Japan momentum: Aflac is driving growth in Japan with products aimed at younger customers—notably Tsumitasu, Miraito and Anshin Palette—while expanding bank and agency distribution and using rate flexibility and higher JGB yields as tailwinds.
U.S. broker-led growth: Brokers now represent about 80% of the U.S. market and generated over 60% of Aflac’s U.S. sales in 2025, fueling group product growth (overall group +14%, LAD/PLADS +11%, dental & vision +48.8%) alongside higher agent conversion and tech/AI investments.
Capital returns first: Aflac returned nearly $4.8 billion to shareholders in 2025—including $3.5 billion of buybacks—prioritizes dividends and repurchases, is targeting an internal capital marker near 10% (currently ~6%), and will pursue M&A only selectively.
Aflac (NYSE:AFL) executives highlighted sales momentum in Japan and the United States, capital return priorities, and ongoing product and distribution investments during a UBS event following the company’s fourth-quarter results.
President Virgil Miller said he was “very pleased” with Aflac’s 2025 performance, emphasizing that the company operates in “two of the largest insurance markets in the world” and remains focused on growth while maintaining discipline on expenses and profitability.
Senior Vice President of Capital Markets David Young said Aflac continued to generate and deploy cash flow consistently, pointing to a “record year” of share repurchases and a long track record of dividend increases. Young said Aflac repurchased $3.5 billion of shares and extended its record to 43 consecutive years of dividend increases, totaling nearly $4.8 billion returned to shareholders through dividends and repurchases.
Addressing Japan’s shrinking and aging population, Miller said the demographic challenge is “not new” and argued that the company’s response has been innovation in both products and go-to-market strategy. He described Aflac as a pioneer in Japan’s “Third Sector” market and said the company continues to use its cancer franchise as an “anchor,” while expanding with newer offerings.
Tsumitasu, introduced the prior year, positioned as a product aimed at younger customers and encouraged by a broader push in Japan to build long-term value earlier in life.
Miraito, a cancer insurance product that Miller said showed “solid growth.”
Anshin Palette, a new medical product launched in the fourth quarter that management described as competitive in a crowded medical market.
Miller and Young also discussed distribution as a differentiator in Japan. Miller said Aflac sells Tsumitasu primarily through bank alliances and noted the company increased the number of banks distributing Aflac products in 2025. He added that Aflac continues to work with its agency force—trained on Tsumitasu—and maintains alliances including Japan Post and Dai-ichi Life.
On competitive dynamics, Miller said competition exists in the First Sector market, but he characterized Tsumitasu as unique and described a design that allows Aflac to adjust rates as interest rates change. He said Aflac made a rate change in September and expects it to support sales.
Management said most of Aflac’s Japan products are not highly interest-rate sensitive, with Tsumitasu as the primary exception. Miller said the product locks in a fixed rate at the time of sale and can be repriced, while other products generally do not build cash surrender value.
Young said higher Japanese government bond yields on the long end of the curve could create an opportunity to sell more Tsumitasu through banks. He also noted that Aflac’s Japan product set is yen-based, stating the company does not sell foreign-exchange products there. Young said foreign exchange can affect Aflac’s Economic Solvency Ratio (ESR), but added that the company can mitigate sensitivity by better matching asset and liability duration. He also referenced potential investment “switch trades” into higher-yielding Japanese government bonds or investment-grade credit as possible opportunities on the asset side.
On post-pandemic recovery in Japan distribution, Miller said he felt the business was “very near recovered,” noting that Aflac successfully recruited about 1,300 agents and agencies during the year and continued to expand bank distribution.
In the U.S., Miller described a competitive environment with increasing numbers of carriers entering the supplemental and voluntary benefits space. He said Aflac remains committed to its agency channel and has increased recruiting for two consecutive years, while also focusing on improving the “conversion rate” of recruits into productive sellers. Miller said that conversion rate was up 16%.
Miller said the U.S. market has shifted toward group products and broker distribution, including penetration into smaller employer sizes. He said brokers now account for about 80% of total sales in the U.S. market and added that, for two years in a row, brokers selling Aflac have outsold the agency channel. Miller said more than 60% of Aflac’s U.S. sales in 2025 came through broker relationships.
He pointed to growth in several U.S. businesses:
Life, Absence, and Disability (LAD/PLADS): Miller said the business delivered 11% growth and has gained traction against long-established incumbents. He also cited administrative relationships for absence with the State of Connecticut and the State of Maine.
Dental and vision: After prior operational challenges that management has discussed previously, Miller said the business has recovered and posted a 48.8% increase in sales last year.
Overall group: Miller said combined group products grew 14%, which he characterized as about three times the market.
On product breadth, Miller said the agency channel continues to be anchored by cancer insurance and that Aflac remains a category leader across cancer, accident, hospital indemnity, and critical illness products. He emphasized streamlining enrollment as a key initiative, describing a new application intended to allow an agent to enroll someone “in one minute,” which he said would be a differentiator given employers’ limited tolerance for lengthy face-to-face enrollments.
On AI, Miller said Aflac is “more advanced” in Japan due in part to a single national regulator and regulatory encouragement there, while U.S. state-by-state filing requirements create additional complexity. He said Aflac is using AI in Japan to improve agent efficiency, reduce back-office work, and enable AI-driven enrollment using bots and avatars. In the U.S., he said the company is using automation to improve efficiency while still relying on agents and brokers, and noted Aflac has digital products available for online purchase in certain cases.
Miller said Aflac’s capital priorities start with dividends and share repurchases, consistent with what he described as the company’s long-standing approach to shareholder returns. He credited CFO Max Brédén for generating excess capital and highlighted the creation of Aflac Bermuda Re as a strategy to move part of the Japan balance sheet to Bermuda, which he said freed up additional capital.
Miller said management has an internal marker of 10% and that the company was “at about 6%” currently, with an expectation to continue moving toward the 10% range before reevaluating.
On acquisitions, Miller said Aflac is “organic-driven” and does not pursue M&A simply to grow inorganically, but remains active in monitoring opportunities. He said he does not currently see an urgent product gap that would require an acquisition, contrasting that with past deals that were intended to fill product gaps in the U.S. group market under a “buy, then build” approach. Young added that Aflac has historically succeeded by maintaining focus on supplemental health and that any potential acquisition would need to make operational and strategic sense before financial considerations.
In closing remarks, Miller said Aflac’s brand strength—particularly in Japan—supports its growth ambitions. He also said he sees “tremendous” underpenetrated opportunity in the U.S., with plans to put a strong focus on dental and vision and continued emphasis on growth in life, absence, and disability, alongside increased advertising that explains product value to consumers.
Aflac Incorporated (American Family Life Assurance Company of Columbus) is a provider of supplemental insurance products designed to help policyholders manage out-of-pocket health care and living expenses. The company underwrites a range of individual and group policies that typically pay cash benefits directly to insureds when covered events occur, enabling greater financial flexibility for medical treatment, hospital stays, critical illness, and related costs. Aflac’s product mix includes supplemental health insurance, life insurance and other specialty coverages intended to complement primary medical plans.
Founded in the mid-20th century and headquartered in Columbus, Georgia, Aflac distributes its products through a combination of employer-sponsored programs, independent brokers and agents, and direct marketing.
