Aflac's Q2 2025 Earnings Call: Key Contradictions on ESR Strategy, Cancer Sales, and Japan Market Recovery

ESR and FX hedge strategy, cancer sales and product launch impact, Japan sales recovery expectations, Miraito product rollout and impact, Japan sales strategy and focus are the key contradictions discussed in Aflac's latest 2025Q2 earnings call.



Sales Growth in Japan:
- Aflac Japan reported a 23.2% year-over-year increase in sales, with a 53% increase in cancer insurance sales for the quarter.
- The growth was driven by the successful launch of the new cancer insurance product, Miraito, and improved sales in all distribution channels.

U.S. Segment Performance:
- Aflac U.S. generated $340 million in new sales, an increase of 2.7% year-on-year, with strong persistency at 79.2%.
- The growth was attributed to strong momentum in group business, particularly in group life and disability, and a focus on profitable growth and underwriting discipline.

Investment Income Trends:
- For Japan, adjusted net investment income in yen terms was down 10.5%, primarily due to lower floating rate income and impact from foreign currency.
- In the U.S., adjusted net investment income was down 5%, influenced by lower floating rate income.

Capital Management and Shareholder Returns:
- Aflac deployed $1.1 billion back to shareholders in the second quarter of 2025, with $829 million in share repurchases and $312 million in dividends.
- This strategic capital deployment is part of Aflac's commitment to maintaining strong capital ratios and prudent liquidity management.