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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-08-05 · 201 added, 179 removed, 1162 unchanged (25% of the section changed)

40 unchanged sentences

MD&A OVERVIEW

MD&A is intended to inform the reader about matters affecting the financial condition and results of operations of Aflac Incorporated and its subsidiaries for the six-month periods ended June 30, 2025 and 2024, respectively.

MD&A is intended to inform the reader about matters affecting the financial condition and results of operations of Aflac Incorporated and its subsidiaries for the nine-month periods ended September 30, 2025 and 2024, respectively.

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

27 unchanged sentences

Performance Highlights

Total revenues were $4.2 billion in the second quarter of 2025, compared with $5.1 billion in the second quarter of 2024, primarily due to net investment losses of $421 million in the second quarter of 2025 compared with net investment gains of $696 million in the second quarter of 2024.

Net earnings were $599 million, or $1.11 per diluted share, in the second quarter of 2025, compared with $1.8 billion, or $3.10 per diluted share, in the second quarter of 2024.

Total revenues were $7.6 billion in the first six months of 2025, compared with $10.6 billion in the first six months of 2024, primarily due to net investment losses of $1.4 billion in the first six months of 2025 compared with net investment gains of $1.6 billion in the first six months of 2024.

Net earnings were $628 million, or $1.16 per diluted share, in the first six months of 2025, compared with $3.6 billion, or $6.35 per diluted share, in the first six months of 2024.

Net earnings in the second quarter of 2025 included net investment losses of $421 million, compared with net investment gains of $696 million in the second quarter of 2024.

Net investment losses in the second quarter of 2025 included $452 million of net losses from certain derivative and foreign currency gains or losses;

an increase in credit loss allowances of $58 million;

$6 million of impairments and $3 million of net losses from sales and redemptions;

offset by a $98 million gain from an increase in the fair value of equity securities.

Net earnings in the first six months of 2025 included net investment losses of $1.4 billion, compared with net investment gains of $1.6 billion in the first six months of 2024.

Net investment losses in the first six months of 2025 included $1.3 billion of net losses from certain derivative and foreign currency gains or losses;

Total revenues were $4.7 billion in the third quarter of 2025, compared with $2.9 billion in the third quarter of 2024, primarily due to net investment gains of $275 million in the third quarter of 2025 compared with net investment losses of $1.4 billion in the third quarter of 2024.

Net earnings were $1.6 billion, or $3.08 per diluted share, in the third quarter of 2025, compared with $(93) million, or $(.17) per diluted share, in the third quarter of 2024.

Total revenues were $12.3 billion in the first nine months of 2025, compared with $13.5 billion in the first nine months of 2024, primarily due to net investment losses of $1.1 billion in the first nine months of 2025 compared with net investment gains of $239 million in the first nine months of 2024.

Net earnings were $2.3 billion, or $4.21 per diluted share, in the first nine months of 2025, compared with $3.5 billion, or $6.23 per diluted share, in the first nine months of 2024.

Net earnings in the third quarter of 2025 included net investment gains of $275 million, compared with net investment losses of $1.4 billion in the third quarter of 2024.

Net investment gains in the third quarter of 2025 included $285 million of net gains from certain derivative and foreign currency gains or losses;

$33 million of net gains from sales and redemptions;

a $10 million gain from an increase in the fair value of equity securities;

offset by an increase in credit loss allowances of $53 million.

Net earnings in the first nine months of 2025 included net investment losses of $1.1 billion, compared with net investment gains of $239 million in the first nine months of 2024.

Net investment losses in the first nine months of 2025 included $1.1 billion of net losses from certain derivative and foreign currency gains or losses;

an increase in credit loss allowances of $166 million and $6 million of impairments;

offset by $71 million of net gains from sales and redemptions and a $47 million gain from an increase in the fair value of equity securities.

The average yen/dollar exchange rate (1) for the three-month period ended June 30, 2025 was 144.60, or 7.7% stronger than the average yen/dollar exchange rate (1) of 155.70 for the same period in 2024.

The average yen/dollar exchange rate (1) for the six-month period ended June 30, 2025 was 148.32, or 2.7% stronger than the average yen/dollar exchange rate (1) of 152.30 for the same period in 2024.

Adjusted earnings (2) in the second quarter of 2025 were $957 million, or $1.78 per diluted share, compared with $1.0 billion, or $1.83 per diluted share in the second quarter of 2024.

The stronger yen/dollar exchange rate positively impacted adjusted earnings per diluted share by $.04.

Adjusted earnings (2) in the first six months of 2025 were $1.9 billion, or $3.43 per diluted share, compared with $2.0 billion, or $3.49 per diluted share, in the first six months of 2024.

The average yen/dollar exchange rate (1) for the three-month period ended September 30, 2025 was 147.68, or .2% stronger than the average yen/dollar exchange rate (1) of 147.95 for the same period in 2024.

The average yen/dollar exchange rate (1) for the nine-month period ended September 30, 2025 was 148.03, or 1.7% stronger than the average yen/dollar exchange rate (1) of 150.60 for the same period in 2024.

Adjusted earnings (2) in the third quarter of 2025 were $1.3 billion, or $2.49 per diluted share, compared with $1.2 billion, or $2.16 per diluted share in the third quarter of 2024.

The slightly stronger yen/dollar exchange rate did not impact adjusted earnings per diluted share.

Adjusted earnings (2) in the first nine months of 2025 were $3.2 billion, or $5.92 per diluted share, compared with $3.2 billion, or $5.64 per diluted share, in the first nine months of 2024.

The stronger yen/dollar exchange rate positively impacted adjusted earnings per diluted share by $.03.

In the first six months of 2025, Aflac Incorporated repurchased $1.7 billion, or 16.4 million of its common shares.

At June 30, 2025, the Company had 30.9 million remaining shares authorized for repurchase.

Shareholders’ equity was $27.2 billion, or $50.86 per share, at June 30, 2025, compared with $26.1 billion, or $47.45 per share, at December 31, 2024.

Shareholders’ equity at June 30, 2025 included a cumulative increase of $5.6 billion from the effect of changes in discount rate assumptions on insurance reserves, compared with a corresponding cumulative increase of $2.0 billion at December 31, 2024, and a net unrealized loss on investment securities and derivatives of $1.8 billion, compared with a net unrealized gain of $4 million at December 31, 2024.

Shareholders’ equity at June 30, 2025 also included an unrealized foreign currency translation loss of $4.3 billion, compared with an unrealized foreign currency

translation loss of $5.0 billion at December 31, 2024.

The annualized return on average shareholders’ equity in the second quarter of 2025 was 9.0%.

Shareholders’ equity excluding accumulated other comprehensive income (AOCI) (2) (adjusted book value) was $27.7 billion, or $51.78 per share, at June 30, 2025, compared with $29.1 billion, or $52.87 per share, at December 31, 2024.

Adjusted book value excluding foreign currency remeasurement (2) was $23.6 billion, or $44.17 per share, at June 30, 2025, compared with $23.4 billion, or $42.46 per share, at December 31, 2024.

The annualized adjusted return on equity (ROE) excluding foreign currency remeasurement (2) in the second quarter of 2025 was 16.4%.

In the first nine months of 2025, Aflac Incorporated repurchased $2.7 billion, or 25.7 million of its common shares.

At September 30, 2025, the Company had 121.6 million remaining shares authorized for repurchase.

Shareholders’ equity was $28.7 billion, or $54.57 per share, at September 30, 2025, compared with $26.1 billion, or $47.45 per share, at December 31, 2024.

Shareholders’ equity at September 30, 2025 included a cumulative increase of $6.8 billion from the effect of changes in discount rate assumptions on insurance reserves, compared with a corresponding cumulative increase of $2.0 billion at December 31, 2024, and a net unrealized loss on investment securities and derivatives of $1.7 billion, compared with a net unrealized gain of $4 million at December 31, 2024.

Shareholders’ equity at September 30, 2025 also included an unrealized foreign currency translation loss of $4.5 billion,

compared with an unrealized foreign currency translation loss of $5.0 billion at December 31, 2024.

The annualized return on average shareholders’ equity in the third quarter of 2025 was 23.5%.

Shareholders’ equity excluding accumulated other comprehensive income (AOCI) (2) (adjusted book value) was $28.0 billion, or $53.33 per share, at September 30, 2025, compared with $29.1 billion, or $52.87 per share, at December 31, 2024.

Adjusted book value excluding foreign currency remeasurement (2) was $24.4 billion, or $46.35 per share, at September 30, 2025, compared with $23.4 billion, or $42.46 per share, at December 31, 2024.

The annualized adjusted return on equity (ROE) excluding foreign currency remeasurement (2) in the third quarter of 2025 was 22.1%.

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 engaged leading third-party cybersecurity experts to support the Company’s response to the incident.

As previously disclosed , the Company identified an incident involving unauthorized access to its network in the U.S.

on June 12, 2025.

The Company promptly initiated its cybersecurity incident response protocols and continues to believe it contained the intrusion within hours.

The Company's systems were not affected by ransomware, and the Company continues to serve its policyholders and underwrite policies, review claims, and otherwise service customers as usual.

The Company also remains engaged with leading third-party cybersecurity experts to support the Company’s response to the incident.

The Company is aware of the exfiltration of certain data including claims information, health information, social security numbers and/or other personal information relating to a substantial number of customers, beneficiaries, employees, agents, and other individuals in the Company’s U.S.

93 unchanged sentences

In Millions Per Diluted Share In Millions Per Diluted Share

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024 2025 2024 2025 2024

16 unchanged sentences

Reconciliation of Net Investment (Gains) Losses to Adjusted Net Investment (Gains) Losses

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

26 unchanged sentences

• foreign currency forwards and options used to economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's long term exposure to a weakening yen;

• foreign currency swaps used to hedge the foreign currency exchange risk associated with certain investments denominated in other foreign currencies in Aflac Japan's portfolio;

• cross-currency swaps, also referred to as foreign currency swaps, associated with certain senior notes and subordinated debentures;

37 unchanged sentences

however, the yen strengthened against the U.S.

dollar during the first six months of 2025.

dollar during the first nine months of 2025.

Although the Company is unable to predict the timing or extent of future movements of the Japanese yen/U.S.

3 unchanged sentences

The Company's combined U.S.

and Japanese effective income tax rate on pretax earnings was 27.0% for the three-month period ended June 30, 2025, compared with 13.1% for the same period in 2024.

and Japanese effective income tax rate on pretax earnings was 17.8% for the three-month period ended September 30, 2025, compared with 201.8% for the same period in 2024.

The Company's combined U.S.

and Japanese effective income tax rate on pretax earnings was 35.0% for the six-month period ended June 30, 2025, compared with 13.3% for the same period in 2024.

and Japanese effective income tax rate on pretax earnings was 23.4% for the nine-month period ended September 30, 2025, compared with 17.3% for the same period in 2024.

The combined effective tax rate differs from the U.S.

11 unchanged sentences

GAAP financial measures of book value and book value per diluted share, respectively.

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

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

2025 December 31,

27 unchanged sentences

GAAP financial measure of return on equity.

Three Months Ended June 30,

Three Months Ended September 30,

GAAP return on equity - net earnings (1)

23.5 % (1.5) %

Impact of excluding unrealized foreign currency translation gains (losses) (5.4) .3

41 unchanged sentences

In Dollars In Yen

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

Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,

(In millions of dollars and billions of yen) 2025 2024 2025 2024 2025 2024 2025 2024

28 unchanged sentences

Pretax adjusted earnings 13.3 23.5 (.7) 10.8 13.1 25.5 (2.4) 20.3

(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.

(2) Net interest income/expense from derivatives associated with certain investment strategies of $(59) and $(79) for the three-month periods and $(117) and $(158) for the six-month periods ended June 30, 2025 and 2024, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended June 30, 2025, operating results in yen terms compared to the same period in the previous year were as follows:

(1) Includes a gain (loss) of $(55) and $(75) for the three-month periods and $(55) and $(80) for the nine-month periods ended September 30, 2025 and 2024, respectively, related to remeasurement of the deferred profit liability for limited-payment contracts.

(2) Net interest income/expense from derivatives associated with certain investment strategies of $(59) and $(79) for the three-month periods and $(176) and $(237) for the nine-month periods ended September 30, 2025 and 2024, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended September 30, 2025, operating results in yen terms compared to the same period in the previous year were as follows:

• Net earned premiums decreased primarily due to approximately ¥7 billion related to the internal cancer reinsurance transaction with Aflac Re established in the fourth quarter of 2024 and approximately ¥4 billion from limited-pay products reaching premium paid-up status.

• Adjusted net investment income decreased primarily due to lower floating rate income and the impact of yen strengthening on U.S.

dollar investments.

• Total adjusted revenues decreased primarily due to the decreases in net earned premiums and adjusted net investment income.

• Total benefits and claims decreased primarily due to the impacts of assumption updates performed in the third quarter of 2024 and the internal reinsurance transaction with Aflac Re established in the fourth quarter of 2024.

• Total adjusted expenses increased primarily due to an increase in technology expenses, partially offset by the impact of the internal reinsurance transaction with Aflac Re established in the fourth quarter of 2024.

• Pretax adjusted earnings decreased primarily due to the decrease in total adjusted revenue, partially offset by the decrease in total benefits and claims.

For the six-month period ended June 30, 2025, operating results in yen terms compared to the same period in the previous year were as follows:

Net earned premiums also reflect a remeasurement loss of approximately ¥8 billion related to assumption updates of the deferred profit liability for limited-payment contracts in the third quarter of 2025, compared to a loss of approximately ¥11 billion in 2024.

• Adjusted net investment income was relatively flat.

• Total adjusted revenues decreased primarily due to the decrease in net earned premiums.

• Total benefits and claims decreased primarily due to approximately ¥68 billion of reserve remeasurement gains related to assumption updates in the third quarter of 2025, compared to reserve remeasurement gains of approximately ¥50 billion in the third quarter of 2024, as well as the internal cancer reinsurance transaction with Aflac Re established in the fourth quarter of 2024.

• Total adjusted expenses decreased primarily due to the impact of the internal cancer reinsurance transaction with Aflac Re established in the fourth quarter of 2024 and an increase in the capitalization of deferred policy acquisition costs resulting from higher sales.

• Pretax adjusted earnings increased primarily due to the decrease in total benefits and claims, partially offset by the decrease in total adjusted revenues.

For the nine-month period ended September 30, 2025, operating results in yen terms compared to the same period in the previous year were as follows:

• Net earned premiums decreased primarily due to approximately ¥21 billion related to the internal cancer reinsurance transaction with Aflac Re established in the fourth quarter of 2024 and approximately ¥11 billion from limited-pay products reaching premium paid-up status.

• Adjusted net investment income decreased primarily due to lower floating rate income.

• Total adjusted revenues decreased primarily due to the decreases in net earned premiums and adjusted net investment income.

• Total benefits and claims decreased primarily due to the the impacts of assumption updates performed in the third quarter of 2024 and the internal reinsurance transaction with Aflac Re established in the fourth quarter of 2024.

• Pretax adjusted earnings decreased primarily due to the decrease in total adjusted revenue, partially offset by the decrease in total benefits and claims.

Annualized premiums in force decreased 2.3% to ¥1.19 trillion as of June 30, 2025, compared with ¥1.22 trillion as of June 30, 2024.

• Total adjusted expenses increased primarily due to an increase in technology expenses, partially offset by the impact of the internal cancer reinsurance transaction with Aflac Re established in the fourth quarter of 2024.

• Pretax adjusted earnings decreased primarily due to the decrease in total adjusted revenues, partially offset by the decrease in total benefits and claims.

Annualized premiums in force decreased 2.5% to ¥1.19 trillion as of September 30, 2025, compared with ¥1.22 trillion as of September 30, 2024.

The decrease in annualized premiums in force in yen was driven primarily by limited-pay products reaching premium paid-up status.

Annualized premiums in force, translated into dollars at respective period-end exchange rates, were $8.2 billion at June 30, 2025, compared with $7.6 billion at June 30, 2024.

As of June 30, 2025, Aflac Japan exceeded 22 million individual policies in force in Japan, with approximately 14 million cancer policies in force in Japan.

Annualized premiums in force, translated into dollars at respective period-end exchange rates, were $8.0 billion at September 30, 2025, compared with $8.5 billion at September 30, 2024.

As of September 30, 2025, Aflac Japan exceeded 22 million individual policies in force in Japan, with approximately 14 million cancer policies in force in Japan.

Aflac Japan's investment portfolios include U.S.

6 unchanged sentences

dollar-denominated investment income and related items into yen by comparing certain segment results with those that would have been reported had foreign currency exchange rates remained unchanged from the comparable period in the prior year.

Amounts excluding foreign currency impact on U.S.

Amounts excluding foreign

currency impact on U.S.

dollar-denominated investment income were determined using the average foreign currency exchange rate for the comparable prior year period.

2 unchanged sentences

(Yen Operating Results)

For the Periods Ended June 30,

For the Periods Ended September 30,

Including Foreign

1 unchanged sentence

Currency Changes

Three Months Six Months

Three Months Nine Months

2025 2024 2025 2024 2025 2024 2025 2024

3 unchanged sentences

The following table presents a summary of operating ratios in yen terms for Aflac Japan followed by a discussion of the significant drivers of changes in operating ratios in yen compared to the same periods in the previous year.

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

Three Months Ended September 30, Nine Months Ended September 30,

Ratios to total adjusted revenues:

11 unchanged sentences

Amortization of deferred policy acquisition costs 4.9 4.8 4.8 4.6

• For the three- and six-month periods ended June 30, 2025, the total benefits and claims to total premiums ratio decreased primarily due to lower benefits following assumption updates in the third quarter of 2024.

Internal reinsurance activity increased this ratio overall by reducing the total of both benefits and claims and net earned premiums, with a greater proportional impact on net earned premiums.

The decrease in net earned premiums was also affected by limited-pay products reaching premium paid-up status.

• For the three- and six-month periods ended June 30, 2025, the total adjusted expense ratio increased primarily due to an increase in technology expenses.

• In total, the pretax adjusted profit margin decreased in the three- and six-month periods ended June 30, 2025 primarily due to the decrease in total adjusted revenues, partially offset by the decrease in total benefits and claims.

The following table presents Aflac Japan's premium persistency on a 12-month rolling basis as of June 30.

• For the three- and nine-month periods ended September 30, 2025, the total benefits and claims to total premiums ratio decreased primarily due to lower benefits following assumption updates in the third quarter of 2025.

For the full year of 2025, the Company expects Aflac Japan to generate a benefit ratio in the range of 58% to 60% as a result of the impact from assumption updates in the third quarter of 2025.

• For the three-month period ended September 30, 2025, the total adjusted expense ratio decreased primarily due to the decrease in total adjusted expenses associated with reinsurance activity and an increase in the capitalization of deferred policy acquisition costs resulting from higher sales.

For the nine-month period ended September 30, 2025, the total adjusted expense ratio increased primarily due to an increase in technology expenses.

• In total, the pretax adjusted profit margin increased in the three- and nine-month periods ended September 30, 2025 primarily due to the lower benefit ratio.

The following table presents Aflac Japan's premium persistency on a 12-month rolling basis as of September 30.

Premium persistency 93.3 % 93.3 %

Aflac Japan Sales

The following table presents Aflac Japan’s new annualized premium sales for the periods ended June 30.

The following table presents Aflac Japan’s new annualized premium sales for the periods ended September 30.

In Dollars In Yen

Three Months Six Months

Three Months Nine Months

(In millions of dollars and billions of yen) 2025 2024 2025 2024 2025 2024 2025 2024

1 unchanged sentence

Increase (decrease) over prior period 13.5 % 8.6 % 19.4 % (4.8) % 11.8 % 12.3 % 16.1 % 4.4 %

The increase in new annualized premium sales on a yen basis in the second quarter and first six months of 2025 was driven primarily by strong sales of the new cancer insurance product, Miraito , that was launched in certain sales channels in mid-March 2025 and available in all sales channels starting in the second quarter of 2025 as well as sales of Tsumitasu for the first six months of 2025.

The following table details the contributions to Aflac Japan's new annualized premium sales by major insurance product for the periods ended June 30.

Three Months Six Months

The increase in new annualized premium sales on a yen basis in the third quarter and first nine months of 2025 was driven primarily by continued strong sales of the new cancer insurance product, Miraito , that was launched in certain sales channels in mid-March 2025 and available in all sales channels starting in the second quarter of 2025 as well as sales of Tsumitasu for the first nine months of 2025.

The following table details the contributions to Aflac Japan's new annualized premium sales by major insurance product for the periods ended September 30.

Three Months Nine Months

2025 2024 2025 2024

14 unchanged sentences

Further, Aflac Japan continues to utilize its virtual sales tool that enables online consultations and policy applications to be completed entirely online.

The following table details the contributions to Aflac Japan's new annualized premium sales by agency type for the three-month periods ended June 30.

The following table details the contributions to Aflac Japan's new annualized premium sales by agency type for the three-month periods ended September 30.

Independent corporate and individual 45.1 % 46.2 %

2 unchanged sentences

(1) Includes Japan Post Group, Dai-ichi Life and Daido Life

During the three-month period ended June 30, 2025, Aflac Japan recruited 76 new sales agencies.

At June 30, 2025, Aflac Japan was represented by approximately 6,400 sales agencies, with approximately 111,000 licensed sales associates employed by those agencies.

During the three-month period ended September 30, 2025, Aflac Japan recruited 73 new sales agencies.

At September 30, 2025, Aflac Japan was represented by more than 6,300 sales agencies, with approximately 112,000 licensed sales associates employed by those agencies.

The number of sales agencies has declined in recent years due to Aflac Japan's focus on supporting agencies with strong management frameworks, high productivity and more producing agents.

At June 30, 2025, Aflac Japan had agreements to sell its products at 358 banks, approximately 90% of the total number of banks in Japan.

At September 30, 2025, Aflac Japan had agreements to sell its products at 358 banks, approximately 90% of the total number of banks in Japan.

Aflac Japan Investments

10 unchanged sentences

The following table details the investment purchases for Aflac Japan.

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

12 unchanged sentences

Collateralized loan obligations 0 0 74 30

Equity securities 1 0 1 0

Commercial mortgage and other loans:

15 unchanged sentences

See the Investments section of this MD&A for further discussion of these investment programs, and see Notes 3 and 4 of the Notes to the Consolidated Financial Statements and Notes 1, 3 and 4 of the Notes to the Consolidated Financial Statements in the 2024 Annual Report for more information regarding loans and loan receivables.

The following table presents the results of Aflac Japan’s investment yields for the periods ended June 30.

Three Months Six Months

The following table presents the results of Aflac Japan’s investment yields for the periods ended September 30.

Three Months Nine Months

2025 2024 2025 2024

12 unchanged sentences

(3) Net of investment expenses and amortized hedge costs, year-to-date number reflected on a quarterly average basis

The decrease in the Aflac Japan new money yield in the three-month period ended June 30, 2025 was primarily due to lower short-term rates on floating rate assets.

The decrease in the Aflac Japan new money yield in the six-month period ended June 30, 2025 was primarily due to lower allocations to higher yielding asset classes.

The decrease in the Aflac Japan new money yield in the three- and nine-month periods ended September 30, 2025 was primarily due to lower allocations to higher yielding asset classes.

See Notes 3, 4 and 5 of the Notes to the Consolidated Financial Statements and the Investments and Hedging Activities sections of this MD&A for additional information on the Company's investments and hedging strategies.

4 unchanged sentences

Summary of Operating Results

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

22 unchanged sentences

Pretax adjusted earnings 7.1 (26.8) 2.9 (9.2)

(1) Net interest income/expense from derivatives associated with certain investment strategies of $(6) and $(9) for the three-month periods and $(12) and $(19) for the six-month periods ended June 30, 2025 and 2024, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month periods ended June 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to higher net earned premiums from growth initiatives including group life and disability and consumer markets businesses.

• Adjusted net investment income decreased primarily due to lower floating rate income.

• Total adjusted revenues increased primarily due to the increase in net earned premiums, partially offset by the decrease in adjusted net investment income.

• Total benefits and claims increased primarily due to higher incurred claims.

• Total adjusted expenses increased primarily due to higher deferred policy acquisition cost amortization and other expenses associated with the corresponding growth in net earned premiums.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues, mostly offset by the increases in total benefits and claims and total adjusted expenses.

For the six-month periods ended June 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to higher net earned premiums from growth initiatives including group life and disability and consumer markets businesses.

(1) Net interest income/expense from derivatives associated with certain investment strategies of $(7) and $(9) for the three-month periods and $(19) and $(28) for the nine-month periods ended September 30, 2025 and 2024, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

For the three-month period ended September 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to improved sales.

• Adjusted net investment income increased primarily due to higher variable net investment income.

• Total adjusted revenues increased primarily due to the increase in net earned premiums.

• Total benefits and claims decreased primarily due to $60 million of reserve remeasurement gains related to assumption updates in the third quarter of 2025, compared to reserve remeasurement gains of $11 million in the third quarter of 2024, partially offset by higher incurred claims.

• Total adjusted expenses increased primarily due to one-time technology-related expense and higher deferred policy acquisition cost amortization.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues and the decrease in total benefits and claims, partially offset by the increase in total adjusted expenses.

For the nine-month period ended September 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums increased primarily due to improved sales.

• Adjusted net investment income decreased primarily due to lower floating rate income.

• Total adjusted revenues increased primarily due to the increase in net earned premiums, partially offset by the decrease in adjusted net investment income.

• Total benefits and claims increased primarily due to higher incurred claims and lower reserve remeasurement gains reflecting actual experience.

• Total adjusted expenses decreased primarily due to improved expense efficiency.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues, mostly offset by the increase in total benefits and claims.

Annualized premiums in force increased 4.3% to $6.5 billion at June 30, 2025, compared with $6.2 billion at June 30, 2024.

• Total benefits and claims increased primarily due to higher incurred claims partially offset by $60 million of reserve remeasurement gains related to assumption updates in the third quarter of 2025, compared to reserve remeasurement gains of $11 million in the third quarter of 2024.

• Total adjusted expenses increased primarily due to one-time technology-related expense and higher deferred policy acquisition cost amortization.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues, partially offset by the increases in total benefits and claims and total adjusted expenses.

Annualized premiums in force increased 3.8% to $6.5 billion at September 30, 2025, compared with $6.3 billion at September 30, 2024.

The following table presents a summary of operating ratios for Aflac U.S.

followed by a discussion of the significant drivers of changes in operating ratios compared to the same periods in the previous year.

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

Three Months Ended September 30, Nine Months Ended September 30,

Ratios to total adjusted revenues:

11 unchanged sentences

Amortization of deferred policy acquisition costs 9.2 9.0 9.1 9.0

• For the three- and six-month periods ended June 30, 2025, the total benefits and claims to total premiums ratio increased primarily due to higher incurred claims.

• The total adjusted expense ratio decreased in the three- and six-month periods ended June 30, 2025 primarily due to expense efficiency efforts.

• In total, the pretax adjusted profit margin decreased in the three- and six-month periods ended June 30, 2025, primarily due to the increase in total benefits and claims.

• For the three-month period ended September 30, 2025, the total benefits and claims to total premiums ratio decreased primarily due to reserve remeasurement gains related to assumption updates in the third quarter of 2025.

For the nine-month period ended September 30, 2025, the total benefits and claims to total premiums ratio was flat.

• For the three-month period ended September 30, 2025, the total adjusted expense ratio increased primarily due to one-time technology-related expenses.

The total adjusted expense ratio decreased in the nine-month period ended September 30, 2025 primarily due to expense efficiency efforts.

• In total, the pretax adjusted profit margin increased in the three-month period ended September 30, 2025, primarily due to the lower benefit ratio.

The pretax adjusted profit margin increased in the nine-month period ended September 30, 2025 primarily due to the lower total adjusted expense ratio.

The following table presents premium persistency for Aflac U.S.

on a 12-month rolling basis as of June 30.

on a 12-month rolling basis as of September 30.

Premium persistency 79.0 % 78.9 %

The following table presents Aflac's U.S.

new annualized premium sales for the periods ended June 30.

Three Months Six Months

new annualized premium sales for the periods ended September 30.

Three Months Nine Months

(In millions) 2025 2024 2025 2024

2 unchanged sentences

The increase in new annualized premium sales for Aflac U.S.

in the second quarter and first six months of 2025 was primarily driven by sales of group products.

in the third quarter and first nine months of 2025 was primarily driven by sales of group products.

The following table details the contributions to Aflac's U.S.

new annualized premium sales by major insurance product category for the periods ended June 30.

Three Months Six Months

new annualized premium sales by major insurance product category for the periods ended September 30.

Three Months Nine Months

2025 2024 2025 2024

8 unchanged sentences

(1) Includes cancer, critical illness, and hospital intensive care products

In the second quarter of 2025, the Aflac U.S.

In the third quarter of 2025, the Aflac U.S.

sales force included an average of approximately 5,200 U.S.

6 unchanged sentences

The following table details the investment purchases for Aflac U.S.

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

19 unchanged sentences

The following table presents the results of Aflac's U.S.

investment yields for the periods ended June 30.

Three Months Six Months

investment yields for the periods ended September 30.

Three Months Nine Months

2025 2024 2025 2024

11 unchanged sentences

(3) Net of investment expenses, year-to-date number reflected on a quarterly average basis

The increase in the Aflac U.S.

new money yield in the three-month period ended September 30, 2025 was primarily due to higher long-term rates and a larger allocation to higher yielding asset classes.

The decrease in the Aflac U.S.

new money yield in the three- and six-month periods ended June 30, 2025 was primarily due to lower short-term rates on floating rate assets.

new money yield in the nine-month period ended September 30, 2025 was primarily due to lower short-term rates on floating rate assets.

See Notes 3 and 5 of the Notes to the Consolidated Financial Statements and the Investments section of this MD&A for additional information on the Company's investments.

3 unchanged sentences

Corporate and Other Summary of Operating Results

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

23 unchanged sentences

Pretax adjusted earnings 360.0 130.6 266.7 133.6

(1) 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.

(1) The change in value of federal historic rehabilitation and solar investments in partnerships of $6 and $57 for the three-month periods and $22 and $119 for the nine-month periods ended September 30, 2025 and 2024, respectively, is included as a reduction to net investment income.

Tax credits on these investments of $7 and $78 for the three-month periods and $24 and $142 for the nine-month periods ended September 30, 2025 and 2024, respectively, have been recorded as an income tax benefit in the consolidated statements of earnings.

See Note 3 of the Notes to the Consolidated Financial Statements for additional information on these investments.

For the three-month period ended June 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims increased primarily due to higher internal reinsurance activity resulting from the agreement established in the fourth quarter of 2024.

For the three-month period ended September 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims increased primarily due to higher internal reinsurance activity resulting from the transaction established in the fourth quarter of 2024.

The increase in total benefits and claims was partially offset by $31 million of reserve remeasurement gains related to assumption updates in the third quarter of 2025, compared to reserve remeasurement gains of $20 million in the third quarter of 2024.

• Adjusted net investment income increased primarily due to $51 million from a lower volume of federal historic rehabilitation and solar tax credit investments, with offsetting tax benefits recognized as a corresponding lower income tax expense, and higher Aflac Re consolidated investment income of $11 million from a higher volume of assets as part of the reinsurance agreement established in the fourth quarter of 2024.

• Total adjusted revenues increased primarily due to higher net earned premiums and adjusted net investment income.

• Total adjusted expenses increased primarily due to $30 million from higher costs pertaining to business operations, including costs to date to investigate and respond to the cybersecurity incident and legal and other professional services related thereto, $15 million associated with internal reinsurance activity and higher interest expense of $13 million.

• Pretax adjusted earnings decreased primarily due to higher total adjusted revenues partially offset by higher total benefits and adjusted expenses.

For the six-month period ended June 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims increased primarily due to higher internal reinsurance activity resulting from the agreement established in the fourth quarter of 2024.

• Total adjusted revenues increased primarily due to the increases in adjusted net investment income and net earned premiums.

• Total adjusted expenses increased primarily due to $16 million associated with internal reinsurance activity, higher interest expense of $16 million, and $7 million from higher costs pertaining to business operations, including costs

related to the ongoing investigation of and response to the cybersecurity incident and legal and other professional services related thereto.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues, partially offset by the increase in total benefits and adjusted expenses.

For the nine-month period ended September 30, 2025, operating results compared to the same period in the previous year were as follows:

• Net earned premiums and total benefits and claims increased primarily due to higher internal reinsurance activity resulting from the transaction established in the fourth quarter of 2024.

• Adjusted net investment income increased primarily due to $97 million from a lower volume of federal historic rehabilitation and solar tax credit investments, with offsetting tax benefits recognized as a corresponding lower income tax expense, and higher Aflac Re consolidated investment income of $35 million from a higher volume of assets as part of the reinsurance agreement established in the fourth quarter of 2024.

• Total adjusted revenues increased primarily due to higher adjusted net investment income and net earned premiums.

• Total adjusted expenses increased primarily due to $29 million from higher costs pertaining to business operations, including costs to date to investigate and respond to the cybersecurity incident and legal and other professional services related thereto, $23 million associated with internal reinsurance activity and higher interest expense of $22 million.

• Pretax adjusted earnings increased primarily due to higher total adjusted revenues partially offset by higher total benefits and adjusted expenses.

• Total adjusted revenues increased primarily due to the increases in adjusted net investment income and net earned premiums.

• Total adjusted expenses increased primarily due to $39 million associated with internal reinsurance activity, higher interest expense of $38 million, and $34 million from higher costs pertaining to business operations, including costs related to the ongoing investigation of and response to the cybersecurity incident and legal and other professional services related thereto.

• Pretax adjusted earnings increased primarily due to the increase in total adjusted revenues, partially offset by the increase in total benefits and adjusted expenses.

The Parent Company invests in partnerships that specialize in rehabilitating historic structures or the installation of solar equipment in order to receive federal historic rehabilitation and solar tax credits.

12 unchanged sentences

Investment Securities by Segment

June 30, 2025

September 30, 2025

(In millions) Aflac Japan Aflac U.S.

65 unchanged sentences

Properties acquired by the Company through foreclosure and deed in lieu of foreclosure are reported as real estate owned (REO) in other investments in the Company's consolidated balance sheets.

In the six-month period ended June 30, 2025, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $257 million.

As a result of the amortized cost of the TREs exceeding the estimated fair value of the collateral upon consummating the foreclosures or deed in lieu of foreclosure transactions, the Company recognized a net loss of $10 million in net investment gains (losses) for the six-month period ended June 30, 2025.

In the six-month period ended June 30, 2024, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $282 million.

As a result of the estimated fair value of the collateral exceeding the amortized cost of the TREs upon consummating the foreclosures or deed in lieu of foreclosure transactions, the Company recognized a net gain of $13 million in net investment gains (losses) for the six-month period ended June 30, 2024.

In the nine-month period ended September 30, 2025, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $257 million.

In the nine-month period ended September 30, 2024, the Company completed foreclosure or deed in lieu of foreclosure on TREs collateralized with commercial real estate properties with an amortized cost of $407 million.

As a result of the amortized cost of the TREs exceeding the estimated fair value of the collateral upon consummating the foreclosures or deed in lieu of foreclosure transactions, the Company recognized a net loss of $27 million in net investment gains (losses) for the nine-month period ended September 30, 2024.

The Company utilizes third-party asset managers to source, underwrite and manage each loan, as well as any resulting REO.

9 unchanged sentences

Composition of Fixed Maturity Securities by Credit Rating

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Value Amortized

5 unchanged sentences

Total 100.0 % 100.0 % 100.0 % 100.0 %

As of June 30, 2025, the Company's direct and indirect exposure to securities in its investment portfolio that were guaranteed by third parties was immaterial both individually and in the aggregate.

The following table presents the 10 largest unrealized loss positions in the Company's portfolio as of June 30, 2025.

As of September 30, 2025, the Company's direct and indirect exposure to securities in its investment portfolio that were guaranteed by third parties was immaterial both individually and in the aggregate.

The following table presents the 10 largest unrealized loss positions in the Company's portfolio as of September 30, 2025.

(In millions) Credit

3 unchanged sentences

Urban Renaissance Agency A+ 164 102 (62)

Thames Water Utility CCC- 138 99 (39)

KLM Royal Dutch Airlines B+ 134 93 (41)

JP Morgan Chase and Co.

A+ 203 165 (38)

KLM Royal Dutch Airlines B+ 138 99 (39)

Tokyo Gas Co Ltd A+ 104 73 (31)

Thames Water Utility CCC- 134 97 (37)

Mitsubishi Estate Co Ltd.

A 134 101 (33)

West Japan Railway Company A+ 91 62 (29)

Tokyo Gas Co Ltd A+ 101 69 (32)

Prologis LP A 152 120 (32)

West Japan Railway Company A+ 107 77 (30)

SNCF Reseau AA- 73 44 (29)

6 unchanged sentences

Below-Investment-Grade Investments

June 30, 2025

September 30, 2025

(In millions) Par

8 unchanged sentences

IKB Deutsche Industriebank AG 87 48 74 26

Generalitat de Catalunya 55 24 53 29

Amarok Parent LLC 25 24 25 1

CPI Property Group SA 20 20 19 (1)

Tralka Spa (Chadwick) 18 19 17 (2)

Other Issuers 34 36 33 (3)

15 unchanged sentences

The following table shows the distribution of fixed maturities by sector classification.

June 30, 2025

September 30, 2025

(In millions) Amortized

28 unchanged sentences

Investment Securities by Type of Issuance

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(In millions) Amortized

15 unchanged sentences

Reverse Dual-Currency Securities (1)

(Amortized cost, in millions) June 30,

(Amortized cost, in millions) September 30,

2025 December 31,

29 unchanged sentences

Dollar-Denominated Hedge Program below).

• Aflac Japan uses foreign currency swaps to economically hedge the foreign exchange rate risk on certain of its investments that are denominated in other foreign currencies.

• The Parent Company designates yen-denominated liabilities (notes payable and loans) as non-derivative hedging instruments and designates certain foreign currency forwards and options as derivative hedges of the Company’s net investment in Aflac Japan ( see Enterprise Corporate Hedging Program below) .

1 unchanged sentence

The following table presents metrics related to Aflac Japan's U.S.

dollar-denominated hedge program and the Parent Company's enterprise corporate hedging program, including associated amortized hedge costs/income, for the periods ended June 30.

dollar-denominated hedge program and the Parent Company's enterprise corporate hedging program, including associated amortized hedge costs/income, for the periods ended September 30.

See the Results of Operations section of this MD&A for the Company's definition of amortized hedge costs/income.

Three Months Six Months

Three Months Nine Months

2025 2024 2025 2024

26 unchanged sentences

dollar-denominated investments held by Aflac Japan.

September 30,

2025 December 31,

22 unchanged sentences

Dollar Program to mitigate against more extreme moves in foreign exchange and therefore support SMR.

As of June 30, 2025, none of the Company's foreign currency options hedging Aflac Japan's U.S.

As of September 30, 2025, none of the Company's foreign currency options hedging Aflac Japan's U.S.

dollar-denominated assets were in-the-money.

2 unchanged sentences

dollar-denominated investments.

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

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2025 2024 2025 2024

Net cash inflows (outflows) $ (23) $ (8) $ (39) $ (423)

In addition to the U.S.

Dollar Program, Aflac Japan also utilizes foreign currency swaps to economically hedge the foreign exchange rate risk on certain investments denominated in other foreign currencies.

As of September 30, 2025, the Company had foreign currency swaps on other foreign currency-denominated investments with a fair value of $48 million.

Enterprise Corporate Hedging Program

The Company has designated certain yen-denominated liabilities and foreign currency forwards and options of the Parent Company as accounting hedges of its net investment in Aflac Japan.

The Company's consolidated yen-denominated net asset position was partially hedged at $7.4 billion as of June 30, 2025, with hedging instruments comprised of $5.5 billion of yen-denominated debt and $1.9 billion of foreign currency forwards, compared with $5.9 billion as of December 31, 2024, with hedging instruments comprised of $4.1 billion of yen-denominated debt and $1.8 billion of foreign currency forwards .

The Company's consolidated yen-denominated net asset position was partially hedged at $7.1 billion as of September 30, 2025, with hedging instruments comprised of $5.3 billion of yen-denominated debt and $1.8 billion of foreign currency forwards, compared with $5.9 billion as of December 31, 2024, with hedging instruments comprised of $4.1 billion of yen-denominated debt and $1.8 billion of foreign currency forwards .

The Company makes its accounting designation of net investment hedge at the beginning of each quarter.

If the total of the designated Parent Company non-derivative and derivative notional is equal to or less than the Company's net investment in Aflac Japan, the hedge is deemed to be effective, and the currency exchange effect on the yen-denominated liabilities and the change in estimated fair value of the derivatives are reported in the unrealized foreign currency component of other comprehensive income.

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

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

For additional information on the Company's net investment hedging strategy, see Note 4 of the Notes to the Consolidated Financial Statements.

1 unchanged sentence

By buying U.S.

selling yen, the Parent Company is effectively lowering its overall economic exposure to the yen.

dollars and selling yen, the Parent Company is effectively lowering its overall economic exposure to the yen.

In addition to reducing yen exposure from dividend payments by Aflac Japan to the Parent Company, this strategy also reduces enterprise-wide hedge costs.

13 unchanged sentences

The following table presents deferred policy acquisition costs (DAC) by segment.

(In millions) June 30,

(In millions) September 30,

2025 December 31,

3 unchanged sentences

Total $ 9,216 $ 8,758 5.2 %

(1) Aflac Japan’s deferred policy acquisition costs increased .7% in yen during the six months ended June 30, 2025.

(1) Aflac Japan’s deferred policy acquisition costs increased 1.9% in yen during the nine months ended September 30, 2025.

See Note 6 of the Notes to the Consolidated Financial Statements for additional information on the Company's deferred policy acquisition costs.

1 unchanged sentence

The following table presents policy liabilities by segment.

(In millions) June 30,

(In millions) September 30,

2025 December 31,

6 unchanged sentences

Total $ 74,737 $ 77,508 (3.6) %

(1) Aflac Japan’s policy liabilities decreased 6.7% in yen during the six months ended June 30, 2025.

(1) Aflac Japan’s policy liabilities decreased 10.2% in yen during the nine months ended September 30, 2025.

(2) Elimination entry necessary due to the internal reinsurance transactions with Aflac Re and to recapture of a portion of policy liabilities ceded externally as a result of the reinsurance retrocession transaction.

13 unchanged sentences

As a result, additional contributions are not expected to be required unless the balance is reduced due to payments made by the LIPPC to the policyholders of insolvent insurers.

Accordingly, Aflac Japan did not recognize an expense for LIPPC assessments for the six-month periods ended June 30, 2025 and June 30, 2024.

Accordingly, Aflac Japan did not recognize an expense for LIPPC assessments for the nine-month periods ended September 30, 2025 and September 30, 2024.

Guaranty Fund Assessments

1 unchanged sentence

The amount of the guaranty fund assessment that an insurer is assessed is based on its proportionate share of premiums in that state.

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

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

LIQUIDITY AND CAPITAL RESOURCES

13 unchanged sentences

The Company remains committed to prudent liquidity and capital management.

At June 30, 2025, the Company held $7.0 billion in cash and cash equivalents for stress conditions, which includes the Parent Company's target minimum amount of $1.8 billion.

At September 30, 2025, the Company held $6.8 billion in cash and cash equivalents for stress conditions, which includes the Parent Company's target minimum amount of $1.8 billion.

Aflac Japan and Aflac U.S.

1 unchanged sentence

The primary uses of cash by the Parent Company are shareholder dividends, the repurchase of its common stock, interest on its outstanding indebtedness and operating expenses.

The following table presents the amounts provided to the Parent Company for the six-month periods ended June 30.

The following table presents the amounts provided to the Parent Company for the nine-month periods ended September 30.

Liquidity Provided by Subsidiaries to Parent Company

2 unchanged sentences

Dividends declared or paid by subsidiaries 3,058 2,559

The following table details Aflac Japan remittances, which are included in the totals above, for the six-month periods ended June 30.

The following table details Aflac Japan remittances, which are included in the totals above, for the nine-month periods ended September 30.

Aflac Japan Remittances

11 unchanged sentences

In addition to cash and cash equivalents, the Company also maintains credit facilities, both intercompany and with external partners, and a number of other available tools to support liquidity needs on a global basis.

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

In August 2025, the Parent Company expanded its sources of liquidity by entering into two separate facility agreements, as follows:

A 10-year facility agreement with a Delaware trust (2035 Trust) that provides the Parent Company with the right to issue and sell to the 2035 Trust from time to time up to $1.0 billion of senior notes due August 2035.

A 30-year facility agreement with a Delaware trust (2055 Trust) that provides the Parent Company the right to issue and sell to the 2055 Trust from time to time up to $1.0 billion of senior notes due August 2055.

As of September 30, 2025, the Parent Company had no senior note issuances under these facility agreements.

For additional information, see Note 9 of the Notes to the Consolidated Financial Statements.

In September 2024, the Parent Company filed a shelf registration statement with the SEC that allows the Company to issue an indefinite amount of debt securities, in one or more series, from time to time until September 2027.

The Company believes outside sources for additional debt and equity capital, if needed, will continue to be available.

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

For additional information, see Note 9 of the Notes to the Consolidated Financial Statements.

As part of enterprise-wide capital management and optimization, the Company also utilizes the intercompany reinsurance platform to execute internal reinsurance transactions with Aflac Re.

2 unchanged sentences

The Company has not engaged in material intra-period short-term financings during the periods presented that are not otherwise reported in its balance sheet or disclosed therein.

As of June 30, 2025, the Company had no material letters of credit, standby letters of credit, guarantees or standby repurchase obligations.

As of September 30, 2025, the Company had no material letters of credit, standby letters of credit, guarantees or standby repurchase obligations.

The Company has not entered into transactions involving the transfer of financial assets with an obligation to repurchase financial assets that have been accounted for as a sale under applicable accounting standards, including securities lending transactions.

8 unchanged sentences

When the yen strengthens, translating yen into dollars causes more dollars to be reported.

The following table summarizes consolidated cash flows by activity for the six-month periods ended June 30.

The following table summarizes consolidated cash flows by activity for the nine-month periods ended September 30.

(In millions) 2025 2024

18 unchanged sentences

As part of its overall corporate strategy, the Company has committed up to $400 million to Aflac Ventures, LLC (Aflac Ventures), as opportunities emerge.

As of June 30, 2025, of the $400 million committed, approximately $294 million has been deployed.

As of September 30, 2025, of the $400 million committed, approximately $297 million has been deployed.

Aflac Ventures is a subsidiary of Aflac Global Ventures, LLC (Aflac Global Ventures) which is reported in Corporate and other.

4 unchanged sentences

obtains low-cost investment funding from FHLB supported by acceptable forms of collateral pledged by Aflac U.S.

In the first six months of 2025, Aflac U.S.

In the first nine months of 2025, Aflac U.S.

borrowed and repaid $571 million under this program.

As of June 30, 2025, Aflac U.S.

As of September 30, 2025, Aflac U.S.

had outstanding borrowings of $399 million reported in its balance sheet.

2 unchanged sentences

Cash flows from financing activities consist primarily of share repurchases, dividends to shareholders and, from time to time, debt issuances and redemptions.

In September 2025, the Parent Company extinguished ¥12.4 billion of .300% senior notes upon their maturity.

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.

14 unchanged sentences

See Note 9 of the Notes to the Consolidated Financial Statements for further information on the debt issuances discussed above.

Cash returned to shareholders through treasury stock purchases and dividends was $2.3 billion during the six-month period ended June 30, 2025, compared with $2.1 billion during the six-month period ended June 30, 2024.

The following tables present a summary of treasury stock activity during the six-month periods ended June 30.

Cash returned to shareholders through treasury stock purchases and dividends was $3.6 billion during the nine-month period ended September 30, 2025, compared with $2.9 billion during the nine-month period ended September 30, 2024.

The following tables present a summary of treasury stock activity during the nine-month periods ended September 30.

Treasury Stock Purchased

12 unchanged sentences

Number of shares issued 819 881

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.

Cash dividends paid to shareholders were $.58 per share in the second quarter of 2025, compared with $.50 per share in the second quarter of 2024.

The following table presents the dividend activity for the six-month periods ended June 30.

In August 2025, the Company's board of directors authorized the purchase of an additional 100 million shares of its common stock.

As of September 30, 2025, a remaining balance of 121.6 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors.

Cash dividends paid to shareholders were $.58 per share in the third quarter of 2025, compared with $.50 per share in the third quarter of 2024.

The following table presents the dividend activity for the nine-month periods ended September 30.

(In millions) 2025 2024

2 unchanged sentences

Total dividends to shareholders $ 939 $ 851

In August 2025, the board of directors declared the third quarter cash dividend of $.58 per share, an increase of 16.0% compared with the same period in 2024.

The dividend is payable on September 2, 2025 to shareholders of record at the close of business on August 20, 2025.

In November 2025, the board of directors declared the fourth quarter cash dividend of $.58 per share, an increase of 16.0% compared with the same period in 2024.

The dividend is payable on December 1, 2025 to shareholders of record at the close of business on November 19, 2025.

Regulatory Restrictions

5 unchanged sentences

therefore, the Company continues to evaluate alternatives for reducing this sensitivity, including the reduction of subsidiary dividends paid to the Parent Company and Parent Company capital contributions.

In the event of a rapid change in market risk conditions causing SMR to decline, the Company has a senior unsecured revolving credit facility in the amount of ¥100 billion as a capital contingency plan.

In the event of a rapid change in market risk conditions causing SMR to decline, or in the event of reduced liquidity, the Company has a senior unsecured revolving credit facility in the amount of ¥100 billion as a contingency plan.

Additionally, subject to market conditions, the Company expects that it could take action to enter into derivatives on unhedged U.S.

11 unchanged sentences

See Notes 3, 4 and 8 of the Notes to the Consolidated Financial Statements in the 2024 Annual Report for additional information on the Company's investment strategies, hedging activities, and reinsurance, respectively.

As of June 30, 2025, Aflac Japan's SMR remains high and reflects a strong capital and surplus position.

As of September 30, 2025, Aflac Japan's SMR remains high and reflects a strong capital and surplus position.

The Company is committed to maintaining strong capital levels, consistent with maintaining current insurance financial strength and credit ratings.

4 unchanged sentences

GAAP and are intended to emphasize policyholder protection and company solvency.

The continued long-term growth of the Company's business may require increases in

the statutory capital and surplus of its insurance operations.

The continued long-term growth of the Company's business may require increases in the statutory capital and surplus of its insurance operations.

The Company's insurance operations may secure additional statutory capital through various sources, such as internally generated statutory earnings, reduced dividends paid to the Parent Company, capital contributions by the Parent Company from funds generated through debt or equity offerings, or reinsurance transactions.

1 unchanged sentence

The RBC formula quantifies insurance risk, business risk, asset risk and interest rate risk by weighing the types and mixtures of risks inherent in the insurer’s operations.

As of June 30, 2025, Aflac U.S.'s combined RBC ratio remains high and reflects a strong capital and surplus position.

As of September 30, 2025, Aflac U.S.'s combined RBC ratio remains high and reflects a strong capital and surplus position.

Aflac, CAIC and TOIC are domiciled in Nebraska and are subject to its regulations.

29 unchanged sentences

Calculations of DAC and the liability for future policy benefits require the use of estimates based on actuarial valuation techniques.

The application of these critical accounting estimates determines the values at which 92% of the Company's assets and 74% of its liabilities are reported as of June 30, 2025, and thus has a direct effect on net earnings and shareholders’ equity.

The application of these critical accounting estimates determines the values at which 92% of the Company's assets and 74% of its liabilities are reported as of September 30, 2025, and thus has a direct effect on net earnings and shareholders’ equity.

Subsequent experience or use of other assumptions could produce significantly different results.

There have been no changes in the items the Company has identified as critical accounting estimates during the six-month period ended June 30, 2025.

There have been no changes in the items the Company has identified as critical accounting estimates during the nine-month period ended September 30, 2025.

For additional information, see the Critical Accounting Estimates section of Item 7.

3 unchanged sentences

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 2. Management’s Discussion and Analysis