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Item 1. Financial Statements

2025-08-05 compared with 2025-05-07 · 506 added, 168 removed, 2277 unchanged (23% of the section changed)

2 unchanged sentences

Consolidated Statements of Earnings

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions, except for share and per-share amounts - Unaudited) 2025 2024 2025 2024

27 unchanged sentences

Cash dividends per share $ .58 $ .50 $ 1.16 $ 1.00

(1) Includes a gain (loss) of an immaterial amount and $( 3 ) for the three-month periods ended March 31, 2025 and 2024, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

(1) Includes a gain (loss) of an immaterial amount and $( 2 ) for the three-month periods and an immaterial amount and $( 5 ) for the six-month periods ended June 30, 2025 and 2024, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

See the accompanying Notes to the Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions - Unaudited) 2025 2024 2025 2024

19 unchanged sentences

Consolidated Balance Sheets

(In millions, except for share and per-share amounts) March 31,

(In millions, except for share and per-share amounts) June 30,

Investments and cash:

77 unchanged sentences

Balance at March 31, 2025 $ 136 $ 2,919 $ 52,308 $ ( 1,859 ) $ ( 27,166 ) $ 26,338

Net earnings 0 0 599 0 0 599

Unrealized foreign currency translation

gains (losses) during period, net of

income taxes 0 0 0 267 0 267

Unrealized gains (losses) on fixed maturity

securities during period, net of income

taxes and reclassification adjustments 0 0 0 ( 595 ) 0 ( 595 )

Unrealized gains (losses) on derivatives

during period, net of income taxes 0 0 0 1 0 1

Effect of changes in discount rate assumptions

during period, net of income taxes 0 0 0 1,695 0 1,695

Pension liability adjustment during period,

net of income taxes 0 0 0 0 0 0

Dividends to shareholders (1)

($ .58 per share)

0 0 ( 312 ) 0 0 ( 312 )

Exercise of stock options 0 0 0 0 0 0

Share-based compensation 0 30 0 0 0 30

Purchases of treasury stock 0 0 0 0 ( 839 ) ( 839 )

Treasury stock reissued 0 9 0 0 7 16

Balance at June 30, 2025 $ 136 $ 2,958 $ 52,595 $ ( 491 ) $ ( 27,998 ) $ 27,200

(1) Dividends to shareholders are recorded in the period in which they are declared.

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Consolidated Statements of Shareholders’ Equity (continued)

(In millions, except for per share amounts - Unaudited) Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Shareholders'

21 unchanged sentences

Balance at March 31, 2024 $ 136 $ 2,806 $ 49,872 $ ( 5,102 ) $ ( 24,175 ) $ 23,537

Net earnings 0 0 1,755 0 0 1,755

Unrealized foreign currency translation

gains (losses) during period, net of

income taxes 0 0 0 ( 425 ) 0 ( 425 )

Unrealized gains (losses) on fixed maturity

securities during period, net of income

taxes and reclassification adjustments 0 0 0 ( 691 ) 0 ( 691 )

Unrealized gains (losses) on derivatives

during period, net of income taxes 0 0 0 4 0 4

Effect of changes in discount rate assumptions

during period, net of income taxes 0 0 0 2,920 0 2,920

Pension liability adjustment during period,

net of income taxes 0 0 0 2 0 2

Dividends to shareholders (1)

($ .50 per share)

0 0 ( 282 ) 0 0 ( 282 )

Exercise of stock options 0 2 0 0 0 2

Share-based compensation 0 12 0 0 0 12

Purchases of treasury stock 0 0 0 0 ( 810 ) ( 810 )

Treasury stock reissued 0 15 0 0 8 23

Balance at June 30, 2024 $ 136 $ 2,835 $ 51,345 $ ( 3,292 ) $ ( 24,977 ) $ 26,047

(1) Dividends to shareholders are recorded in the period in which they are declared.

2 unchanged sentences

Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(In millions - Unaudited) 2025 2024

14 unchanged sentences

Equity securities 240 550

Held-to-maturity fixed maturity securities 2 1

Commercial mortgage and other loans 1,075 952

11 unchanged sentences

Proceeds from borrowings 1,039 823

Principal payments under debt obligations 0 ( 194 )

Dividends paid to shareholders ( 607 ) ( 550 )

54 unchanged sentences

All material intercompany accounts and transactions have been eliminated.

In the opinion of management, the accompanying unaudited consolidated financial statements of the Company contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the consolidated balance sheets as of June 30, 2025 and December 31, 2024, the consolidated statements of earnings and comprehensive income (loss) for the three- and six-month periods ended June 30, 2025 and 2024, the consolidated statements of shareholders' equity for the three-month periods ended March 31, 2025 and 2024 and June 30, 2025 and 2024, and the consolidated statements of cash flows for the six-month periods ended June 30, 2025 and 2024.

Results of operations for interim periods are not necessarily indicative of results for the entire year.

13 unchanged sentences

In November 2024, the FASB issued amendments that require disaggregated disclosure, in the notes to the financial statements, of specified information about certain costs and expenses including (1) the amounts of employee compensation, depreciation, and intangible asset amortization;

(2) certain expense, gain, or loss amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements;

(2) certain expense, gain, or loss amounts that are already required to be disclosed under current U.S.

GAAP in the same disclosure as the other disaggregation requirements;

(3) qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) the total amount of selling expenses and, in annual reporting periods, the Company’s definition of selling expenses.

27 unchanged sentences

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 53 % and 56 % in the three-month periods ended March 31, 2025 and 2024, respectively.

The percentage of the Company's total assets attributable to Aflac Japan was 78 % at March 31, 2025, compared with 77 % at December 31, 2024.

Aflac Japan's adjusted revenues as a percentage of the Company's total adjusted revenues were 54 % in both the three- and six-month periods ended June 30, 2025 and 56 % in both the three- and six-month periods ended June 30, 2024.

The percentage of the Company's total assets attributable to Aflac Japan was 77 % at both June 30, 2025 and December 31, 2024.

Information regarding operations by reportable segment and Corporate and other is presented in the following tables.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2025 2024 2025 2024

8 unchanged sentences

Total adjusted revenue Aflac U.S.

1,728 1,684 3,449 3,384

Corporate and other (2)

336 249 662 497

Total adjusted revenues 4,536 4,380 8,855 8,800

3 unchanged sentences

Amortized hedge income ( 30 ) ( 34 ) ( 60 ) ( 62 )

Net interest (income) expense from derivatives

associated with certain investment strategies 65 88

Net interest (income) expense from derivatives associated

with certain investment strategies 64 89 129 177

Total revenues $ 4,160 $ 5,138 $ 7,558 $ 10,575

(2) The change in value of federal historic rehabilitation and solar investments in partnerships of $ 8 and $ 32 for the three-month periods ended March 31, 2025 and 2024, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 7 and $ 33 for the three-month periods ended March 31, 2025 and 2024, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings.

(2) The change in value of federal historic rehabilitation and solar investments in partnerships of $ 8 and $ 30 for the three-month periods and $ 16 and $ 62 for the six-month periods ended June 30, 2025, and 2024, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 9 and $ 31 for the three-month periods and $ 16 and $ 64 for the six-month periods ended June 30, 2025, and 2024, 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 March 31,

Three Months Ended June 30, Six Months Ended

(In millions) 2025 2024 2025 2024

2 unchanged sentences

$ 2,472 $ 2,447 $ 4,744 $ 4,919

1,728 1,684 3,449 3,384

Corporate and other (2)

336 249 662 497

Total adjusted revenues 4,536 4,380 8,855 8,800

16 unchanged sentences

Total benefits and adjusted expenses Aflac U.S.

1,340 1,301 2,703 2,645

Corporate and other 316 226 599 476

2 unchanged sentences

Aflac Japan (1)

$ 790 $ 864 $ 1,512 $ 1,674

388 383 746 739

Corporate and other (2)

5 unchanged sentences

Amortized hedge income ( 30 ) ( 34 ) ( 60 ) ( 62 )

Net interest (income) expense from derivatives

associated with certain investment strategies 65 88

Net interest (income) expense from derivatives associated

with certain investment strategies 64 89 129 177

Impact of interest from derivatives associated with notes payable 0 ( 9 ) ( 4 ) ( 17 )

1 unchanged sentence

Income taxes applicable to pretax adjusted earnings $ 241 $ 235 $ 458 $ 438

Effect of foreign currency translation on after-tax

adjusted earnings ( 8 ) ( 44 )

(2) The change in value of federal historic rehabilitation and solar investments in partnerships of $ 8 and $ 32 for the three-month periods ended March 31, 2025, and 2024, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $ 7 and $ 33 for the three-month periods ended March 31, 2025, and 2024, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings.

Effect of foreign currency translation on after-tax adjusted earnings 23 ( 37 ) 15 ( 81 )

See Note 3 for additional information on these investments.

2 unchanged sentences

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 $ 178 million and $ 136 million for the three-month periods ended March 31, 2025 and 2024, respectively, related to these reinsurance transactions with Aflac Japan.

Aflac Re recorded net earned premiums of $ 178 million and $ 128 million for the three-month periods and $ 356 million and $ 264 million for the six-month periods ended June 30, 2025 and 2024, respectively, 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.

2 unchanged sentences

The Company's total assets were as follows:

(In millions) March 31,

(In millions) June 30,

2025 December 31,

5 unchanged sentences

The amortized cost and allowance for credit losses for the Company's investments in fixed maturity securities and the fair values of these investments as well as the fair value of the Company's investments in equity securities are shown in the following tables.

March 31, 2025

June 30, 2025

(In millions) Amortized

22 unchanged sentences

Other currencies:

Mortgage- and asset-backed securities 47 0 1 0 48

Public utilities 57 0 1 0 58

1 unchanged sentence

Total other currencies

130 0 3 0 133

Total securities available-for-sale $ 70,030 $ 0 $ 4,072 $ 5,223 $ 68,879

27 unchanged sentences

Total securities available-for-sale $ 64,089 $ 0 $ 5,308 $ 4,128 $ 65,269

March 31, 2025

June 30, 2025

(In millions) Amortized

33 unchanged sentences

The methods of determining the fair values of the Company's investments in fixed maturity securities and equity securities are described in Note 5.

During the first three months of 2025 and 2024, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category.

During the first six months of 2025 and 2024, respectively, the Company did not reclassify any investments from the held-to-maturity category to the available-for-sale category.

Contractual and Economic Maturities

The contractual and economic maturities of the Company's investments in fixed maturity securities at March 31, 2025, were as follows:

The contractual and economic maturities of the Company's investments in fixed maturity securities at June 30, 2025, were as follows:

(In millions) Amortized

23 unchanged sentences

Investment exposures that individually exceeded 10% of shareholders' equity were as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Credit

6 unchanged sentences

Information regarding pretax net gains and losses from investments is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2025 2024 2025 2024

9 unchanged sentences

Equity securities 98

Real estate owned impairments ( 6 ) 0 ( 6 ) 0

Credit losses:

1 unchanged sentence

Commercial mortgage and other loans ( 61 ) ( 21 ) ( 114 ) ( 28 )

Impairment losses 0 0

Loan commitments 2 2 0 3

6 unchanged sentences

Total net investment gains (losses) $ ( 421 ) $ 696 $ ( 1,384 ) $ 1,647

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended March 31, 2025 that relate to equity securities held at the March 31, 2025 reporting date were $ 55 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended March 31, 2024 that relate to equity securities held at the March 31, 2024 reporting date were $ 71 million.

During the second quarter of 2025, the Company recognized an impairment loss of $ 6 million on an office-type real estate owned (REO) property classified as held-and-used for the production of income.

The impairment was based on the Company's evaluation of a material adverse change in occupancy and resulted in an estimated fair value of the REO property of $ 12 million.

The fair value was based on expected future cash flows utilizing inputs classified as Level 3 under the fair value guidance in ASC 820.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended June 30, 2025 that relate to equity securities held at the June 30, 2025 reporting date were $ 101 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the three-month period ended June 30, 2024 that relate to equity securities held at the June 30, 2024 reporting date were $ 15 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2025 that relate to equity securities held at the June 30, 2025 reporting date were $ 47 million.

The unrealized holding gains, net of losses, recorded as a component of net investment gains and losses for the six-month period ended June 30, 2024 that relate to equity securities held at the June 30, 2024 reporting date were $ 70 million.

Unrealized Investment Gains and Losses

1 unchanged sentence

The net effect on shareholders’ equity of unrealized gains and losses from fixed maturity securities was as follows:

(In millions) March 31,

(In millions) June 30,

2025 December 31,

3 unchanged sentences

Gross Unrealized Loss Aging

The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended March 31, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

March 31, 2025

The following tables show the fair values and gross unrealized losses of the Company's available-for-sale investments for the periods ended June 30, 2025 and December 31, 2024, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

June 30, 2025

Total Less than 12 months 12 months or longer

18 unchanged sentences

Yen-denominated 1,048 183 211 10 837 173

Other currencies 53 1 53 1 0 0

Sovereign and supranational:

dollar-denominated 0 0 0 0 0 0

Yen-denominated 48 11 0 0 48 11

50 unchanged sentences

However, if the Company identifies certain available-for-sale securities where the amortized cost basis exceeds the present value of the cash flows expected to be collected due to credit-related factors, an allowance for credit losses is recognized.

Based on an evaluation of its securities currently in an unrealized loss position, the Company has determined that those securities should not have an allowance for credit losses as of March 31, 2025 .

Refer to the Allowance for Credit Losses section below for additional information.

As of March 31, 2025 and December 31, 2024, the Company had an immaterial amount of fixed maturity securities on nonaccrual status.

As of June 30, 2025 and December 31, 2024, the Company had an immaterial amount of fixed maturity securities on nonaccrual status.

Commercial Mortgage and Other Loans

2 unchanged sentences

The following table reflects the composition of the carrying value for commercial mortgage and other loans by property type as of the periods presented.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Amortized

27 unchanged sentences

These loans provide funding for properties undergoing a change in their physical characteristics and/or economic profile and do not typically require any principal repayment prior to the maturity date.

As of March 31, 2025, the Company had $ 245 million in outstanding commitments to fund TREs.

As of June 30, 2025, the Company had $ 175 million in outstanding commitments to fund TREs.

These commitments are contingent on the final underwriting and due diligence to be performed.

5 unchanged sentences

These loans are generally considered to be below investment grade.

As of March 31, 2025, the Company had commitments of approximately $ 664 million to fund future MMLs.

As of June 30, 2025, the Company had commitments of approximately $ 646 million to fund future MMLs.

These commitments are contingent upon the availability of MMLs that meet the Company's underwriting criteria.

2 unchanged sentences

The infrastructure loan portfolio weighted average rating is investment grade.

As of March 31, 2025, the Company had commitments of approximately $ 1 million to fund future other loans.

As of June 30, 2025, the Company had commitments of approximately $ 1 million to fund future other loans.

These commitments are contingent upon the availability of other loans that meet the Company's underwriting criteria.

11 unchanged sentences

The Company monitors these credit ratings periodically, but not less frequently than quarterly.

The following tables present as of March 31, 2025 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator.

The following tables present as of June 30, 2025 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator.

Transitional Real Estate Loans

42 unchanged sentences

The following tables present an aging of past due and nonaccrual loans at amortized cost, before allowance for credit losses, as of the periods presented.

March 31, 2025

June 30, 2025

(In millions) Current Less Than

6 unchanged sentences

Total $ 10,016 $ 165 $ 467 $ 632 $ 10,648 $ 467

(1) As of March 31, 2025, there were no loans that were 90 days or more past due that continued to accrue interest.

(1) As of June 30, 2025, there were no loans that were 90 days or more past due that continued to accrue interest.

December 31, 2024

8 unchanged sentences

(1) As of December 31, 2024, there were no loans that were 90 days or more past due that continued to accrue interest.

For the three-month period ended March 31, 2025, the Company recognized $ 1 million of interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the three-month period ended March 31, 2024, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

Of these loans, TREs with an amortized cost of $ 146 million and $ 140 million had no credit loss allowance as of March 31, 2025 and December 31, 2024, respectively, because these loans are collateral dependent assets for which the estimated fair values of the collateral were in excess of amortized cost.

As of March 31, 2025 and December 31, 2024, MMLs with an amortized cost of $ 20 million and $ 5 million, respectively, were on nonaccrual status without an allowance for credit losses.

For the three-month period ended June 30, 2025, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the six-month period ended June 30, 2025, the Company recognized $ 1 million of interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

For the three- and six-month periods ended June 30, 2024, the Company recognized no interest income for TREs, CMLs, MMLs, or other loans on nonaccrual status.

Of these loans, TREs with an amortized cost of $ 45 million and $ 140 million had no credit loss allowance as of June 30, 2025 and December 31, 2024, respectively, because these loans are collateral dependent assets for which the estimated fair values of the collateral were in excess of amortized cost.

As of June 30, 2025, no MMLs were on nonaccrual status without an allowance for credit loss.

As of December 31, 2024, MMLs with an amortized cost of $ 5 million were on nonaccrual status without an allowance for credit losses.

Loan Modifications to Borrowers Experiencing Financial Difficulties

The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first three months of 2025 and 2024.

The Company granted certain loan modifications to borrowers experiencing financial difficulty during the first six months of 2025 and 2024.

The types of modifications granted may include interest rate reductions, principal forgiveness, other-than-insignificant payment delays, term extensions or a combination of these types of modifications.

3 unchanged sentences

Three Months Ended

March 31, 2025

June 30, 2025

(In millions) Amortized Cost (1)

% of Total Financial Effect

Transitional Real Estate Loans:

Term extension $ 128 3.1 % Term extension of 22 months on average

Term extension and interest rate reduction 152 3.7 Term extension of 26 months on average and reduction in the weighted-average contractual interest rate from 4.8 % to 4.3 %

Middle Market Loans:

Principal forgiveness $ 4 .1 % Reduction in the amortized cost basis of $ 0.3 million

Principal forgiveness and term

extension 25 .6 Reduction in the amortized cost basis of $ 34 million and term extension of 30 months on average

(1) Net of allowance for credit losses

Three Months Ended

June 30, 2024

(In millions) Amortized Cost (1)

% of Total Financial Effect

Transitional Real Estate Loans:

Other-than-insignificant payment delays and interest rate

$ 121 2.2 % Delay in payments of 31 months on average and reduction in the weighted-average contractual interest rate from 8.1 % to 7.8 %

(1) Net of allowance for credit losses

Six Months Ended

June 30, 2025

(In millions) Amortized Cost (1)

% of Total Financial Effect

Transitional Real Estate Loans:

Term extension $ 159 3.9 % Term extension of 20 months on average

Term extension and interest rate reduction 152 3.7 Term extension of 26 months on average and reduction in the weighted-average contractual interest rate from 4.8 % to 4.3 %

Middle Market Loans:

Principal forgiveness $ 6 .1 % Reduction in the amortized cost basis of $ 4 million

Term extension 33 .8 Term extension of six months on average

1 unchanged sentence

payment delays 28 .7 Delay in principal and interest payments of 35 months on average

Principal forgiveness and term

extension 25 .6 Reduction in the amortized cost basis of $ 34 million and term extension of 30 months on average

(1) Net of allowance for credit losses

Three Months Ended

March 31, 2024

Six Months Ended

June 30, 2024

(In millions) Amortized Cost (1)

4 unchanged sentences

(1) Net of allowance for credit losses

Additionally, an immaterial percentage of MMLs were modified in the form of principal forgiveness during each of the three- and six-month periods ended June 30, 2024.

The modifications resulted in forgiveness of principal of $ 15 million, resulting in a remaining amortized cost of $ 2 million as of June 30, 2024.

The following table presents an aging of loans that received modifications in the 12 months preceding the period presented, at amortized cost.

March 31, 2025

June 30, 2025

(In millions) Current Less Than

5 unchanged sentences

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

Loans that were granted a modification in the past 12 months, as of March 31, 2025 and 2024, and subsequently defaulted in the three-month periods ended March 31, 2025 and 2024, were immaterial.

As of March 31, 2025, the Company had $ 5 million of outstanding commitments to lend additional funds to borrowers experiencing financial difficulty that were granted a loan modification, compared with $ 14 million as of December 31, 2024.

Loans that were granted a modification in the past 12 months, as of June 30, 2025 and 2024, and subsequently defaulted in the three- and six-month periods ended June 30, 2025 and 2024, were immaterial.

As of June 30, 2025, the Company had $ 12 million of outstanding commitments to lend additional funds to borrowers experiencing financial difficulty that were granted a loan modification, compared with $ 14 million as of December 31, 2024.

Allowance for Credit Losses

13 unchanged sentences

The Company continuously monitors the estimation methodology, due to changes in portfolio composition, changes in underwriting practices and significant events or conditions and makes adjustments as necessary.

The Company’s held-to-maturity portfolio includes Japan Government and Agency securities of $ 16.1 billion amortized cost as of March 31, 2025 that meet the requirements for zero-credit-loss expectation and therefore these asset classes have been excluded from the current expected credit loss measurement.

The Company’s held-to-maturity portfolio includes Japan Government and Agency securities of $ 16.6 billion amortized cost as of June 30, 2025 that meet the requirements for zero-credit-loss expectation and therefore these asset classes have been excluded from the current expected credit loss measurement.

An investment in an available-for-sale security may be impaired if the fair value falls below amortized cost.

14 unchanged sentences

Securities Total

Three Months Ended March 31, 2025:

Three Months Ended June 30, 2025:

Balance at March 31, 2025

$ ( 203 ) $ ( 15 ) $ ( 150 ) $ ( 19 ) $ ( 5 ) $ 0 $ ( 392 )

(Addition to) release of allowance for credit losses

( 45 ) 3 ( 19 ) 2 0 0 ( 59 )

Writeoffs, net of recoveries 5 0 42 0 0 0 47

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2025

$ ( 243 ) $ ( 12 ) $ ( 127 ) $ ( 17 ) $ ( 5 ) $ 0 $ ( 404 )

Three Months Ended June 30, 2024:

Balance at March 31, 2024

$ ( 114 ) $ ( 19 ) $ ( 99 ) $ ( 15 ) $ ( 5 ) $ 0 $ ( 252 )

(Addition to) release of allowance for credit losses

( 24 ) 2 1 2 0 0 ( 19 )

Writeoffs, net of recoveries 15 0 0 0 0 0 15

Change in foreign exchange 0 0 0 0 0 0 0

Balance at June 30, 2024 (2)

$ ( 123 ) $ ( 17 ) $ ( 98 ) $ ( 13 ) $ ( 5 ) $ 0 $ ( 256 )

Six Months Ended June 30, 2025:

Balance at December 31, 2024

5 unchanged sentences

Change in foreign exchange 0 0 0 0 0 0 0

Balance at March 31, 2025

Balance at June 30, 2025

$ ( 243 ) $ ( 12 ) $ ( 127 ) $ ( 17 ) $ ( 5 ) $ 0 $ ( 404 )

Three Months Ended March 31, 2024:

Six Months Ended June 30, 2024:

Balance at December 31, 2023

4 unchanged sentences

Change in foreign exchange 0 0 0 0 0 0 0

Balance at March 31, 2024

Balance at June 30, 2024

$ ( 123 ) $ ( 17 ) $ ( 98 ) $ ( 13 ) $ ( 5 ) $ 0 $ ( 256 )

As of March 31, 2025, the Company identified TREs with an amortized cost of $ 311 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions.

As of March 31, 2025, the Company established a credit allowance of $ 25 million related to these loans.

As of June 30, 2025, the Company identified TREs with an amortized cost of $ 136 million in anticipation of potential foreclosure or deed in lieu of foreclosure transactions.

As of June 30, 2025, the Company established a credit allowance of $ 20 million related to these loans.

Other Investments

The table below reflects the composition of the carrying value for other investments as of the periods presented.

(In millions) March 31,

(In millions) June 30,

2025 December 31,

11 unchanged sentences

Tax credits generated by these investments are recorded as an income tax benefit in the consolidated statements of earnings.

Real estate owned (REO) consists of office buildings or other commercial properties obtained through foreclosure or deed in lieu of foreclosure of certain of the Company’s TREs.

As of March 31, 2025 and December 31, 2024, all REO was classified as held-and-used for the production of income, which is carried at cost less accumulated depreciation.

Depreciation expense was $ 6 million and $ 1 million for the three-month periods ended March 31, 2025 and 2024, respectively.

Additionally, as of March 31, 2025 and December 31, 2024, accumulated depreciation was $ 20 million and $ 14 million, respectively.

The Company had $ 2.6 billion and $ 2.8 billion in outstanding commitments to fund investments in limited partnerships, which includes $ 2.0 billion and $ 2.1 billion of unfunded commitments related to VIEs that are non-consolidated as of March 31, 2025 and December 31, 2024, respectively.

REO consists of office buildings or other commercial properties obtained through foreclosure or deed in lieu of foreclosure of certain of the Company’s TREs.

As of June 30, 2025 and December 31, 2024, all REO was classified as held-and-used for the production of income, which is carried at cost less accumulated depreciation.

Depreciation expense was $ 8 million and $ 3 million for the three-month periods and $ 14 million and $ 4 million for the six-month periods ended June 30, 2025 and 2024, respectively.

Additionally, as of June 30, 2025 and December 31, 2024, accumulated depreciation was $ 28 million and $ 14 million, respectively.

The Company had $ 2.4 billion and $ 2.8 billion in outstanding commitments to fund investments in limited partnerships, which included $ 2.1 billion and $ 2.1 billion of unfunded commitments related to VIEs that are non-consolidated as of June 30, 2025 and December 31, 2024, respectively.

Variable Interest Entities (VIEs)

9 unchanged sentences

Investments in Consolidated Variable Interest Entities

(In millions) March 31,

(In millions) June 30,

2025 December 31,

27 unchanged sentences

Investments in Variable Interest Entities Not Consolidated

(In millions) March 31,

(In millions) June 30,

2025 December 31,

6 unchanged sentences

The Company's involvement in the related VIEs is limited to that of a passive investor in asset-backed securities issued by the VIEs.

The Company also invests in fixed maturity debt securities issued by VIEs that are the primary financing vehicles used by their corporate sponsors to raise financing in the capital markets.

The Company also invests in fixed maturity debt securities issued by VIEs that are the

primary financing vehicles used by their corporate sponsors to raise financing in the capital markets.

The variable interests created by these VIEs are principally or solely a result of the debt instruments issued by them.

19 unchanged sentences

Remaining Contractual Maturity of the Agreements

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Overnight

Continuous (1)

days Total Overnight

days 30-90 days Total Overnight

Continuous (1)

12 unchanged sentences

therefore, they are classified as Overnight and Continuous.

In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $ 1.3 billion and $ 3.0 billion at March 31, 2025 and December 31, 2024, respectively, which may not be sold or re-pledged, unless the counterparty is in default.

In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $ 1.5 billion and $ 3.0 billion at June 30, 2025 and December 31, 2024, respectively, which may not be sold or re-pledged, unless the counterparty is in default.

Such securities collateral is not reflected on the consolidated financial statements.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of March 31, 2025, and December 31, 2024, respectively.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of June 30, 2025, and December 31, 2024, respectively.

Certain fixed maturity securities can be pledged as collateral as part of derivative transactions, or pledged to support state deposit requirements on certain investment programs.

37 unchanged sentences

There may also be periodic exchanges of payments at specified intervals based on the agreed upon rates and notional amounts.

Foreign currency swaps are used primarily in the consolidated VIEs in the Company's Aflac Japan portfolio to convert foreign-denominated cash flows to yen, the functional currency of Aflac Japan, in order to minimize cash flow fluctuations.

cash flow fluctuations.

The Company also uses foreign currency swaps to economically convert certain of its U.S.

16 unchanged sentences

The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not reflective of exposure or credit risk.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Asset

18 unchanged sentences

Interest rate swaps 29,280 14 275 17,230 0 329

Forward bond purchase commitment - VIE 28 0 0 0 0 0

Total non-qualifying strategies 57,976 61 868 44,917 55 927

3 unchanged sentences

The Company has designated foreign currency swaps as a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset (“cash flow” hedge).

The remaining maximum length of time for which these cash flows are hedged is approximately two years .

The remaining maximum length of time for which these cash flows are hedged is approximately one year .

The derivatives in the Company's consolidated VIEs that are not designated as accounting hedges are discussed in the Non-qualifying Strategies section of this note.

11 unchanged sentences

The following table shows the carrying amounts of assets designated and qualifying as hedged items in fair value hedges of interest rate risk and the related cumulative hedge adjustment included in the carrying amount.

The Company had no fair value hedges of interest rate risk as of March 31, 2025 and December 31, 2024;

The Company had no fair value hedges of interest rate risk as of June 30, 2025 and December 31, 2024;

therefore, the amounts presented in the table below are related to previous fair value hedges of interest rate risk that were discontinued.

2 unchanged sentences

2025 December 31,

2024 March 31,

2024 June 30,

2025 December 31,

4 unchanged sentences

To mitigate this exposure, the Parent Company's yen-denominated liabilities (see Note 9) have been designated as non-derivative hedges and certain foreign currency forwards and options have been designated as derivative hedges of the foreign currency exposure of the Company's net investment in Aflac Japan.

The Company's net investment hedge was effective during the three-month periods ended March 31, 2025 and 2024, respectively.

The Company's net investment hedge was effective during the three- and six-month periods ended June 30, 2025 and 2024, respectively.

Non-qualifying Strategies

16 unchanged sentences

The following table summarizes the impact to earnings and other comprehensive income (loss) from all derivatives and hedging instruments.

Three Months Ended March 31,

Three Months Ended June 30,

(In millions) Net

23 unchanged sentences

Total $ 0 $ 23 $ ( 219 ) $ 0 $ ( 275 ) $ 420

(1) Impact of cash flow hedges reported as net investment gains (losses) includes $ 1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended March 31, 2025, and $ 1 of losses during the three-month period ended March 31, 2024.

(1) Impact of cash flow hedges reported as net investment gains (losses) includes $ 1 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the three-month period ended June 30, 2025, and $ 1 of losses during the three-month period ended June 30, 2024.

Six Months Ended June 30,

(In millions) Net

(Losses) Other

Comprehensive

Income (Loss) Net

(Losses) Other

Comprehensive

Income (Loss)

Qualifying hedges:

Cash flow hedges:

Foreign currency swaps - VIE $ 0 $ ( 2 ) $ 3 $ 0 $ ( 2 ) $ 0

Total cash flow hedges 0 ( 2 ) (1)

3 0 ( 2 ) (1)

Net investment hedge:

Non-derivative hedging

instruments 0 ( 379 ) 0 501

Foreign currency forwards 62 ( 225 ) 76 300

Total net investment hedge 62 ( 604 ) 76 801

Non-qualifying strategies:

Foreign currency swaps 0 2

Foreign currency swaps - VIE ( 27 ) ( 216 )

Foreign currency forwards ( 7 ) 17

Foreign currency options ( 19 ) ( 182 )

Interest rate swaps ( 29 ) ( 185 )

Total non-qualifying strategies ( 82 ) ( 564 )

Total $ 0 $ ( 22 ) $ ( 601 ) $ 0 $ ( 490 ) $ 801

(1) Impact of cash flow hedges reported as net investment gains (losses) includes $ 2 of losses reclassified from accumulated other comprehensive income (loss) into earnings during the six-month period ended June 30, 2025, and $ 2 of losses during the six-month period ended June 30, 2024.

Interest expense/income on cash flow hedges are recorded in net investment income.

3 unchanged sentences

Gains and losses on net investment hedges related to changes in foreign currency spot rates are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statements of comprehensive income (loss).

As of March 31, 2025, $ 3 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next twelve months.

As of June 30, 2025, $ 2 million of deferred losses on derivative instruments recorded in accumulated other comprehensive income are expected to be reclassified into earnings during the next 12 months.

Credit Risk Assumed through Derivatives

4 unchanged sentences

The risk of counterparty default for the Company's foreign currency swaps, certain foreign currency forwards, and foreign currency options is mitigated by collateral posting requirements that counterparties to those transactions must meet.

As of March 31, 2025, all of the Company's derivative agreement counterparties were investment grade.

As of June 30, 2025, all of the Company's derivative agreement counterparties were investment grade.

The Company engages in over-the-counter (OTC) bilateral derivative transactions directly with unaffiliated third parties under International Swaps and Derivatives Association, Inc.

7 unchanged sentences

Collateral posted by the Company to third parties for derivative transactions can generally be repledged or resold by the counterparties.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $ 883 million and $ 804 million as of March 31, 2025 and December 31, 2024, respectively.

If the credit-risk-related contingent features underlying these agreements had been triggered on March 31, 2025, the Company estimates that it would be required to post a maximum of $ 584 million of additional collateral to these derivative counterparties.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $ 852 million and $ 804 million as of June 30, 2025 and December 31, 2024, respectively.

If the credit-risk-related contingent features underlying these agreements had been triggered on June 30, 2025, the Company estimates that it would be required to post a maximum of $ 584 million of additional collateral to these derivative counterparties.

The Company is generally allowed to sell or repledge collateral obtained from its derivative counterparties, although it does not typically exercise such rights.

9 unchanged sentences

Offsetting of Financial Assets and Derivative Assets

March 31, 2025

June 30, 2025

Gross Amounts Not Offset

51 unchanged sentences

Offsetting of Financial Liabilities and Derivative Liabilities

March 31, 2025

June 30, 2025

Gross Amounts Not Offset

59 unchanged sentences

The following tables present the fair value hierarchy levels of the Company's assets and liabilities that are measured and carried at fair value on a recurring basis.

March 31, 2025

June 30, 2025

(In millions) Quoted Prices in

59 unchanged sentences

The following tables present the carrying amount and fair value categorized by fair value hierarchy level for the Company's financial instruments that are not carried at fair value.

March 31, 2025

June 30, 2025

(In millions) Carrying

76 unchanged sentences

The following tables present the pricing sources for the fair values of the Company's fixed maturity and equity securities.

March 31, 2025

June 30, 2025

(In millions) Quoted Prices in

45 unchanged sentences

Total equity securities $ 715 $ 0 $ 167 $ 882

March 31, 2025

June 30, 2025

(In millions) Quoted Prices in

125 unchanged sentences

These swaps matured in March 2025.

Their fair values were based on observable market inputs, therefore they were classified as Level 2.

Their fair values were based on observable market inputs;

therefore, they were classified as Level 2.

To determine the fair value of its interest rate derivatives, the Company uses inputs that are generally observable in the market or can be derived from observable market data.

39 unchanged sentences

Three Months Ended

March 31, 2025

June 30, 2025

Fixed Maturity Securities Equity

10 unchanged sentences

other comprehensive income (loss) 20 14 1 ( 1 ) 2 0 36

Purchases, issuances, sales and

Purchases, issuances, sales

and settlements:

Purchases 175 48 0 0 24 4 251

10 unchanged sentences

Three Months Ended

March 31, 2024

June 30, 2024

Fixed Maturity Securities Equity

10 unchanged sentences

other comprehensive income (loss) ( 5 ) ( 1 ) ( 1 ) ( 5 ) ( 5 ) 0 ( 17 )

Purchases, issuances, sales and

Purchases, issuances, sales

and settlements:

Purchases 189 39 0 0 58 0 286

9 unchanged sentences

included in earnings $ 1 $ 0 $ 0 $ 0 $ 0 $ ( 3 ) $ ( 2 )

Six Months Ended

June 30, 2025

Fixed Maturity Securities Equity

(In millions) Mortgage-

Securities Public

Utilities Sovereign

Supranational Banks/

Institutions Other

Corporate Total

Balance, beginning of period $ 1,156 $ 647 $ 23 $ 10 $ 231 $ 157 $ 2,224

Net investment gains (losses) included

in earnings 0 0 0 0 0 4 4

Unrealized gains (losses) included in

other comprehensive income (loss) 30 20 2 ( 1 ) 4 0 55

Purchases, issuances, sales

and settlements:

Purchases 609 158 0 0 24 7 798

Issuances 0 0 0 0 0 0 0

Sales 0 0 0 0 0 ( 1 ) ( 1 )

Settlements ( 56 ) ( 33 ) ( 2 ) 0 ( 1 ) 0 ( 92 )

Transfers into Level 3 183 0 0 0 0 0 183

Transfers out of Level 3 0 0 0 0 ( 95 ) 0 ( 95 )

Balance, end of period $ 1,922 $ 792 $ 23 $ 9 $ 163 $ 167 $ 3,076

Changes in unrealized gains

(losses) relating to Level 3 assets

and liabilities still held at the end

of the period included in earnings $ 0 $ 0 $ 0 $ 0 $ 0 $ 4 $ 4

Six Months Ended

June 30, 2024

Fixed Maturity Securities Equity

(In millions) Mortgage-

Securities Public

Utilities Sovereign

Supranational Banks/

Institutions Other

Corporate Total

Balance, beginning of period $ 772 $ 253 $ 30 $ 78 $ 648 $ 248 $ 2,029

Net investment gains (losses) included

in earnings 2 0 0 0 0 ( 7 ) ( 5 )

Unrealized gains (losses) included in

other comprehensive income (loss) ( 9 ) ( 11 ) ( 3 ) ( 9 ) ( 4 ) 0 ( 36 )

Purchases, issuances, sales and

Purchases 307 99 0 5 95 0 506

Issuances 0 0 0 0 0 0 0

Sales 0 0 0 0 0 0 0

Settlements ( 49 ) ( 25 ) ( 2 ) ( 5 ) ( 3 ) ( 84 ) ( 168 )

Transfers into Level 3 190 282 0 0 0 0 472

Transfers out of Level 3 0 ( 233 ) 0 0 ( 352 ) 0 ( 585 )

Balance, end of period $ 1,213 $ 365 $ 25 $ 69 $ 384 $ 157 $ 2,213

Changes in unrealized gains

(losses) relating to Level 3 assets

and liabilities still held at the end

of the period included in earnings $ 2 $ 0 $ 0 $ 0 $ 0 $ ( 6 ) $ ( 4 )

Fair Value Sensitivity

2 unchanged sentences

Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

March 31, 2025

June 30, 2025

(In millions) Fair Value Valuation Technique(s) Unobservable Input Range Weighted Average

53 unchanged sentences

The following tables present a rollforward of deferred policy acquisition costs by reporting segment and disaggregated by product type.

March 31, 2025

June 30, 2025

Aflac Japan Aflac U.S.

11 unchanged sentences

other 257 170 41 4 0 0 0 0 0 0 0 472

Balance at March 31, 2025

Balance at June 30, 2025

$ 3,078 $ 1,998 $ 482 $ 56 $ 908 $ 636 $ 1,349 $ 456 $ 86 $ 247 $ 0 $ 9,296

23 unchanged sentences

Future DAC amortization is impacted by persistency.

There were no changes to the inputs, judgments, assumptions or methods used to determine amortization amounts during the three-month periods ended March 31, 2025 and 2024.

There were no changes to the inputs, judgments, assumptions or methods used to determine amortization amounts during the six-month periods ended June 30, 2025 and 2024.

For additional information on deferred policy acquisition costs, see Notes 1 and 6 of the Notes to the Consolidated Financial Statements in the 2024 Annual Report.

5 unchanged sentences

The present value of expected future net premiums and the present value of expected future policy benefits are presented gross of internal and external ceded reinsurance.

March 31, 2025

June 30, 2025

Aflac Japan Aflac U.S.

20 unchanged sentences

Effect of changes in discount rate assumptions ( 463 ) ( 616 ) ( 76 ) ( 50 ) ( 143 ) ( 59 ) ( 364 ) ( 77 ) ( 9 ) ( 45 ) 38

Balance at March 31, 2025

Balance at June 30, 2025

$ 14,732 $ 11,982 $ 5,306 $ 854 $ 2,524 $ 1,681 $ 4,067 $ 1,175 $ 207 $ 977 $ 1,160

14 unchanged sentences

Effect of changes in discount rate assumptions 675 ( 3,134 ) ( 3,800 ) ( 888 ) ( 200 ) ( 93 ) ( 1,139 ) ( 142 ) ( 27 ) ( 246 ) 38

Balance at March 31, 2025

Balance at June 30, 2025

41,726 20,664 24,451 4,255 3,154 2,367 10,942 1,947 452 1,980 1,622

52 unchanged sentences

The following tables present the weighted-average interest rates and weighted-average liability duration (calculated using the original discount rate) by reporting segment and disaggregated by product type.

March 31, 2025

June 30, 2025

Aflac Japan Aflac U.S.

27 unchanged sentences

The deferred profit liability for limited-payment contracts and the deferred reinsurance gain liability are presented together with the liability for future policy benefits in the consolidated balance sheets and have been included as reconciling items in the table below.

(In millions) March 31,

(In millions) June 30,

2025 December 31,

31 unchanged sentences

For the discount rates applicable to tenors for which the Japan single-A debt market is not liquid but there is sufficient observable market data and/or the observable market data is available for similar instruments (between 10 and 30 years), the Company estimates tenor-specific single-A credit spreads and applies them to risk-free government rates.

Lastly, for the tenors where there is limited or no observable single-A or similar market data or risk-free government rates (beyond 30

years), the discount curve is derived by extrapolation of risk free rates beyond their last liquid point following the Smith-Wilson method and grading of the estimated forward credit spread anchored by the ultimate forward rate.

Lastly, for the tenors where there is limited or no observable single-A or similar market data or risk-free government rates (beyond 30 years), the discount curve is derived by extrapolation of risk free rates beyond their last liquid point following the Smith-Wilson method and grading of the estimated forward credit spread anchored by the ultimate forward rate.

The ultimate forward rate is based on the economic value-based solvency regime, which is consistent with the International Association of Insurance Supervisors (IAIS) Insurance Capital Standards (ICS) (effective for Aflac Japan's 2025 fiscal year-end), and is adjusted for credit and inflation components.

7 unchanged sentences

and Japan segments is based on the assumption of long-term global economic convergence.

There were no changes to the methods used to determine the discount rates during the three-month periods ended March 31, 2025 and 2024.

There were no changes to the methods used to determine the discount rates during the six-month periods ended June 30, 2025 and 2024.

Mortality rate assumptions are based on industry tables and adjusted for the Company's actual or expected experience where credible or appropriate.

7 unchanged sentences

Policy provisions, such as reaching premium paid-up status, are taken into account when setting assumptions.

For the three-month periods ended March 31, 2025 and 2024 the variance of actual experience from expected experience was primarily due to favorable variances in morbidity assumptions as compared to actual experience.

There were no changes to the inputs, judgments, assumptions or methods used in measuring the liability for future policy benefits during the three-month periods ended March 31, 2025 and 2024.

For the three- and six-month periods ended June 30, 2025 and 2024, the variance of actual experience from expected experience was primarily due to favorable variances in morbidity assumptions as compared to actual experience.

There were no changes to the inputs, judgments, assumptions or methods used in measuring the liability for future policy benefits during the six-month periods ended June 30, 2025 and 2024.

The Company performs an annual review of its assumptions during the third quarter.

1 unchanged sentence

The following table summarizes the amount of net earned premiums recognized in the consolidated statements of earnings by reporting segment and disaggregated by product type.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2025 2024 2025 2024

3 unchanged sentences

Life insurance 328 316 644 655

Other 33 35 65 69

Accident 309 316 620 641

4 unchanged sentences

Life insurance 170 141 339 279

Other 41 25 90 45

Corporate and other 206 155 404 320

2 unchanged sentences

The following table summarizes the amount of interest expense related to insurance contracts recognized in benefits and claims, excluding reserve remeasurement in the consolidated statements of earnings by reporting segment and disaggregated by product type.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2025 2024 2025 2024

3 unchanged sentences

Life insurance 116 114 230 232

Other 20 18 38 37

Accident 6 7 13 13

Disability 8 8 15 16

3 unchanged sentences

Life insurance 12 10 23 20

Other 6 6 12 13

Total $ 576 $ 565 $ 1,135 $ 1,141

6 unchanged sentences

These are the primary factors that result in future gross premiums lower than future benefit and expense payments for certain lines of business of the Company.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Gross

16 unchanged sentences

Total $ 150,364 $ 185,069 $ 142,653 $ 173,393

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Gross

16 unchanged sentences

Total $ 108,491 $ 113,560 $ 105,686 $ 111,508

Loss expense as a result of NPR capping for the three-month periods ended March 31, 2025 and 2024 was immaterial.

Loss expense as a result of NPR capping for the three- and six-month periods ended June 30, 2025 and 2024 was immaterial.

Other Policyholders' Funds

As of March 31, 2025 and December 31, 2024, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan.

As of June 30, 2025 and December 31, 2024, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan.

The Company's annuities have fixed benefits and premiums.

The following table presents the changes in other policyholders’ funds.

(In millions) March 31,

(In millions) June 30,

2025 December 31,

13 unchanged sentences

The following table presents other policyholders’ funds balances by range of guaranteed crediting rates.

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions) Range of Guaranteed

7 unchanged sentences

(1) Aflac Japan fixed annuities

(2) Weighted-average crediting rate of 1.5 % at March 31, 2025 and December 31, 2024.

(2) Weighted-average crediting rate of 1.5 % at June 30, 2025 and December 31, 2024.

Aflac Japan’s fixed annuities have guaranteed fixed crediting rates which results in the policyholders' funds balances being sufficient to cover all guaranteed benefit amounts.

6 unchanged sentences

The following table reconciles direct earned premiums, direct benefits and claims, excluding reserve remeasurement gains and losses, and reserve remeasurement gains and losses to net amounts after the effect of reinsurance.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In millions) 2025 2024 2025 2024

11 unchanged sentences

Direct ( 37 ) ( 51 ) ( 78 ) ( 108 )

Ceded 0 0 0 1

Reserve remeasurement (gains) losses ( 37 ) ( 51 ) ( 78 ) ( 107 )

1 unchanged sentence

The Company has recorded a deferred reinsurance gain liability related to reinsurance transactions which represents ceded reserves in excess of consideration paid, or consideration received in excess of assumed reserves.

The remaining consolidated deferred reinsurance gain liability of $ 152 million and $ 146 million as of March 31, 2025 and December 31, 2024, respectively, is included in future policy benefits in the consolidated balance sheets and is being amortized into income over the expected lives of the policies.

The remaining consolidated deferred reinsurance gain liability of $ 154 million and $ 146 million as of June 30, 2025 and December 31, 2024, respectively, is included in future policy benefits in the consolidated balance sheets and is being amortized into income over the expected lives of the policies.

The Company has also recorded a reinsurance recoverable for reinsurance transactions.

The reinsurance recoverable, which is included in other assets in the consolidated balance sheets, is reported net of allowance for credit losses and had a remaining balance of $ 166 million and $ 163 million as of March 31, 2025 and December 31, 2024, respectively.

As of both March 31, 2025 and December 31, 2024, the allowance for credit losses related to the Company's reinsurance recoverable balance was $ 4 million.

The credit allowance for the reinsurance recoverable balance is estimated using a PD / LGD method and the key credit quality indicator is the credit rating of the Company’s reinsurance counterparty.

The Company uses external credit ratings focused on the reinsurer’s financial strength and credit worthiness.

As of March 31, 2025, the Company's reinsurance counterparties were rated A+.

As of June 30, 2025 and December 31, 2024, the allowance for credit losses related to the Company's reinsurance recoverable balance was $ 4 million.

The credit allowance for the reinsurance recoverable balance is estimated using a PD / LGD method and the key credit quality indicator is the credit rating of the Company’s significant reinsurance counterparties.

The Company uses external credit ratings focused on these reinsurers' financial strength and credit worthiness.

As of June 30, 2025, the Company's significant reinsurance counterparties were rated A+.

The Company monitors the credit ratings periodically, but not less frequently than quarterly.

4 unchanged sentences

A summary of notes payable and lease obligations follows:

(In millions) March 31,

(In millions) June 30,

2025 December 31,

14 unchanged sentences

1.159 % senior notes due October 2030 (principal amount ¥ 29.3 billion)

1.726 % senior notes due October 2030 (principal amount ¥ 35.0 billion)

1.412 % senior notes due March 2031 (principal amount ¥ 27.9 billion)

2 unchanged sentences

.750 % senior notes due March 2032 (principal amount ¥ 20.7 billion)

1.990 % senior notes due May 2032 (principal amount ¥ 18.2 billion)

1.320 % senior notes due December 2032 (principal amount ¥ 21.1 billion)

2.003 % senior notes due December 2032 (principal amount ¥ 23.4 billion)

.844 % senior notes due April 2033 (principal amount ¥ 12.0 billion)

4 unchanged sentences

.830 % senior notes due March 2035 (principal amount ¥ 10.6 billion)

2.320 % senior notes due May 2035 (principal amount ¥ 38.3 billion)

2.369 % senior notes due June 2035 (principal amount ¥ 9.5 billion)

1.740 % senior notes due March 2036 (principal amount ¥ 15.0 billion)

4 unchanged sentences

1.122 % senior notes due December 2039 (principal amount ¥ 6.3 billion)

2.650 % senior notes due May 2040 (principal amount ¥ 11.6 billion)

2.779 % senior notes due June 2040 (principal amount ¥ 7.0 billion)

1.264 % senior notes due April 2041 (principal amount ¥ 10.0 billion)

2.160 % senior notes due March 2044 (principal amount ¥ 5.7 billion)

3.040 % senior notes due May 2045 (principal amount ¥ 7.0 billion)

2.108 % subordinated debentures due October 2047 (principal amount ¥ 60.0 billion)

14 unchanged sentences

Amounts in the table above are reported net of debt issuance costs and issuance premiums or discounts, if applicable, that are being amortized over the life of the notes.

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $ 49 million and $ 46 million for the three-month periods March 31, 2025 and 2024, respectively.

A summary of the Company's lines of credit as of March 31, 2025 follows:

In June 2025, the Parent Company issued four series of senior notes totaling ¥ 74.9 billion through a public debt offering under its U.S.

shelf registration statement.

The first series, which totaled ¥ 35.0 billion, bears interest at a fixed rate of 1.726 % per annum, payable semi-annually, and will mature in October 2030.

The second series, which totaled ¥ 23.4 billion, bears interest at a fixed rate of 2.003 % per annum, payable semi-annually, and will mature in December 2032.

The third series, which totaled ¥ 9.5 billion, bears interest at a fixed rate of 2.369 % per annum, payable semi-annually, and will mature in June 2035.

The fourth series, which totaled ¥ 7.0 billion, bears interest at a fixed rate of 2.779 % per annum, payable semi-annually, and will mature in June 2040.

These notes are redeemable at the Parent Company’s option at any time, in whole but not in part, upon the occurrence of certain changes affecting U.S.

taxation, as specified in the indenture governing the terms of the issuance.

In addition, the notes maturing in October 2030, December 2032, June 2035 and June 2040 are redeemable at the Parent Company's option, in whole or in part from time to time, on or after July 18, 2030, September 14, 2032, December 5, 2034, and December 5, 2039, respectively, at a redemption price equal to the aggregate principal amount of the applicable series to be redeemed plus accrued and unpaid interest on the principal amount to be redeemed to, but excluding, the date of redemption.

In May 2025, the Parent Company issued four series of senior notes totaling ¥ 75.1 billion through a private placement.

The first series, which totaled ¥ 18.2 billion, bears interest at a fixed rate of 1.990 % per annum, payable semi-annually, and will mature in May 2032.

The second series, which totaled ¥ 38.3 billion, bears interest at a fixed rate of 2.320 % per annum, payable semi-annually, and will mature in May 2035.

The third series, which totaled ¥ 11.6 billion, bears interest at a fixed rate of 2.650 % per annum, payable semi-annually, and will mature in May 2040.

The fourth series, which totaled ¥ 7.0 billion, bears interest at a fixed rate of 3.040 % per annum, payable semi-annually, and will mature in May 2045.

These notes are redeemable at the Parent Company's option (i) in whole at any time or (ii) in part from time to time in an amount not less than 5% of the aggregate principal amount then outstanding of the notes to be redeemed.

Interest expense related to the Company's notes payable, which is included in interest expense in the consolidated statements of earnings, was $ 51 million and $ 49 million for the three-month periods and $ 100 million and $ 96 million for the six-month periods ended June 30, 2025 and 2024, respectively.

A summary of the Company's lines of credit as of June 30, 2025 follows:

Borrower(s) Type Term Expiration

8 unchanged sentences

¥ 0.0 billion

A rate per annum equal to (a) Tokyo Interbank Market Rate (TIBOR) plus, the alternative applicable TIBOR margin during the availability period from the closing date to the commitment termination date or (b) the TIBOR rate offered by the agent to major banks in yen for the applicable period plus, the applicable alternative TIBOR margin during the term out period No later than

A rate per annum equal to, at the Company's option, either (a) Tokyo Interbank Market Rate (TIBOR) plus an applicable margin or (b) an alternative TIBOR based on the rate offered by the agent to major banks in yen for the applicable period plus an applicable margin No later than

May 14, 2030 .28 % to .45 %, depending on the Parent Company's debt ratings as of the date of determination

51 unchanged sentences

(1) Intercompany credit agreement

The Company was in compliance with all of the covenants of its notes payable and lines of credit at March 31, 2025.

No events of default or defaults occurred during the three-month period ended March 31, 2025.

The Company was in compliance with all of the covenants of its notes payable and lines of credit at June 30, 2025.

No events of default or defaults occurred during the six-month period ended June 30, 2025.

For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in the 2024 Annual Report.

SHAREHOLDERS’ EQUITY

The following table is a reconciliation of the number of shares of the Company's common stock for the three-month periods ended March 31.

The following table is a reconciliation of the number of shares of the Company's common stock for the six-month periods ended June 30.

(In thousands of shares) 2025 2024

15 unchanged sentences

Share Repurchase Program:

During the first three months of 2025, the Company repurchased 8.5 million shares of its common stock for $ 900 million as part of its share repurchase program.

During the first three months of 2024, the Company repurchased 9.3 million shares of its common stock for $ 750 million as part of its share repurchase program.

As of March 31, 2025, a remaining balance of 38.8 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

During the first six months of 2025, the Company repurchased 16.4 million shares of its common stock for $ 1.7 billion as part of its share repurchase program.

During the first six months of 2024, the Company repurchased 18.6 million shares of its common stock for $ 1.6 billion as part of its share repurchase program.

As of June 30, 2025, a remaining balance of 30.9 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

Outstanding share-based awards are excluded from the calculation of weighted-average shares used in the computation of basic earnings per share (EPS), but are included in the calculation of weighted-average shares used in the computation of diluted EPS.

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The following table presents the approximate number of share-based awards to purchase shares, on a weighted-average basis, that were considered to be anti-dilutive and were excluded from the calculation of diluted EPS for the following periods.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

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Three Months Ended

March 31, 2025

June 30, 2025

(In millions) Unrealized Foreign

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Adjustment Total

Balance at December 31, 2024 $ ( 4,998 ) $ 24 $ ( 20 ) $ 2,006 $ 10 $ ( 2,978 )

Balance at March 31, 2025 $ ( 4,549 ) $ ( 1,233 ) $ ( 18 ) $ 3,899 $ 42 $ ( 1,859 )

Other comprehensive

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income (loss) 267 ( 595 ) 1 1,695 0 1,368

Balance at March 31, 2025 $ ( 4,549 ) $ ( 1,233 ) $ ( 18 ) $ 3,899 $ 42 $ ( 1,859 )

Balance at June 30, 2025 $ ( 4,282 ) $ ( 1,828 ) $ ( 17 ) $ 5,594 $ 42 $ ( 491 )

All amounts in the table above are net of tax.

Three Months Ended

March 31, 2024

June 30, 2024

(In millions) Unrealized Foreign

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Gains (Losses)

on Derivatives Effect of Changes in Discount Rate Assumptions Pension Liability Adjustment Total

on Derivatives Effect of Changes in Discount Rate Assumptions Pension

Adjustment Total

Balance at March 31, 2024 $ ( 4,666 ) $ 1,092 $ ( 26 ) $ ( 1,495 ) $ ( 7 ) $ ( 5,102 )

Other comprehensive

income (loss) before

reclassification ( 425 ) ( 652 ) 3 2,920 3 1,849

Amounts reclassified from

accumulated other

comprehensive income

(loss) 0 ( 39 ) 1 0 ( 1 ) ( 39 )

Net current-period other

comprehensive

income (loss) ( 425 ) ( 691 ) 4 2,920 2 1,810

Balance at June 30, 2024 $ ( 5,091 ) $ 401 $ ( 22 ) $ 1,425 $ ( 5 ) $ ( 3,292 )

All amounts in the table above are net of tax.

Six Months Ended

June 30, 2025

(In millions) Unrealized Foreign

Currency Translation

Gains (Losses) Unrealized

Gains (Losses)

on Fixed Maturity Securities Unrealized

Gains (Losses)

on Derivatives Effect of Changes in Discount Rate Assumptions Pension

Adjustment Total

Balance at December 31, 2024 $ ( 4,998 ) $ 24 $ ( 20 ) $ 2,006 $ 10 $ ( 2,978 )

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income (loss) 716 ( 1,852 ) 3 3,588 32 2,487

Balance at March 31, 2024 $ ( 4,666 ) $ 1,092 $ ( 26 ) $ ( 1,495 ) $ ( 7 ) $ ( 5,102 )

Balance at June 30, 2025 $ ( 4,282 ) $ ( 1,828 ) $ ( 17 ) $ 5,594 $ 42 $ ( 491 )

All amounts in the table above are net of tax.

Six Months Ended

June 30, 2024

(In millions) Unrealized Foreign

Currency Translation

Gains (Losses) Unrealized

Gains (Losses)

on Fixed Maturity Securities Unrealized

Gains (Losses)

on Derivatives Effect of Changes in Discount Rate Assumptions Pension

Adjustment Total

Balance at December 31, 2023 $ ( 4,069 ) $ 1,139 $ ( 22 ) $ ( 2,560 ) $ ( 8 ) $ ( 5,520 )

Other comprehensive

income (loss) before

reclassification ( 1,022 ) ( 566 ) ( 2 ) 3,985 4 2,399

Amounts reclassified from

accumulated other

comprehensive income

(loss) 0 ( 172 ) 2 0 ( 1 ) ( 171 )

Net current-period other

comprehensive

income (loss) ( 1,022 ) ( 738 ) 0 3,985 3 2,228

Balance at June 30, 2024 $ ( 5,091 ) $ 401 $ ( 22 ) $ 1,425 $ ( 5 ) $ ( 3,292 )

All amounts in the table above are net of tax.

The tables below summarize the amounts reclassified from each component of accumulated other comprehensive income into net earnings for the following periods.

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(In millions) Three Months Ended

March 31, 2025

June 30, 2025

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

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(In millions) Three Months Ended

March 31, 2024

June 30, 2024

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

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$ ( 1 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ 1 Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ 1 Net of tax

Total reclassifications for the period $ 39 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

(In millions) Six Months Ended

June 30, 2025

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

Statements of Earnings

Unrealized gains (losses) on available-for-sale

securities $ 26 Net investment gains (losses)

( 5 ) Tax (expense) or benefit (1)

$ 21 Net of tax

Unrealized gains (losses) on derivatives $ ( 2 ) Net investment gains (losses)

0 Tax (expense) or benefit (1)

$ ( 2 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ 0 Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ 0 Net of tax

Total reclassifications for the period $ 19 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

(In millions) Six Months Ended

June 30, 2024

Details about Accumulated Other Comprehensive Income Components Amount Reclassified from Accumulated Other Comprehensive Income Affected Line Item in the

Statements of Earnings

Unrealized gains (losses) on available-for-sale

securities $ 218 Net investment gains (losses)

( 46 ) Tax (expense) or benefit (1)

$ 172 Net of tax

Unrealized gains (losses) on derivatives $ ( 2 ) Net investment gains (losses)

0 Tax (expense) or benefit (1)

$ ( 2 ) Net of tax

Amortization of defined benefit pension items:

Actuarial gains (losses) $ 1 Acquisition and operating expenses (2)

Prior service (cost) credit 0 Acquisition and operating expenses (2)

0 Tax (expense) or benefit (1)

$ 1 Net of tax

Total reclassifications for the period $ 171 Net of tax

(1) Based on 21 % tax rate

(2) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost (see Note 12 for additional details).

SHARE-BASED COMPENSATION

As of March 31, 2025, the Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (As Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan).

As of June 30, 2025, the Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (As Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan).

Share-based awards are designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company.

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The Plan allows for a maximum number of shares issuable over its term of 75 million shares including 38 million shares that may be awarded in respect of awards other than options or stock appreciation rights.

If any awards granted under the Plan are forfeited or are terminated before being exercised or settled for any reason other than tax forfeiture, then the shares underlying the awards will again be available under the Plan.

If any awards granted under the

Plan are forfeited or are terminated before being exercised or settled for any reason other than tax forfeiture, then the shares underlying the awards will again be available under the Plan.

The Plan allows awards to Company employees for incentive stock options (ISOs), non-qualifying stock options (NQSOs), stock appreciation rights, restricted stock and restricted stock units.

Non-employee directors are eligible for grants of NQSOs, restricted stock, and stock appreciation rights.

As of March 31, 2025, approximately 32.6 million shares were available for future grants under this plan.

As of June 30, 2025, approximately 32.6 million shares were available for future grants under this plan.

The ISOs, NQSOs and stock appreciation rights granted under the amended Plan have an exercise price of at least the fair market value of the underlying stock on the grant date and have an expiration date no later than 10 years from the grant date.

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Performance-based vesting conditions generally include the attainment of goals related to the Company's financial performance.

As of March 31, 2025, the only performance-based awards issued and outstanding were restricted stock awards and units.

As of June 30, 2025, the only performance-based awards issued and outstanding were restricted stock awards and units.

The Compensation Committee of the Board of Directors has the discretion to determine vesting schedules.

Share-based awards granted to U.S.-based grantees are settled with authorized but unissued Company stock, while those issued to Japan-based grantees are settled with treasury shares.

The following table provides information on stock options outstanding and exercisable at March 31, 2025.

The following table provides information on stock options outstanding and exercisable at June 30, 2025.

Option Shares

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Exercisable 447 1.5 31 34.98

The Company received cash from the exercise of stock options in the amount of $ 5 million during the first three months of both 2025 and 2024.

The tax benefit realized as a result of stock option exercises and restricted stock releases was $ 29 million in the first three months of 2025, compared with $ 24 million in the first three months of 2024.

As of March 31, 2025, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $ 50 million, of which $ 25 million ( 1.2 million shares) was related to restricted stock awards and units with a performance-based vesting condition.

The Company received cash from the exercise of stock options in the amount of $ 5 million and $ 9 million during the first six months of 2025 and 2024, respectively.

The tax benefit realized as a result of stock option exercises and restricted stock releases was $ 30 million in the first six months of 2025, compared with $ 27 million in the first six months of 2024.

As of June 30, 2025, total compensation cost not yet recognized in the Company's consolidated financial statements related to restricted stock awards and units was $ 44 million, of which $ 22 million ( 1.6 million shares) was related to restricted stock awards and units with a performance-based vesting condition.

The Company expects to recognize these amounts over a weighted-average period of approximately 1.8 years.

There are no other contractual terms covering restricted stock awards once vested.

The following table summarizes restricted stock activity during the three-month period ended March 31, 2025.

The following table summarizes restricted stock activity during the six-month period ended June 30, 2025.

(In thousands of shares) Shares Weighted-Average

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( 1,270 ) 68.65

Restricted stock at March 31, 2025

Restricted stock at June 30, 2025

1,857 $ 85.81

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For certain employees and former employees, additional coverage is provided for all medical expenses for life.

Pension and other postretirement benefit expenses are included in acquisition and operating expenses in the consolidated statements of earnings, which includes other components of net periodic pension cost and postretirement costs (other than service costs) of $ 57 million and $ 2 million for the three-month periods ended March 31, 2025 and 2024, respectively.

Pension and other postretirement benefit expenses are included in acquisition and operating expenses in the consolidated statements of earnings, which includes other components of net periodic pension cost and postretirement costs (other than service costs) of $ 3 million and $ 2 million for the three-month periods and $ 60 million and $ 4 million for the six-month periods ended June 30, 2025 and 2024, respectively.

Total net periodic benefit cost includes the following components:

Three Months Ended March 31,

Three Months Ended June 30,

Pension Benefits Other

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Net periodic benefit cost (credit) $ 3 $ 4 $ 2 $ 1 $ 1 $ 0

During the three months ended March 31, 2025, Aflac Japan contributed approximately $ 6 million (using the weighted-average yen/dollar exchange rate for the three-month period ended March 31, 2025) to the Japanese funded defined benefit plan, and Aflac U.S.

Six Months Ended June 30,

Pension Benefits Other

Postretirement Benefits

(In millions) 2025 2024 2025 2024 2025 2024

Components of net periodic

benefit cost:

Service cost $ 6 $ 7 $ 0 $ 0 $ 0 $ 0

Interest cost 4 4 10 19 0 0

Expected return on plan assets ( 4 ) ( 3 ) ( 5 ) ( 15 ) 0 0

Amortization of net actuarial

(gain) loss 0 0 ( 1 ) ( 1 ) 1 0

Settlement (gain) loss 0 0 55 0 0 0

Net periodic benefit cost (credit) $ 6 $ 8 $ 59 $ 3 $ 1 $ 0

During the six months ended June 30, 2025, Aflac Japan contributed approximately $ 12 million (using the weighted-average yen/dollar exchange rate for the six-month period ended June 30, 2025) to the Japanese funded defined benefit plan, and Aflac U.S.

did not make a contribution to the U.S.

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COMMITMENTS AND CONTINGENT LIABILITIES

In February 2025, the Company renewed an outsourcing agreement with an information technology and data services company to provide application maintenance and development services for Aflac Japan.

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 10.3 billion ($ 69 million using the March 31, 2025 exchange rate).

The Company is a defendant in various lawsuits and receives various regulatory inquiries considered to be in the normal course of business.

Members of the Company's senior legal and financial management teams review litigation and regulatory inquiries on a quarterly and annual basis.

Members of the Company's senior legal and financial management teams review litigation and regulatory inquiries on a quarterly and annual basis and the Company updates the related estimates, accruals, and disclosures, if any, based on such reviews.

For litigation and regulatory matters where it is probable that a loss has been incurred, and the amount of that loss can be reasonably estimated, the Company establishes accruals for loss contingencies.

Where a loss may be reasonably possible but not probable, or is probable but not reasonably estimable, no accrual is recorded.

The final results of any litigation or regulatory inquiries cannot be predicted with certainty.

Although some of this litigation is pending in states where large punitive damages, bearing little relation to the actual damages sustained by plaintiffs, have been awarded in recent years, the Company believes the outcome of pending litigation will not have a material adverse effect on its financial position, results of operations, or cash flows.

Cyber Incident

On June 12, 2025, the Company identified an incident involving unauthorized access to its network in the U.S.

The Company promptly initiated its cybersecurity incident response protocols and believes that it contained the intrusion within hours.

The Company’s business remains operational and its systems were not affected by ransomware.

The Company continues to serve its policyholders as it responds to this incident and can underwrite policies, review claims, and otherwise service customers as usual.

The Company has been conducting a review of potentially impacted individuals and data.

The Company is still in the process of validating the extent and nature of the files that were involved and the Company believes that the potential amount of loss cannot be reasonably estimated at this time.

Outsourcing Agreements and Other Commitments

In May 2025, the Company renewed an outsourcing agreement with an information technology and data services company to provide application maintenance and development services for Aflac Japan.

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 10.9 billion ($ 75 million using the June 30, 2025 exchange rate).

In February 2025, the Company renewed an outsourcing agreement with an information technology and data services company to provide application maintenance and development services for Aflac Japan.

The agreement has a remaining term of three years with an aggregate remaining cost of ¥ 9.4 billion ($ 65 million using the June 30, 2025 exchange rate).

See Note 3 for details on certain investment commitments.

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Under state guaranty association laws, certain insurance companies can be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business.

Guaranty fund assessments for the three-month periods ended March 31, 2025 and 2024 were immaterial.

Guaranty fund assessments for the three- and six-month periods ended June 30, 2025 and 2024 were immaterial.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements