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BUSINESS SEGMENT AND SELECTED FOREIGN CURRENCY TRANSLATION ITEMS | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT AND SELECTED FOREIGN CURRENCY TRANSLATION ITEMS 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. The Company’s reportable segments are regularly reviewed by the Company's CODM, Senior Executive Vice President and Chief Financial Officer, in deciding how to allocate resources and in assessing performance. The Company's CODM reviews and approves the annual budget and operating forecast, which allocates resources to segments and serves as a key benchmark for tracking performance and accountability of each segment's operating results. The Company’s CODM evaluates the performance of the segments using, in comparison to the annual budget, operating forecast and historical results, a financial performance measure called pretax adjusted earnings and believes this financial performance measure to be vitally important for understanding the underlying profitability drivers and trends of the Company’s insurance business. •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 cash flows 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 cash flows 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 55% of the Company's total adjusted revenues in 2024, compared with 60% in 2023 and 64% in 2022. The percentage of the Company's total assets attributable to Aflac Japan was 77% at December 31, 2024, compared with 80% at December 31, 2023. Information regarding operations by reportable segment and Corporate and other for the years ended December 31 is presented in the following tables.
(In millions) | 2024 |  | 2023 |  | 2022
Revenues: |  |  |  |  |  |  |  |  |  |  |
Aflac Japan: |  |  |  |  |  |  |  |  |  |  |
Net earned premiums (1) |  | $ | 6,930 |  |  |  |  | $ | 8,047 |  |  |  |  | $ | 9,186 |  |
Adjusted net investment income |  | 2,701 |  |  |  |  | 2,582 |  |  |  |  | 2,669 |  |
Other income |  | 28 |  |  |  |  | 35 |  |  |  |  | 35 |  |
Total adjusted revenue Aflac Japan |  | 9,659 |  |  |  |  | 10,664 |  |  |  |  | 11,890 |  |
Aflac U.S.: |  |  |  |  |  |  |  |  |  |  |
Net earned premiums |  | 5,829 |  |  |  |  | 5,675 |  |  |  |  | 5,570 |  |
Adjusted net investment income |  | 847 |  |  |  |  | 820 |  |  |  |  | 755 |  |
Other income |  | 63 |  |  |  |  | 128 |  |  |  |  | 161 |  |
Total adjusted revenue Aflac U.S. |  | 6,739 |  |  |  |  | 6,623 |  |  |  |  | 6,486 |  |
Corporate and other (2) |  | 1,007 |  |  |  |  | 460 |  |  |  |  | 267 |  |
Total adjusted revenues |  | 17,405 |  |  |  |  | 17,747 |  |  |  |  | 18,643 |  |
Net investment gains (losses) |  | 1,271 |  |  |  |  | 590 |  |  |  |  | 363 |  |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |
Amortized hedge costs |  | 26 |  |  |  |  | 157 |  |  |  |  | 112 |  |
Amortized hedge income |  | (113) |  |  |  |  | (121) |  |  |  |  | (68) |  |
Net interest (income) expense from derivatives associated with certain investment strategies |  | 338 |  |  |  |  | 328 |  |  |  |  | 90 |  |
Total revenues |  | $ | 18,927 |  |  |  |  | $ | 18,701 |  |  |  |  | $ | 19,140 |  |
(1) Includes a gain (loss) of $(81), $20 and $(42) in 2024, 2023 and 2022, 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 $165, $343 and $91 in 2024, 2023 and 2022, respectively, is included as a reduction to net investment income. Tax credits on these investments of $164, $334 and $83 in 2024, 2023 and 2022, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings. See Note 3 for additional information on these investments.
(In millions) | 2024 |  | 2023 |  | 2022
Adjusted revenues: |  |  |  |  |  |  |  |  |  |  |
Aflac Japan (1) |  | $ | 9,659 |  |  |  |  | $ | 10,664 |  |  |  |  | $ | 11,890 |  |
Aflac U.S. |  | 6,739 |  |  |  |  | 6,623 |  |  |  |  | 6,486 |  |
Corporate and other (2) |  | 1,007 |  |  |  |  | 460 |  |  |  |  | 267 |  |
Total adjusted revenues |  | 17,405 |  |  |  |  | 17,747 |  |  |  |  | 18,643 |  |
Benefits and adjusted expenses: |  |  |  |  |  |  |  |  |  |  |
Aflac Japan: |  |  |  |  |  |  |  |  |  |  |
Benefits and claims, excluding reserve remeasurement |  | 4,761 |  |  |  |  | 5,409 |  |  |  |  | 6,282 |  |
Reserve remeasurement (gains) losses |  | (444) |  |  |  |  | (96) |  |  |  |  | (91) |  |
Total benefits and claims, net |  | 4,317 |  |  |  |  | 5,313 |  |  |  |  | 6,191 |  |
Adjusted expenses: |  |  |  |  |  |  |  |  |  |  |
Amortization of deferred policy acquisition costs |  | 321 |  |  |  |  | 326 |  |  |  |  | 338 |  |
Insurance commissions |  | 435 |  |  |  |  | 491 |  |  |  |  | 563 |  |
Insurance and other expenses |  | 1,092 |  |  |  |  | 1,300 |  |  |  |  | 1,517 |  |
Total benefits and adjusted expenses Aflac Japan |  | 6,165 |  |  |  |  | 7,430 |  |  |  |  | 8,609 |  |
Aflac U.S.: |  |  |  |  |  |  |  |  |  |  |
Benefits and claims, excluding reserve remeasurement |  | 2,821 |  |  |  |  | 2,715 |  |  |  |  | 2,679 |  |
Reserve remeasurement (gains) losses |  | (95) |  |  |  |  | (284) |  |  |  |  | (124) |  |
Total benefits and claims, net |  | 2,726 |  |  |  |  | 2,431 |  |  |  |  | 2,555 |  |
Adjusted expenses: |  |  |  |  |  |  |  |  |  |  |
Amortization of deferred policy acquisition costs |  | 530 |  |  |  |  | 490 |  |  |  |  | 455 |  |
Insurance commissions |  | 563 |  |  |  |  | 561 |  |  |  |  | 553 |  |
Insurance and other expenses |  | 1,501 |  |  |  |  | 1,640 |  |  |  |  | 1,564 |  |
Total benefits and adjusted expenses Aflac U.S. |  | 5,320 |  |  |  |  | 5,122 |  |  |  |  | 5,127 |  |
Corporate and other |  | 975 |  |  |  |  | 885 |  |  |  |  | 485 |  |
Total adjusted expenses |  | $ | 12,460 |  |  |  |  | $ | 13,437 |  |  |  |  | $ | 14,221 |  |
Pretax earnings: |  |  |  |  |  |  |  |  |  |  |
Aflac Japan (1) |  | $ | 3,494 |  |  |  |  | $ | 3,234 |  |  |  |  | $ | 3,281 |  |
Aflac U.S. |  | 1,419 |  |  |  |  | 1,501 |  |  |  |  | 1,359 |  |
Corporate and other (2) |  | 32 |  |  |  |  | (425) |  |  |  |  | (218) |  |
Pretax adjusted earnings |  | 4,945 |  |  |  |  | 4,310 |  |  |  |  | 4,422 |  |
Other income (loss) |  | (23) |  |  |  |  | 39 |  |  |  |  | 0 |  |
Net investment gains (losses) |  | 1,271 |  |  |  |  | 590 |  |  |  |  | 363 |  |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |
Amortized hedge costs |  | 26 |  |  |  |  | 157 |  |  |  |  | 112 |  |
Amortized hedge income |  | (113) |  |  |  |  | (121) |  |  |  |  | (68) |  |
Net interest (income) expense from derivatives associated with certain investment strategies |  | 338 |  |  |  |  | 328 |  |  |  |  | 90 |  |
Impact of interest from derivatives associated with notes payable |  | (27) |  |  |  |  | (41) |  |  |  |  | (50) |  |
Total earnings before income taxes |  | $ | 6,417 |  |  |  |  | $ | 5,262 |  |  |  |  | $ | 4,869 |  |
Income taxes applicable to pretax adjusted earnings |  | $ | 873 |  |  |  |  | $ | 577 |  |  |  |  | $ | 808 |  |
Effect of foreign currency translation on after-tax adjusted earnings |  | (103) |  |  |  |  | (113) |  |  |  |  | (262) |  |
(1) Includes a gain (loss) of $(81), $20 and $(42) for 2024, 2023 and 2022, 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 $165, $343 and $91 in 2024, 2023 and 2022, respectively, is included as a reduction to net investment income. Tax credits on these investments of $164, $334 and $83 in 2024, 2023 and 2022, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings. See Note 3 for additional information on these investments. Internal Reinsurance: Aflac Re is a Bermuda domiciled insurer that reinsures certain policies issued by Aflac Japan and is reported as a part of Corporate and other. Under these internal reinsurance transactions, Aflac Japan's net earned premiums are reduced by the amount of premiums ceded to Aflac Re. Aflac Re recorded net earned premiums of $568 million in 2024, $258 million in 2023 and $1 million in 2022 related to these reinsurance transactions with Aflac Japan. These internal reinsurance transactions have no financial statement impact on a consolidated basis, except for the effect of foreign currency accounting. For additional information on these internal reinsurance transactions, see Note 8. Transfers of funds from Aflac Japan:Aflac Japan makes payments to the Parent Company for management fees and remittances of earnings. Information on transfers for each of the years ended December 31 is shown below. See Note 13 for information concerning restrictions on transfers from Aflac Japan.
(In millions) | 2024 |  | 2023 |  | 2022
Management fees |  | $ | 69 |  |  |  |  | $ | 67 |  |  |  |  | $ | 61 |  |
Profit remittances |  | 2,865 |  |  |  |  | 2,623 |  |  |  |  | 2,412 |  |
Total transfers from Aflac Japan |  | $ | 2,934 |  |  |  |  | $ | 2,690 |  |  |  |  | $ | 2,473 |  |
Total Assets: The Company's total assets as of December 31 were as follows:
(In millions) | 2024 |  | 2023 |
Assets: |  |  |  |  |  |  |  |
Aflac Japan |  | $ | 90,210 |  |  |  |  | $ | 101,541 |  |  |
Aflac U.S. |  | 21,930 |  |  |  |  | 21,861 |  |  |
Corporate and other |  | 5,426 |  |  |  |  | 3,322 |  |  |
Total assets |  | $ | 117,566 |  |  |  |  | $ | 126,724 |  |  |
Receivables:Receivables consist primarily of monthly insurance premiums due from individual policyholders or their employers for payroll deduction of premiums, net of allowance for credit losses. Total receivables were $779 million and $848 million as of December 31, 2024 and 2023, respectively. The allowance for credit losses related to premiums receivable was $108 million and $92 million as of December 31, 2024 and 2023, respectively. At December 31, 2024, $197 million, or 25.3% of total receivables, were related to Aflac Japan's operations, compared with $175 million, or 20.7%, at December 31, 2023. Selected Foreign Currency Translation Items Yen-Translation Effects:The following table shows the yen/dollar exchange rates used for or during the periods ended December 31. For comparison, exchange effects for the current year were calculated using the yen/dollar exchange rate that was used in the prior year.
| 2024 |  | 2023 |  | 2022
Statements of Earnings: |  |  |  |  |  |  |  |  |  |  |
Weighted-average yen/dollar exchange rate (1) |  | 150.97 |  |  |  |  | 140.57 |  |  |  |  | 130.17 |  |
Yen percent strengthening (weakening) |  | (6.9) | % |  |  |  | (7.4) | % |  |  |  | (15.7) | % |
Exchange effect on pretax adjusted earnings (in millions) |  | $ | (125) |  |  |  |  | $ | (131) |  |  |  |  | $ | (318) |  |
| 2024 |  | 2023
Balance Sheets: |  |  |  |  |  |  |
Yen/dollar exchange rate at December 31(1) |  | 158.18 |  |  |  |  | 141.83 |  |
Yen percent strengthening (weakening) |  | (10.3) | % |  |  |  | (6.4) | % |
Exchange effect on total assets (in millions) |  | $ | (6,127) |  |  |  |  | $ | (3,984) |  |
Exchange effect on total liabilities (in millions) |  | (9,624) |  |  |  |  | (6,936) |  |
(1) Rates are based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).

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