Total revenue for the quarter reached $4.3 billion, up 27.9% from $3.3 billion a year earlier, and exceeded consensus estimates of $4.18 billion. The growth was driven by strong demand in the U.S. group and network dental/vision businesses, while the Japan segment’s net earned premiums fell 3.8% to $1.6 billion, reflecting a weaker yen and lower premium volumes.
Net earnings surged to $1.0 billion, a dramatic increase from the $29 million earned in the same quarter a year earlier. The jump was largely attributable to a reversal of investment losses that had weighed on the prior year’s earnings, as well as favorable fair‑value gains on the company’s investment portfolio.
Adjusted earnings for the quarter were $901 million, a 0.6% decline from $906 million in Q1 2025. Adjusted earnings per diluted share fell to $1.75 from $1.80, missing the consensus estimate of $1.80. The decline reflects higher claims costs and a modest compression in the U.S. segment’s benefit‑to‑premium ratio.
Segment performance highlights include a 3.5% rise in U.S. net earned premiums to $1.555 billion, driven by growth in group and network dental/vision products. In Japan, new product launches—Anshin Palette (medical), Miraito (cancer), and Tsumitasu (life)—generated strong demand, but overall premiums declined 3.8% due to currency headwinds and a 6.4% drop in net earned premiums in dollar terms. Aflac also completed its first external reinsurance transaction in Japan with Japan Post Insurance, reinsuring a block of whole‑life annuities.
The company increased its quarterly dividend by 5.2% to $0.61 per share, extending a 43‑year record of consecutive dividend increases. Management reiterated confidence in the company’s long‑term growth prospects and maintained its full‑year 2026 guidance, indicating a stable outlook for revenue and earnings.
Investors reacted to the earnings release with a focus on the adjusted EPS miss, which fell short of analyst expectations by $0.05 per share. The miss, combined with the impact of a weaker yen on Japan’s premiums, tempered enthusiasm for the otherwise strong revenue performance.
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