BUSINESS SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION

The Company consists of two reportable insurance business segments: Aflac Japan and Aflac U.S., both of which sell supplemental health and life insurance. In addition, the Parent Company, other operating business units that are not individually reportable, reinsurance activities, including internal reinsurance activity with Aflac Re, and other business activities not included in Aflac Japan or Aflac U.S., as well as intercompany eliminations, are included in Corporate and other. The Company does not allocate corporate overhead expenses to business segments.

Consistent with U.S. GAAP accounting guidance for segment reporting, the Company evaluates and manages its business segments using a financial performance measure called pretax adjusted earnings.

•Pretax adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that are outside management’s control because they tend to be driven by general economic conditions and events or are related to infrequent activities not directly associated with insurance operations. The Company excludes income taxes related to operations to arrive at pretax adjusted earnings.

◦Adjusted revenues are U.S. GAAP total revenues excluding net investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest income/expense from derivatives associated with certain investment strategies, which are reclassified from net investment gains (losses) and included in adjusted earnings as a component of adjusted net investment income when analyzing operations. 

◦Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest from derivatives associated with notes payable but excluding any non-recurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company’s underlying business performance.

Aflac Japan's adjusted revenues accounted for 56% and 61% of the Company's total adjusted revenues in the three-month periods ended March 31, 2024 and 2023, respectively. The percentage of the Company's total assets attributable to Aflac Japan was 79% at March 31, 2024, compared with 80% at December 31, 2023.

Information regarding operations by reportable segment and Corporate and other, follows:

	Three Months Ended March 31,
(In millions)	2024		2023
Revenues:
Aflac Japan:
Net earned premiums	$	1,816	$	2,170
Adjusted net investment income	648		611
Other income	9		9
Total adjusted revenue Aflac Japan	2,473		2,790
Aflac U.S.:
Net earned premiums	1,475		1,428
Adjusted net investment income	206		197
Other income	18		35
Total adjusted revenue Aflac U.S.	1,699		1,660
Corporate and other (1)	247		129
Total adjusted revenues	4,419		4,579
Net investment gains (losses)	951		123
Reconciling items:
Amortized hedge costs	6		58
Amortized hedge income	(28)		(29)
Net interest (income) expense from derivatives    associated with certain investment strategies	88		69
Total revenues	$	5,436	$	4,800

(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $32 and $51 for the three-month periods ended March 31, 2024, and 2023, respectively, is included as a reduction to net investment income. Tax credits on these investments of $33 and $52 for the three-month periods ended March 31, 2024, and 2023, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings. See Note 3 for additional information on these investments.

	Three Months Ended March 31,
(In millions)	2024		2023
Pretax earnings:
Aflac Japan	$	810	$	788
Aflac U.S.	356		352
Corporate and other (1)	(3)		(7)
Pretax adjusted earnings	1,163		1,133
Other income (loss)	(2)		0
Net investment gains (losses)	951		123
Reconciling items:
Amortized hedge costs	6		58
Amortized hedge income	(28)		(29)
Net interest (income) expense from derivatives    associated with certain investment strategies	88		69
Impact of interest from derivatives associated    with notes payable	(8)		(12)
Total earnings before income taxes	$	2,170	$	1,342
Income taxes applicable to pretax adjusted earnings	$	202	$	180
Effect of foreign currency translation on after-tax   adjusted earnings	(44)		(41)

(1)The change in value of federal historic rehabilitation and solar investments in partnerships of $32 and $51 for the three-month periods ended March 31, 2024, and 2023, respectively, is included as a reduction to net investment income. Tax credits on these investments of $33 and $52 for the three-month periods ended March 31, 2024, and 2023, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings. See Note 3 for additional information on these investments.

Assets were as follows:

(In millions)	March 31, 2024			December 31, 2023
Assets:
Aflac Japan		$	98,189		$	101,541
Aflac U.S.		21,850			21,861
Corporate and other		4,703			3,322
Total assets		$	124,742		$	126,724