Aflac Incorporated (AFL Quick QuoteAFL - Free Report) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.78, which surpassed the Zacks Consensus Estimate by 4.1%. However, the bottom line decreased 2.7% year over year. 

Adjusted revenues dropped 11.7% year over year to $4.5 billion. The top line beat the consensus mark by 2.3%.

The quarterly results benefited from higher new annualized premium sales in the Japan segment, driven by strong demand for the new Miraito cancer insurance product. Strong sales and persistency rates in the U.S. business also contributed to the upside. However, the upside was partly offset by elevated acquisition and operating expenses, coupled with reduced net investment income in the U.S. segment.

Aflac Incorporated Price, Consensus and EPS Surprise

Aflac Incorporated price-consensus-eps-surprise-chart | Aflac Incorporated Quote

AFL’s Q2 Performance

Adjusted net investment income of $1 billion inched up 0.3% year over year in the quarter under review. 

Total net benefits and claims increased 4.6% year over year to $2 billion. Total acquisition and operating expenses of $1.3 billion escalated 10.9% year over year.

Pre-tax earnings came in at $822 million, which declined nearly three-fold year over year.

Inside Aflac’s Segments

Aflac Japan: The segment recorded adjusted revenues of $2.5 billion in the second quarter, which inched up 1% year over year and beat the Zacks Consensus Estimate of $2.4 billion. Total net earned premiums improved 2.7% year over year to $1.76 billion but marginally missed the consensus mark. 

Adjusted net investment income totaled $699 million, which slipped 3.6% year over year. The unit’s pre-tax adjusted earnings fell 8.6% year over year to $790 million, which outpaced the consensus mark of $750 million. 

New annualized premium sales of $143 million climbed 23.2% year over year on the back of solid sales of Miraito. The segment's benefit ratio was 66.5% in the quarter under review.

Aflac U.S.: Adjusted revenues came in at $1.73 billion, which grew 2.6% year over year but marginally missed the Zacks Consensus Estimate of $1.74 billion. Total net earned premiums rose 3.4% year over year to $1.5 billion on the back of sales growth and strong persistency rates. 

Adjusted net investment income of $207 million tumbled 5% year over year in the second quarter. Pretax adjusted earnings of the segment inched up 1.3% year over year to $388 million, attributable to higher premiums. The metric beat the consensus mark of $352 million. 

Aflac’s U.S. sales totaled $340 million, which grew 2.7% year over year on the back of higher sales of group life and disability products. The second-quarter benefit ratio came in at 47.3%.

Financial Position (As of June 30, 2025)

Aflac exited the second quarter with total cash and cash equivalents of $7 billion, which advanced 11.8% from the 2024-end level. Total assets of $124.7 billion increased 6.1% from the figure at 2024-end. 

Adjusted debt came in at $8.1 billion, up 12.8% from the figure as of Dec. 31, 2024. Adjusted debt to adjusted capitalization, excluding accumulated other comprehensive income, deteriorated 280 basis points from the 2024-end level to 22.5% at the second-quarter end. While the company had debt maturities worth $86 million in less than a year, total debt maturities worth $3.3 billion are expected within the next five years.

Total shareholders' equity of $27.2 billion rose 4.2% from the 2024-end figure.

Adjusted book value per share increased 9.6% year over year to $50.86. Adjusted return on equity, excluding foreign currency impacts, was 16.4%, which deteriorated 110 bps year over year.

AFL’s Capital Deployment

Aflac bought back 7.9 million shares worth $829 million in the second quarter. It had 30.9 million shares left for buyback as of the second-quarter end.

Management announced dividends of 58 cents per share for the second quarter. The dividend will be paid out on Sept. 2, 2025, to shareholders of record as of Aug. 20.

AFL’s 2025 Outlook

Aflac continues to expect a benefit ratio of 64-66% for the Aflac Japan unit in 2025. The same continues to be projected within 48-52% in Aflac U.S.

The expense ratio for Aflac Japan and Aflac U.S. is reiterated to be 20-23% and 36-39%, respectively, for 2025.

The pretax profit margin for Aflac Japan and Aflac U.S. continues to be estimated within 30-33% and 17-20%, respectively, for 2025.

AFL’s Zacks Rank

Aflac currently carries a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported second-quarter 2025 results so far, the bottom-line results of The Hartford Insurance Group, Inc. (HIG Quick QuoteHIG - Free Report) , AXIS Capital Holdings Limited (AXS Quick QuoteAXS - Free Report) and The Travelers Companies, Inc. (TRV Quick QuoteTRV - Free Report) beat the respective Zacks Consensus Estimate.

Hartford Insurance reported second-quarter 2025 adjusted operating earnings of $3.41 per share, which surpassed the Zacks Consensus Estimate by 23.1%. The bottom line climbed 36% year over year. HIG's operating revenues rose 9.9% year over year to $4.9 billion. The top line beat the consensus mark by 0.2%. Earned premiums of Hartford amounted to $5.96 billion, which advanced 6.9% year over year. Pre-tax net investment income improved 10.3% year over year to $664 million. 

Pretax income climbed 36.6% year over year to $1.2 billion. Revenues in the Business Insurance segment grew 10.9% year over year to $3.87 billion in the second quarter. Core earnings of $697 million improved 26% year over year. The underlying combined ratio deteriorated 60 bps year over year to 88%. The Personal Insurance segment’s revenues of $1 billion advanced 10.1% year over year. Core earnings were $94 million against the prior-year quarter’s core loss of $4 million. 

AXIS Capital’s second-quarter 2025 operating income of $3.29 per share beat the Zacks Consensus Estimate by 14.2%. The bottom line increased 12.2% year over year. Total operating revenues of $1.6 billion missed the Zacks Consensus Estimate by 3.2%. The top line, however, rose 5.6% year over year. Net premiums written increased 4% to $1.6 billion. Net investment income decreased 2% year over year to $187 million. 

Pre-tax catastrophe and weather-related losses and net of reinsurance were $86 million, wider than the year-ago loss of $47 million, primarily attributable to California Wildfires. AXIS Capital’s underwriting income of $189.2 million increased 17.4% year over year. The combined ratio improved 150 bps to 88.9%. In the Insurance segment, net premiums written increased 8.1% year over year to $1.3 billion. Underwriting income of $151.6 million increased 31.1% year over year. The Reinsurance segment’s net premiums written decreased 9.1% year over year to $344.9 million.

Travelers reported second-quarter 2025 core income of $6.51 per share, which beat the Zacks Consensus Estimate by 83.8%. Travelers’ total revenues increased 6.7% from the year-ago quarter to $12.1 billion. The top-line figure, however, missed the Zacks Consensus Estimate by 0.7%. Net written premiums increased 4% year over year to a record $11.5 billion. 

Net investment income increased 6% year over year to $942 million. Travelers witnessed an underwriting profit of $1 billion against a loss of $65 million incurred in the year-ago quarter. The consolidated underlying combined ratio of 84.7 improved 300 bps year over year. In the Business Insurance segment, net written premiums increased 5% year over year to about $5.8 billion. The combined ratio improved 250 bps year over year to 93.6. Segment income of $813 million increased 24% year over year.