COLUMBUS, Ga., May 1, 2024 /PRNewswire/ -- Aflac Incorporated (NYSE:AFL) today reported its first quarter results. Total revenues were $5.4 billion in the first quarter of 2024, compared with $4.8 billion in the first quarter of 2023, reflecting net investment gains. Net earnings were $1.9 billion, or $3.25 per diluted share, compared with $1.2 billion, or $1.94 per diluted share a year ago. Net earnings in the first quarter of 2024 included net investment gains of $951 million, or $1.65 per diluted share, compared with net investment gains of $123 million, or $0.20 per diluted share a year ago. These net investment gains were driven by net gains of $703 million on certain derivatives and foreign currency; net gains from sales and redemptions of $173 million; and a $76 million gain from an increase in the fair value of equity securities, offset by a $1 million increase in the company's current expected credit losses (CECL) reserves. Adjusted earnings* in the first quarter were $961 million, compared with $953 million in the first quarter of 2023, reflecting an increase of 0.8%. Adjusted earnings per diluted share* increased 7.1% to $1.66 in the quarter. Variable investment income ran $11 million, or $0.01 per share, below the company's long-term return expectations. The weaker yen/dollar exchange rate negatively impacted adjusted earnings per share by $0.08. The average yen/dollar exchange rate in the first quarter of 2024 was 148.67, or 11.0% weaker than the average rate of 132.30 in the first quarter of 2023. Shareholders' equity was $23.5 billion, or $41.27 per share, at March 31, 2024, compared with $19.8 billion, or $32.65 per share, at March 31, 2023. Shareholders' equity at the end of the first quarter included a cumulative decrease of $1.5 billion for the effect of the change in discount rate assumptions on insurance reserves, compared with a corresponding cumulative decrease of $4.9 billion at March 31, 2023 and a net unrealized gain on investment securities and derivatives of $1.1 billion, compared with a net unrealized gain of $1.3 billion at March 31, 2023. Shareholders' equity at the end of the first quarter also included an unrealized foreign currency translation loss of $4.7 billion, compared with an unrealized foreign currency translation loss of $3.6 billion at March 31, 2023. The annualized return on average shareholders' equity in the first quarter was 33.0%. Shareholders' equity excluding AOCI (or adjusted book value*) was $28.6 billion, or $50.22 per share at March 31, 2024, compared with $27.1 billion, or $44.66 per share, at March 31, 2023. The annualized adjusted return on equity excluding foreign currency impact* in the first quarter was 14.3%. AFLAC JAPAN In yen terms, Aflac Japan's net earned premiums were ¥269.9 billion for the quarter, or 6.0% lower than a year ago, mainly due to the prior year reinsurance transactions and limited-pay policies reaching paid-up status. Adjusted net investment income increased 19.3% to ¥96.6 billion, mainly due to lower hedge costs, the favorable impact of the weakening yen on U.S. dollar investments, and higher variable investment income. Total adjusted revenues in yen declined 0.4% to ¥367.6 billion. Pretax adjusted earnings in yen for the quarter increased 15.6% on a reported basis to ¥120.6 billion, primarily due to lower benefits and expenses during the quarter. Pretax adjusted earnings increased 9.3% on a currency-neutral basis. The pretax adjusted profit margin for the Japan segment increased to 32.8%, compared with 28.2% a year ago. In dollar terms, net earned premiums decreased 16.3% to $1.8 billion in the first quarter. Adjusted net investment income increased 6.1% to $648 million. Total adjusted revenues declined by 11.4% to $2.5 billion. Pretax adjusted earnings increased 2.8% to $810 million. For the quarter, total new annualized premium sales (sales) decreased 5.1% to ¥12.5 billion, or $84 million, primarily reflecting softer first sector sales. AFLAC U.S. Aflac U.S. net earned premiums increased 3.3% to $1.5 billion in the first quarter compared to the prior year due primarily to sales recovery in the prior year and continued improvement in persistency. Adjusted net investment income increased 4.6% to $206 million, largely due to higher variable investment income and a shift to higher-yielding fixed-income investments. Total adjusted revenues were up 2.3% to $1.7 billion. Pretax adjusted earnings were $356 million, 1.1% higher than a year ago, primarily due to higher revenue and lower expenses offset by higher benefits. The pretax adjusted profit margin for the U.S. segment was 21.0%, compared with 21.2% a year ago. Aflac U.S. sales decreased 5.2% in the quarter to $298 million, reflecting continued strong underwriting discipline. CORPORATE AND OTHER For the quarter, total adjusted revenues increased 91.5% to $247 million compared to the prior year primarily due to reinsurance transactions in the fourth quarter of 2023 resulting in an increase to both total net earned premiums and adjusted net investment income, which also increased due to a lower volume of tax credit investments. Total benefits and adjusted expenses increased $114 million compared to prior year primarily as a result of the increased reinsurance activity. Pretax adjusted earnings were a loss of $3 million, compared with a loss of $7 million a year ago. DIVIDEND AND CAPITAL RETURNED TO SHAREHOLDERS The board of directors declared the second quarter dividend of $0.50 per share, payable on June 3, 2024 to shareholders of record at the close of business on May 22, 2024. In the first quarter, Aflac Incorporated deployed $750 million in capital to repurchase 9.3 million of its common shares. At the end of March 2024, the company had 68.5 million remaining shares authorized for repurchase. OUTLOOK Commenting on the company's results, Aflac Incorporated Chairman, Chief Executive Officer and President Daniel P. Amos stated: "Aflac delivered very solid earnings for the quarter. We have continued to actively concentrate on driving profitable growth in the U.S. and Japan with new products and distribution strategies. We believe our strategy will continue to create long-term value for shareholders.  "Looking at our operations in Japan, we have maintained disciplined underwriting and expense management to drive strong pretax profit margins. We expect sales campaigns around our 50th anniversary in Japan starting in the second quarter to get us back on track for the year.  "In the U.S., we continue to focus on more profitable growth by exercising a stronger underwriting discipline with an emphasis on persistency. As a result, we are seeing positive results in both net earned premiums growth and persistency. At the same time, we continue our disciplined approach to expense management and maintaining a strong pretax margin. We expect to drive further improvements throughout the year. "We continue to generate strong capital and cash flows while maintaining our commitment to prudent liquidity and capital management. We treasure our track record of 41 consecutive years of dividend growth and remain committed to extending it, supported by our financial strength. In the quarter, we repurchased a record $750 million in shares and intend to continue our balanced approach of investing in growth and driving long-term operating efficiencies." *See Non-U.S. GAAP Financial Measures section for an explanation of foreign exchange and its impact on the financial statements and definitions of the non-U.S. GAAP financial measures used in this earnings release, as well as a reconciliation of such non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measures. ABOUT AFLAC INCORPORATED Aflac Incorporated (NYSE:AFL), a Fortune 500 company, has helped provide financial protection and peace of mind for more than 68 years to millions of policyholders and customers through its subsidiaries in the U.S. and Japan. In the U.S., Aflac is the No. 1 provider of supplemental health insurance products.1 In Japan, Aflac Life Insurance Japan is the leading provider of cancer and medical insurance in terms of policies in force. The company takes pride in being there for its policyholders when they need us most, as well as being included in the World's Most Ethical Companies by Ethisphere for 18 consecutive years (2024), Fortune's World's Most Admired Companies for 23 years (2024) and Bloomberg's Gender-Equality Index for the fourth consecutive year (2023). In addition, the company became a signatory of the Principles for Responsible Investment (PRI) in 2021 and has been included in the Dow Jones Sustainability North America Index (2023) for 10 years. To find out how to get help with expenses health insurance doesn't cover, get to know us at aflac.com or aflac.com/espanol. Investors may learn more about Aflac Incorporated and its commitment to corporate social responsibility and sustainability at investors.aflac.com under "Sustainability." 1 LIMRA 2022 U.S. Supplemental Health Insurance Total Market Report A copy of Aflac's financial supplement for the quarter can be found on the "Investors" page at aflac.com. Aflac Incorporated will webcast its quarterly conference call via the "Investors" page of aflac.com at 7:00 a.m. (ET) on May 2, 2024. Note: Tables within this document may not foot due to rounding. AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED INCOME STATEMENT (UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AND PER-SHARE AMOUNTS) THREE MONTHS ENDED MARCH 31, 2024 2023 % Change Total revenues $   5,436 $   4,800 13.3 % Benefits and claims, net 2,010 2,150 (6.5) Total acquisition and operating expenses 1,256 1,308 (4.0) Earnings before income taxes 2,170 1,342 61.7 Income taxes 291 154 Net earnings $   1,879 $   1,188 58.2 % Net earnings per share – basic $     3.27 $     1.94 68.6 % Net earnings per share – diluted 3.25 1.94 67.5 Shares used to compute earnings per share (000): Basic 574,886 611,205 (5.9) % Diluted 577,482 613,950 (5.9) Dividends paid per share $     0.50 $     0.42 19.0 %   AFLAC INCORPORATED AND SUBSIDIARIES CONDENSED BALANCE SHEET (UNAUDITED – IN MILLIONS, EXCEPT FOR SHARE AMOUNTS) MARCH 31, 2024 2023 % Change Assets: Total investments and cash $ 111,716 $ 120,500 (7.3) % Deferred policy acquisition costs 8,819 9,267 (4.8) Other assets 4,207 5,199 (19.1) Total assets $ 124,742 $ 134,966 (7.6) % Liabilities and shareholders' equity: Policy liabilities $  85,364 $   99,933 (14.6) % Notes payable and lease obligations 7,912 7,420 6.6 Other liabilities 7,929 7,829 1.3 Shareholders' equity 23,537 19,784 19.0 Total liabilities and shareholders' equity $ 124,742 $ 134,966 (7.6) % Shares outstanding at end of period (000) 570,278 605,952 (5.9) %   NON-U.S. GAAP FINANCIAL MEASURES This document includes references to the Company's financial performance measures which are not calculated in accordance with United States generally accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial measures exclude items that the Company believes may obscure the underlying fundamentals and trends in insurance operations because they tend to be driven by general ...