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 future net premiums and the present value of expected future policy benefits by reporting segment and disaggregated by product type for the years ended December 31. The present value of expected future net premiums and the present value of expected future policy benefits are presented gross of internal and external ceded reinsurance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 future net 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 | (165) | | (470) | | 43 | | (12) | | | (16) | | (51) | | (494) | | (142) | | (9) | | 61 | | (9) | | Effect of actual variances from expected experience | (315) | | (137) | | (42) | | (15) | | | (58) | | (29) | | (223) | | (73) | | (17) | | (25) | | (2) | | Adjusted beginning of period balance | 17,741 | | 15,588 | | 7,285 | | 1,215 | | | 2,686 | | 1,695 | | 4,333 | | 1,150 | | 205 | | 835 | | 107 | | Issuances | 1,034 | | 418 | | 335 | | 26 | | | 323 | | 376 | | 493 | | 249 | | 44 | | 181 | | 169 | | Interest accrual | 412 | | 334 | | 124 | | 20 | | | 102 | | 62 | | 179 | | 45 | | 8 | | 31 | | 6 | | Net premiums collected (1) | (1,564) | | (1,261) | | (1,017) | | (112) | | | (473) | | (390) | | (580) | | (247) | | (39) | | (137) | | (17) | | Foreign currency translation | (1,170) | | (1,038) | | (469) | | (80) | | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Other | (1) | | (1) | | 0 | | 0 | | | (8) | | (5) | | (9) | | (4) | | (1) | | (1) | | 7 | | Ending balance at original discount rate | 16,452 | | 14,040 | | 6,258 | | 1,069 | | | 2,630 | | 1,738 | | 4,416 | | 1,193 | | 217 | | 909 | | 272 | | Effect of changes in discount rate assumptions | 1,057 | | 657 | | 230 | | 19 | | | (142) | | (86) | | (342) | | (86) | | (11) | | (56) | | 5 | | Balance at December 31, 2023 | $ | 17,509 | | $ | 14,697 | | $ | 6,488 | | $ | 1,088 | | | $ | 2,488 | | $ | 1,652 | | $ | 4,074 | | $ | 1,107 | | $ | 206 | | $ | 853 | | $ | 277 | | 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 | (147) | | (507) | | 65 | | (27) | | | (11) | | (59) | | (592) | | (194) | | (14) | | 72 | | (13) | | Effect of actual variances from expected experience | (385) | | (154) | | (51) | | (15) | | | (75) | | (59) | | (271) | | (99) | | (22) | | (32) | | (4) | | Adjusted beginning of period balance | 47,145 | | 26,905 | | 32,814 | | 5,898 | | | 3,305 | | 2,518 | | 11,983 | | 2,007 | | 496 | | 1,818 | | 607 | | Issuances | 1,059 | | 432 | | 341 | | 32 | | | 331 | | 392 | | 505 | | 258 | | 46 | | 185 | | 169 | | Interest accrual | 1,473 | | 608 | | 625 | | 100 | | | 127 | | 96 | | 524 | | 84 | | 21 | | 68 | | 33 | | Benefit payments | (2,987) | | (1,153) | | (1,415) | | (206) | | | (464) | | (465) | | (893) | | (274) | | (59) | | (105) | | (48) | | Foreign currency translation | (3,064) | | (1,769) | | (2,109) | | (380) | | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | Other | 0 | | 0 | | 0 | | 0 | | | 3 | | 0 | | 1 | | 1 | | 2 | | 5 | | 8 | | Ending balance at original discount rate | 43,626 | | 25,023 | | 30,256 | | 5,444 | | | 3,302 | | 2,541 | | 12,120 | | 2,076 | | 506 | | 1,971 | | 769 | | Effect of changes in discount rate assumptions | 6,535 | | 234 | | (525) | | (266) | | | (193) | | (119) | | (830) | | (133) | | (28) | | (207) | | 29 | | Balance at December 31, 2023 | 50,161 | | 25,257 | | 29,731 | | 5,178 | | | 3,109 | | 2,422 | | 11,290 | | 1,943 | | 478 | | 1,764 | | 798 | | Net liability for future policy benefits | 32,652 | | 10,560 | | 23,243 | | 4,090 | | | 621 | | 770 | | 7,216 | | 836 | | 272 | | 911 | | 521 | | Less: reinsurance recoverable | 4,135 | | 1,521 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | | 0 | | 15 | | 0 | | Net liability for future policy benefits after reinsurance recoverable | $ | 28,517 | | $ | 9,039 | | $ | 23,243 | | $ | 4,090 | | | $ | 621 | | $ | 770 | | $ | 7,216 | | $ | 836 | | $ | 272 | | $ | 896 | | $ | 521 | |
(1) Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected future benefit payments. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 future net 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 collected (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 collected represent the portion of gross premiums collected from policyholders that is used to fund expected future benefit payments.
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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 policy benefits and expenses and discounted (discounted at the current period discount rate) expected future gross premiums and expected future policy benefits and expenses by reporting segment and disaggregated by product type as of December 31. These tables are presented gross of internal and external ceded reinsurance. 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. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | 2022 | (In millions) | Gross Premiums | | Benefits and Expenses | | Gross Premiums | | Benefits and Expenses | Undiscounted expected future gross premiums and expected future policy benefits and expenses: | | | | | | | | | | | | | | | | Aflac Japan (1) | | | | | | | | | | | | | | | | Cancer | | $ | 59,169 | | | | | $ | 66,427 | | | | | $ | 65,454 | | | | | $ | 73,009 | | | Medical and other health | | 38,583 | | | | | 39,884 | | | | | 43,954 | | | | | 44,005 | | | Life insurance | | 12,677 | | | | | 42,541 | | | | | 14,685 | | | | | 46,166 | | | Other | | 1,781 | | | | | 7,448 | | | | | 2,012 | | | | | 8,175 | | | Aflac U.S. | | | | | | | | | | | | | | | | Accident | | 9,095 | | | | | 4,548 | | | | | 9,481 | | | | | 4,636 | | | Disability | | 5,776 | | | | | 3,177 | | | | | 5,858 | | | | | 3,267 | | | Critical care | | 19,886 | | | | | 20,626 | | | | | 21,069 | | | | | 22,113 | | | Hospital indemnity | | 4,922 | | | | | 3,025 | | | | | 5,164 | | | | | 3,338 | | | Dental/vision | | 1,162 | | | | | 726 | | | | | 1,208 | | | | | 759 | | | Life insurance | | 2,719 | | | | | 3,260 | | | | | 2,375 | | | | | 2,787 | | | Other | | 724 | | | | | 1,396 | | | | | 333 | | | | | 1,147 | | | Total | | $ | 156,494 | | | | | $ | 193,058 | | | | | $ | 171,593 | | | | | $ | 209,402 | | |
(1) Prior-year amounts reflect the immaterial revision of amounts disclosed in the Company's Quarterly Reports on Form 10-Q for 2023 to correctly apply the yen/dollar exchange rate in effect for the period presented. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | 2022 | (In millions) | Gross Premiums | | Benefits and Expenses | | Gross Premiums | | Benefits and Expenses | Discounted expected future gross premiums and expected future policy benefits and expenses: | | | | | | | | | | | | | | | | Aflac Japan | | | | | | | | | | | | | | | | Cancer | | $ | 48,363 | | | | | $ | 50,161 | | | | | $ | 53,278 | | | | | $ | 54,766 | | | Medical and other health | | 30,757 | | | | | 25,257 | | | | | 34,693 | | | | | 27,419 | | | Life insurance | | 11,240 | | | | | 29,731 | | | | | 12,951 | | | | | 31,954 | | | Other | | 1,512 | | | | | 5,178 | | | | | 1,697 | | | | | 5,582 | | | Aflac U.S. | | | | | | | | | | | | | | | | Accident | | 6,369 | | | | | 3,109 | | | | | 6,510 | | | | | 3,098 | | | Disability | | 4,488 | | | | | 2,422 | | | | | 4,468 | | | | | 2,445 | | | Critical care | | 12,417 | | | | | 11,290 | | | | | 12,659 | | | | | 11,489 | | | Hospital indemnity | | 3,419 | | | | | 1,943 | | | | | 3,483 | | | | | 2,074 | | | Dental/vision | | 807 | | | | | 478 | | | | | 821 | | | | | 488 | | | Life insurance | | 1,914 | | | | | 1,764 | | | | | 1,663 | | | | | 1,526 | | | Other | | 467 | | | | | 798 | | | | | 228 | | | | | 622 | | | Total | | $ | 121,753 | | | | | $ | 132,131 | | | | | $ | 132,451 | | | | | $ | 141,463 | | |
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