	(543)		(989)
Fixed annuities account balance, end of period	5,864		6,423
Other deposit type reserves	251		220
Total	$	6,115	$	6,643

(1) Aflac Japan fixed annuities

Schedule of Other Policyholders' Funds by Guaranteed Crediting Rates

The following table presents other policyholders’ funds balances by range of guaranteed crediting rates.

June 30, 2023

December 31, 2022

(In millions)

Range of Guaranteed Minimum Crediting Rates (2)

At Guaranteed Minimum

Cash Surrender Value

Range of Guaranteed Minimum Crediting Rates (2)

At Guaranteed Minimum

Cash Surrender Value

Fixed annuities (1)

0.5% - 2.3%

$5,864

$5,771

0.5% - 2.3%

$6,423

$6,326

(1) Aflac Japan fixed annuities

(2) Weighted-average crediting rate of 1.5% at June 30, 2023 and December 31, 2022.