Item 1. Business
Competitive Markets
Aflac U.S. competes against several supplemental insurance carriers on a national and regional basis. Aflac U.S. believes its policies, premium rates, platforms, value-added services and sales commissions are competitive by product type. Moreover, Aflac U.S. believes that its products are distinct from competitive offerings given its product focus (including features, benefits and claims service model), distribution capabilities and brand awareness.
Since Aflac products provide an additional level of financial protection for policyholders, the Company believes the increased financial exposure some employees may face creates a favorable opportunity for Aflac U.S. products. However, given the profitability erosion some major medical carriers are facing in their core lines of business, the Company has seen a more competitive landscape as these carriers seek entry into Aflac's supplemental product segments and leverage their core benefit offerings by bundling and discounting products in order to gain market share.
Government Regulation
State Insurance Regulation The Parent Company and its U.S. insurance subsidiaries, Aflac, CAIC, TOIC (Nebraska-domiciled insurance companies), Aflac New York (a New York-domiciled insurance company) and ABS (a licensed third-party administrator in most U.S. jurisdictions and a pre-paid limited health service organization in Florida) are subject to state regulations in the U.S. as an insurance holding company system. Such regulations generally provide that certain transactions between companies within the holding company system must be fair and equitable. In addition, transfers of assets among such affiliated companies, certain dividend payments from insurance subsidiaries and certain transactions between companies within the system, including management fees, loans and advances are subject to prior notice to, or approval by, state regulatory authorities. These laws generally require, among other things, the insurance holding company and each insurance company directly owned by the holding company to register with the insurance departments of their respective domiciliary states and to furnish annually financial and other information about the operations of companies within the holding company system.
Like all U.S. insurance companies, Aflac, CAIC, TOIC and Aflac New York are subject to regulation and supervision in the jurisdictions in which they do business. In general, the insurance laws of the various jurisdictions establish supervisory agencies with broad administrative powers relating to, among other things:
•granting and revoking licenses to transact business
•regulating trade and claims practices
•licensing of insurance agents and brokers
•approval of policy forms and premium rates
•standards of solvency and maintenance of specified policy benefit reserves and minimum loss ratio requirements
•capital requirements
•limitations on dividends to shareholders
•the nature of and limitations on investments
•deposits of securities for the benefit of policyholders
•filing of financial statements prepared in accordance with statutory insurance accounting practices prescribed or permitted by regulatory authorities
•periodic examinations of the market conduct, financial, and other affairs of insurance companies
The insurance laws of Nebraska that govern the Company's activities provide that the acquisition or change of “control” of a domestic insurer or of any person that controls a domestic insurer cannot be consummated without the prior approval of the Nebraska Department of Insurance (NDOI). A person seeking to acquire control, directly or indirectly, of a domestic insurance company or of any person controlling a domestic insurance company (in the case of Aflac, CAIC and TOIC, the Parent Company) must generally file with the NDOI an application for change of control containing certain information required by statute and published regulations and provide a copy to the Company. In Nebraska, control is generally presumed to exist if any person, directly or indirectly, acquires 10% or more of an insurance company or of any other person or entity controlling the insurance company. The 10% presumption is not conclusive and control may be found to exist at less than 10%. Similar laws apply in New York, the domiciliary jurisdiction of Aflac's New York insurance subsidiary.
State insurance departments conduct periodic examinations of the books and records, financial reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years. Examinations are generally carried out in cooperation with the insurance departments of other states under guidelines promulgated by the National Association of Insurance Commissioners (NAIC). Beginning in 2024 and concluding in 2025, the NDOI and the New York State Department of Financial Services (NYSDFS) conducted full-scope, risk-focused
Item 1. Business
financial examinations on their respective state domiciled insurance entities covering the reporting period January 1, 2020 – December 31, 2023. Additionally, beginning in 2023 and concluding in 2025, the NYSDFS conducted a routine market conduct examination on Aflac New York covering the five-year period ended on December 31, 2022. There were no material findings in any of the NDOI and NYSDFS final examination reports.
NAIC Risk-Based Capital The NAIC continually reviews regulatory matters, such as risk-based capital (RBC) modernization, group capital calculations and liquidity risk assessment. The NAIC uses an RBC formula relating to insurance risk, business risk, asset risk and interest rate risk to facilitate identification by insurance regulators of inadequately capitalized insurance companies based upon the types and mix of risk inherent in the insurer's operations. The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of a company's regulatory total adjusted capital to its authorized control level RBC as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The levels are company action, regulatory action, authorized control, and mandatory control. See Note 14 of the Notes to the Consolidated Financial Statements and the Liquidity and Capital Resources section of Item 7. MD&A for additional information on RBC.
Guaranty Association and Similar Arrangements Under state insurance guaranty association laws and similar laws in international jurisdictions, the Company is subject to assessments, based on the share of business the Company writes in the relevant jurisdiction, for certain obligations of insolvent insurance companies to policyholders and claimants. In the U.S., some states permit member insurers to recover assessments paid through full or partial premium tax offsets. The Company's policy is to accrue assessments when the entity for which the insolvency relates has met its state of domicile's statutory definition of insolvency, the amount of the loss is reasonably estimable and the related premium upon which the assessment is based is written. In most states, the definition is met with a declaration of financial insolvency by a court of competent jurisdiction.
Federal and State Regulation Federal and state legislation and regulations in several areas, including health care reform legislation, financial services reform legislation, securities regulation, pension regulation, privacy, anti-money laundering, tort reform legislation and taxation, can significantly and adversely affect insurance companies. Certain federal and state laws and regulations applicable to Aflac U.S. are outlined below.
•Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the ACA), federal health care reform legislation, gave the U.S. federal government direct regulatory authority over the business of health insurance. The ACA, as enacted, does not require material changes in the design of the Company's insurance products. However, indirect consequences of, or changes to, the legislation and regulations could present challenges that could potentially have an impact on the Company's sales model, financial condition and results of operations. Certain provisions of the ACA have been and may continue to be subject to challenge through litigation, the ultimate effects of which on the ACA are uncertain. See Item 1A. Risk Factors for the risk factor entitled, "Extensive regulation and changes in legislation can impact profitability and growth" for additional information.
•Dodd-Frank Act
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) and regulations issued thereunder, in particular rules to require central clearing for certain types of derivatives, may have an impact on the Company's derivative activity, including activity on behalf of Aflac Japan. The Dodd-Frank Act also established a Federal Insurance Office (FIO) under the U.S. Department of the Treasury to monitor all aspects of the insurance industry and of lines of business other than certain health insurance, certain long-term care insurance and crop insurance.
Item 1. Business
•Privacy and Cybersecurity
In the absence of a comprehensive federal privacy law, states are making a push towards privacy legislation. Personally identifiable information is used in support of many of the Company's business processes. For many years, the standard for protection and treatment of that data was benchmarked by privacy and security provisions of the federal Gramm-Leach-Bliley Act of 1999 (GLBA) and in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). As consumers have grown more concerned about the protection of their data, as well as how their data is used by organizations, jurisdictions within and outside of the U.S. have created legislation and issued regulations that apply or may in the future apply to aspects of Aflac U.S. operations and allow consumers the right to access, correct, delete, or opt out of the sale or share, or limit the use of their data. Although not all apply to Aflac U.S. operations, an example of these state privacy laws is the California Consumer Privacy Act.
Businesses across industries have also seen an increase in lawsuits alleging tracking technologies on their websites violate state or federal wiretapping laws. At the federal level, the Telephone Consumer Protection Act (TCPA) continues to provide plaintiffs with a private right of action for claims alleging violation of the TCPA. Additionally, certain states are adopting the NAIC Model Bulletin on the Use of Artificial Intelligence Systems by Insurers and, in limited cases, passing their own laws related to artificial intelligence.
Cybersecurity continues to be an area of evolving focus for legislation and regulatory activity. The NYSDFS Cybersecurity Requirements for Financial Services Companies applies to Aflac New York. This regulation requires, among other things, risk assessments, administrative and technical controls, incident reporting procedures, business continuity plans, and certain cybersecurity governance, such as the designation of a Chief Information Security Officer and senior governing body oversight. In addition, more than 25 states have adopted the NAIC’s Insurance Data Security Model Law, which requires similar cybersecurity measures. For information regarding the Company's cybersecurity risk management, strategy, and governance, see Item 1C. Cybersecurity.
For additional information regarding Aflac U.S. operations and regulations, see the Aflac U.S. Segment subsection of Item 7. MD&A and Notes 2 and 14 of the Notes to the Consolidated Financial Statements.
CORPORATE AND OTHER
The Company's other operations include the Parent Company, Aflac Global Ventures LLC and its subsidiaries, asset management subsidiaries, results of reinsurance activities including Aflac Re Bermuda Ltd. (Aflac Re), and a printing subsidiary.
Investments of Aflac U.S., as well as certain sub-advised assets of Aflac Japan, are managed by the Company’s U.S. asset management subsidiary, Aflac Asset Management LLC (AAM), and investments of Aflac Japan are managed pursuant to an investment advisory agreement between Aflac Japan and the Company's asset management subsidiary in Japan, Aflac Asset Management Japan Ltd. (AAMJ). AAMJ is licensed as a discretionary asset manager under the Japan Financial Instruments and Exchange Act and is subject to rules of the Japan Investment Advisors Association, a self-regulatory organization with mandatory membership for Japan investment managers. AAM is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. AAM and AAMJ are reported in Corporate and other; however, the assets that they manage are reported in the respective Aflac Japan and Aflac U.S. segments.
Aflac Re is a Bermuda domiciled insurer that reinsures certain policies issued by ALIJ. Aflac Re is subject to regulation in Bermuda, where the Bermuda Monetary Authority (BMA) has broad administrative powers relating to granting and revoking licenses to transact reinsurance business, approval of specific reinsurance transactions, capital requirements and solvency standards, limitations on dividends to shareholders, the nature of and limitations on investments, and the filing of financial statements in accordance with prescribed or permitted accounting practices.
For additional information on the Company's other operations, see the Corporate and other subsection of Item 7. MD&A and Note 8 of the Notes to the Consolidated Financial Statements.
HUMAN CAPITAL
The Company’s overarching human capital philosophy is, “If you take care of your employees, your employees will take care of the business.” The Company's compensation and benefit expense totaled approximately $2.1 billion in 2025 and $2.0 billion in 2024. The Company believes its employee relations are generally satisfactory.
Item 1. Business
The following table details the number of full-time employees as of December 31.
2025 Aflac Japan | 6,804 Aflac U.S. | 5,117 Corporate and other | 795 Total | 12,716
Talent
The Company uses internal and external resources to attract, retain and develop talent across a variety of backgrounds and demographics.
Aflac Japan seeks top-tier talent through annual recruitment of new university graduates as well as mid-career recruitment of those with specialty skills or expertise. For its employees, Aflac Japan implements standard and unified training and development programs focusing on a range of business skills. For example, in 2024, Aflac Japan launched Aflac Leadership Academy, a corporate learning initiative specializing in the development of Aflac Japan's next-generation management. Aflac Japan also implemented a human capital management system that provides employees access to descriptions and necessary skills for all job positions across the Company to more proactively design their careers.
Aflac U.S. actively partners with colleges, universities and civic organizations to attract exceptional talent. Aflac U.S. provides a range of internships, co-op programs and transitional opportunities designed to help emerging professionals grow and succeed. Additionally, employees have access to educational resources that support self-development and skill-enhancement, enabling them to strengthen both technical and professional capabilities.
Compensation
Aflac Japan and Aflac U.S. Human Resources operate as centralized compensation functions, providing guidance and oversight to management teams to ensure pay aligns with job scope, responsibilities, and duties. This function reviews new-hire offers, promotions and salary adjustments to maintain fairness and consistency. Defined salary structures are regularly evaluated and updated using market data. Job levels and corresponding compensation are determined annually based on market benchmarks and role requirements. Employee performance reviews occur each year end and influence both bonuses and salary decisions.
Health and Wellness
In 2025, Aflac Japan was certified, for the eighth consecutive year, as one of the top 500 Leading Companies in Health and Productivity Management under the Certified Health & Productivity Management Outstanding Organizations Recognition Program with Japan's Ministry of Economy, Trade and Industry. This certification is awarded for best practices in employee health management, strategically focused work style and development of a socially appreciative work environment. Aflac Japan's current certification was in recognition of regular monitoring of key health indicators by members of Aflac Japan's management, strategic implementation of health management initiatives and disclosure of information, and efforts to promote and maintain employee health.
Aflac U.S. Health and Wellness, a training and service program works to enhance organizational health, encourage healthy lifestyles among all U.S. employees, provide a variety of wellness programs to meet a wide range of personal health needs, recognize employees for participating in healthier lifestyles activities, and support a positive corporate culture that is focused on celebrating and improving the quality of life for all U.S. employees.
Workforce Demographics
•As of December 31, 2025, women account for 55% of Aflac Japan employees and 34% of those in leadership roles. Women also held 22% of senior management roles.
•As of December 31, 2025, 47% of Aflac U.S. and the Parent Company employees located in the U.S. were people of color and 65% were women. Women also occupied 51% of leadership roles located in the U.S. and 35% of senior management roles. In 2025, 55% of new hires located in the U.S. were people of color and 68% were women.
Item 1. Business
•Established in 2009, Aflac Heartful Services Co., Ltd. (Aflac Heartful Services), a subsidiary of Aflac Japan, promotes the hiring of employees with disabilities. Aflac Heartful Services has established a barrier-free work environment and provides, among other things, specialized training, specially-trained supervisors and development opportunities to support those with disabilities. Of Aflac Heartful Services’ 158 employees as of December 31, 2025, 124 have a disability. Aflac Heartful Services supports these employees with the assistance of advisors for long-term career support.
Employee Engagement and Culture
The Company strives to have an engaged employee culture by developing programs including career development support and programs emphasizing work life balance. Each year, Aflac Japan conducts an employee engagement survey in which all employees answer questions about the company and their organization to measure engagement across the company and detect organizational issues. The results of the survey are reported to Aflac Japan's Human Capital Management Policy Committee to identify issues, formulate enhancement/improvement measures and implement them. Aflac U.S. conducts an employee engagement survey every two years to capture feedback on company culture and overall satisfaction. Insights from the survey are used in collaboration with leadership to drive continuous improvements and enhance the employee experience.
Item 1. Business
Information about the Company's Executive Officers
NAME | PRINCIPAL OCCUPATION(1) | AGE Daniel P. Amos | Chairman, Aflac Incorporated and Aflac, since 2001; Chief Executive Officer, Aflac Incorporated and Aflac, since 1990; President, Aflac Incorporated, from 2024 until 2025 | 74 Steven K. Beaver | Executive Vice President, Chief Financial Officer, Aflac Japan, since 2024; First Senior Vice President, Deputy Chief Financial Officer, Aflac Japan, from 2023 until 2024; Senior Vice President, Chief Financial Officer, Aflac U.S., from 2019 until 2023 | 61 Robin L. Blackmon | Chief Accounting Officer, Aflac Incorporated, since 2024; Senior Vice President, Financial Services, Aflac Incorporated, since 2024; Vice President, Deputy Chief Accounting Officer, Aflac Incorporated, from 2023 until 2024; Vice President, Corporate Financial Planning and Analysis, Aflac Incorporated, from 2019 until 2023 | 62 Max K. Brodén | Senior Executive Vice President, Aflac Incorporated and Aflac, since 2025; Chief Financial Officer, Aflac Incorporated, since 2020; Executive Vice President, Aflac Incorporated and Aflac, from 2020 until 2025; Treasurer, Aflac, from 2017 until 2024; Treasurer, Aflac Incorporated from 2017 until 2021 | 47 Bradley E. Dyslin | Executive Vice President, Global Chief Investment Officer, Aflac, since 2023; President, Aflac Asset Management LLC, since 2023; Deputy Global Chief Investment Officer, Aflac, from 2021 until 2023; Senior Managing Director, Global Head of Credit and Strategic Investment Opportunities, Aflac, from 2017 until 2021 | 60 Masatoshi Koide | President and Representative Director, Aflac Japan, since 2018(2) | 65 Charles D. Lake II | President, Aflac International, since 2014; Chairman and Representative Director, Aflac Japan, since 2018(2) | 64 Virgil R. Miller | President, Aflac Incorporated, since 2025; President, Aflac U.S., since 2023; Deputy President, Aflac U.S., from 2022 until 2023; Executive Vice President, President of Group and Individual Benefits Division, Aflac U.S., from 2021 until 2022; Executive Vice President, Chief Operating Officer, Aflac U.S., from 2018 until 2021 | 57 Frederic J. Simard | Deputy President, Aflac U.S., since 2026; Executive Vice President, Chief Operating Officer, Aflac U.S., from 2025 until 2026; Chief Financial Officer, Aflac U.S., from 2023 until 2026; Senior Vice President, Aflac U.S., from 2023 until 2025; Consultant, Gerson Lehrman Group, a financial services company, in 2023; Chief Financial Officer, North American Life and Health Division, General Electric Company, an industrial and financial services company, in 2022; Chief Financial Officer and Chief Actuary, Employee Benefits, The Guardian Life Insurance Company of America, a life insurance company, from 2018 until 2022 | 57 Audrey B. Tillman | Senior Executive Vice President, Aflac Incorporated and Aflac, since 2025; General Counsel, Aflac Incorporated and Aflac, since 2014; Executive Vice President, Aflac Incorporated and Aflac, from 2014 until 2025 | 61
(1) Unless specifically noted, the respective executive officer has held the occupation(s) set forth in the table for at least the last five years. Each executive officer is appointed annually by the board of directors and serves until his or her successor is chosen and qualified, or until his or her death, resignation or removal.
(2) In April 2018, Aflac Japan was converted to a Japan subsidiary from a branch of Aflac.