Aflac Incorporated Reports Significant Financial Results for Fourth Quarter with Dividend Increase

Aflac Incorporated's Fourth Quarter Financial Results

Aflac Incorporated (NYSE: AFL) has released its fourth quarter earnings report, revealing robust financial performance and significant strategic advancements for the company. For the quarter ending December 31, 2025, Aflac reported total revenues of $4.9 billion, reflecting a decrease from $5.4 billion in the same quarter of 2024. Despite this revenue drop, net earnings stood at $1.4 billion, or $2.64 per diluted share, although this marks a decline compared to $1.9 billion, or $3.42 per diluted share reported in the fourth quarter of the previous year.

Investment Gains and Earnings Per Share

This quarter's net earnings included net investment gains amounting to $537 million, equating to $1.03 per diluted share, lower than the previous year’s $1.0 billion in net investment gains. This decline in investment gains stems from the company's exposure to certain derivatives and foreign currency activities. The adjusted earnings also reflected a slide to $818 million in the fourth quarter, down from $865 million in 2024, but earnings per diluted share adjusted for these factors saw a slight increase of 0.6%, landing at $1.57.

In terms of foreign currency impact, the average yen/dollar exchange rate was noted at 154.20 for this quarter, which represents a weak yen compared to the previous year when it averaged 152.35.

Shareholders' Equity and Comprehensive Analysis

Aflac's shareholders' equity exhibited positive momentum, amounting to $29.5 billion by year-end 2025, translating to $56.85 per share. This compares favorably to $26.1 billion or $47.45 per share reported at the end of 2024. This growth of shareholders' equity incorporates a cumulative increase attributed to revisions in insurance reserve discount rate assumptions.

The company’s annualized return on average shareholders’ equity stood at a commendable 19.0% for the fourth quarter. Review of the full year revealed total revenues for 2025 at $17.2 billion – a 9.3% drop from $18.9 billion in 2024.

Net earnings for the year were recorded at $3.6 billion, or $6.82 per diluted share, reflecting a wider decrease from $5.4 billion or $9.63 per diluted share from the prior year.

Aflac Japan and Aflac U.S. Performance

Focusing on Aflac Japan, the net earned premiums in the yen context fell 1.9% to ¥252.6 billion for the quarter, largely affected by the settlement of certain limited pay products. Adjusted net investment income also decreased 3.9%. However, annual sales showed promise with a 15.7% rise in quarterly sales influenced by the popularity of the new cancer insurance offering, Miraito.

Conversely, Aflac U.S. demonstrated growth with a 4.0% increase in net earned premiums reaching $1.5 billion for the fourth quarter. A surge in sales was attributed primarily to group voluntary products, showcasing improved agent productivity.

Dividend Declaration and Share Repurchase Strategy

In a testament to their sustained financial health, Aflac’s board has declared a first quarter 2026 dividend of $0.61 per share, signifying a 5.2% increment from the previous quarter. Furthermore, during the fourth quarter, Aflac executed a $800 million capital deployment for the repurchase of 7.2 million shares, underscoring the company’s commitment to returning value to its shareholders.

Leadership Insights and Future Outlook

Daniel P. Amos, Aflac's Chairman and CEO, expressed contentment with the quarterly results while emphasizing the importance of long-term strategic execution for enhancing shareholder value. The company anticipates sustained growth through innovative product offerings and reinforced sales strategies, especially focusing on the third sector and newer demographics in Japan as well as continued profitability and efficiency in the U.S.

Aflac's longstanding reputation bolstered by over four decades of dividend increases is a key pillar for its investors. As the company navigates through the complexities of the insurance landscape, it remains steadfast in its commitment to providing robust financial protection solutions while optimizing its operational effectiveness and shareholders' returns.

For more detailed financial data and projections, investors can refer to Aflac Incorporated’s website for comprehensive reports and analyses. This proactive engagement with the financial community ensures transparency and adaptability in an evolving market.