Aflac's Q4 2024: Unpacking Contradictions in U.S. and Japan Sales Performance, Plus Capital Allocation Strategies

These are the key contradictions discussed in Aflac's latest 2024Q4 earnings call, specifically including: Sales Performance in the U.S. and Japan, and Capital Allocation Strategies:



Sales Performance and Market Challenges:
- Aflac U.S. saw a 1% decline in sales for the year, with 2.7% increase in net earned premiums.
- The decline in sales was attributed to challenges in the dental DBA market and intense competition in the supplemental product market.

Japan Sales and Product Strategy:
- Japan sales grew by 5.4% with a 36% pretax profit margin, driven by a 9% increase in sales during the fourth quarter.
- The growth was supported by the success of the Sumitas product and efforts to acquire younger customers.

Capital Management and Shareholder Returns:
- Aflac Inc. repurchased $750 million of shares and paid $277 million in dividends in Q4, returning $3.9 billion to shareholders in 2024.
- The company's strong capital position and cash flow allowed for these returns,while maintaining its commitment to prudent liquidity and capital management.

Investment and Financial Strength:
- Adjusted net investment income increased by 12.1% for the year, with a 3.7% increase in adjusted net investment income in yen terms.
- This growth was driven by higher returns from alternatives, structured private credit, and infrastructure investments, despite a challenging interest rate environment.