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BUSINESS SEGMENT INFORMATION | 3 Months Ended
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Jun. 30, 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 as a percentage of the Company's total adjusted revenues were 56% in the three- and six-month periods ended June 30, 2024 and 60% in the three- and six-month periods ended June 30, 2023. The percentage of the Company's total assets attributable to Aflac Japan was 77% at June 30, 2024, compared with 80% at December 31, 2023. Information regarding operations by reportable segment and Corporate and other follows:
| Three Months Ended June 30, |  | Six Months Ended June 30, |
(In millions) | 2024 |  | 2023 |  | 2024 |  | 2023 |
Revenues: |  |  |  |  |  |  |  |
Aflac Japan: |  |  |  |  |  |  |  |
Net earned premiums (1) | $ | 1,715 |  |  | $ | 2,064 |  |  | $ | 3,531 |  |  | $ | 4,234 |  |
Adjusted net investment income | 725 |  |  | 637 |  |  | 1,374 |  |  | 1,248 |  |
Other income | 7 |  |  | 9 |  |  | 14 |  |  | 18 |  |
Total adjusted revenue Aflac Japan | 2,447 |  |  | 2,710 |  |  | 4,919 |  |  | 5,500 |  |
Aflac U.S.: |  |  |  |  |  |  |  |
Net earned premiums | 1,455 |  |  | 1,425 |  |  | 2,930 |  |  | 2,853 |  |
Adjusted net investment income | 218 |  |  | 203 |  |  | 424 |  |  | 400 |  |
Other income | 11 |  |  | 35 |  |  | 30 |  |  | 70 |  |
Total adjusted revenue Aflac U.S. | 1,684 |  |  | 1,663 |  |  | 3,384 |  |  | 3,323 |  |
Corporate and other (2) | 249 |  |  | 140 |  |  | 497 |  |  | 268 |  |
Total adjusted revenues | 4,380 |  |  | 4,513 |  |  | 8,800 |  |  | 9,091 |  |
Net investment gains (losses) | 696 |  |  | 555 |  |  | 1,647 |  |  | 678 |  |
Reconciling items: |  |  |  |  |  |  |  |
Amortized hedge costs | 7 |  |  | 63 |  |  | 13 |  |  | 122 |  |
Amortized hedge income | (34) |  |  | (38) |  |  | (62) |  |  | (67) |  |
Net interest (income) expense from derivatives associated with certain investment strategies | 89 |  |  | 79 |  |  | 177 |  |  | 148 |  |
Total revenues | $ | 5,138 |  |  | $ | 5,172 |  |  | $ | 10,575 |  |  | $ | 9,972 |  |
(1) Includes a gain (loss) of $(2) and $(1) for the three-month periods and $(5) and $(1) for the six-month periods ended June 30, 2024 and 2023, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts. (2) The change in value of federal historic rehabilitation and solar investments in partnerships of $30 and $53 for the three-month periods and $62 and $105 for the six-month periods ended June 30, 2024, and 2023, respectively, is included as a reduction to net investment income. Tax credits on these investments of $31 and $56 for the three-month periods and $64 and $108 for the six-month periods ended June 30, 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 June 30, |  | Six Months Ended June 30, |
(In millions) | 2024 |  | 2023 |  | 2024 |  | 2023 |
Pretax earnings: |  |  |  |  |  |  |  |
Aflac Japan (1) | $ | 864 |  |  | $ | 822 |  |  | $ | 1,674 |  |  | $ | 1,610 |  |
Aflac U.S. | 383 |  |  | 369 |  |  | 739 |  |  | 721 |  |
Corporate and other (2) | 23 |  |  | (52) |  |  | 21 |  |  | (58) |  |
Pretax adjusted earnings | 1,270 |  |  | 1,139 |  |  | 2,434 |  |  | 2,273 |  |
Other income (loss) | 0 |  |  | 35 |  |  | (2) |  |  | 35 |  |
Net investment gains (losses) | 696 |  |  | 555 |  |  | 1,647 |  |  | 678 |  |
Reconciling items: |  |  |  |  |  |  |  |
Amortized hedge costs | 7 |  |  | 63 |  |  | 13 |  |  | 122 |  |
Amortized hedge income | (34) |  |  | (38) |  |  | (62) |  |  | (67) |  |
Net interest (income) expense from derivatives associated with certain investment strategies | 89 |  |  | 79 |  |  | 177 |  |  | 148 |  |
Impact of interest from derivatives associated with notes payable | (9) |  |  | (8) |  |  | (17) |  |  | (22) |  |
Total earnings before income taxes | $ | 2,019 |  |  | $ | 1,825 |  |  | $ | 4,190 |  |  | $ | 3,167 |  |
Income taxes applicable to pretax adjusted earnings | $ | 235 |  |  | $ | 186 |  |  | $ | 438 |  |  | $ | 366 |  |
Effect of foreign currency translation on after-tax adjusted earnings | (37) |  |  | (25) |  |  | (81) |  |  | (66) |  |
(1) Includes a gain (loss) of $(2) and $(1) for the three-month periods and $(5) and $(1) for the six-month periods ended June 30, 2024 and 2023, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts. (2)The change in value of federal historic rehabilitation and solar investments in partnerships of $30 and $53 for the three-month periods and $62 and $105 for the six-month periods ended June 30, 2024, and 2023, respectively, is included as a reduction to net investment income. Tax credits on these investments of $31 and $56 for the three-month periods and $64 and $108 for the six-month periods ended June 30, 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. The Company's total assets were as follows:
(In millions) | June 30, 2024 |  | December 31, 2023
Assets: |  |  |  |  |  |  |
Aflac Japan |  | $ | 92,708 |  |  |  |  | $ | 101,541 |  |
Aflac U.S. |  | 21,755 |  |  |  |  | 21,861 |  |
Corporate and other |  | 5,705 |  |  |  |  | 3,322 |  |
Total assets |  | $ | 120,168 |  |  |  |  | $ | 126,724 |  |

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