Aflac recently convened with investors to outline its strategic advancements and financial achievements, emphasizing strong growth trajectories in both Japan and the United States. The insurance giant showcased its commitment to shareholder value through significant capital returns, including substantial share buybacks and a long history of dividend increases. Discussions also centered on product innovation, expanding distribution channels, and leveraging technology to meet diverse market demands, reflecting a forward-looking approach in a dynamic global insurance landscape.
During a recent event, Aflac's leadership team, including President Virgil Miller and Senior Vice President of Capital Markets David Young, provided insights into the company's 2025 performance. Miller expressed satisfaction with the results, underscoring Aflac's presence in two of the world's largest insurance markets and its unwavering focus on expansion, coupled with stringent cost management and profit optimization. This strategic positioning allows Aflac to capitalize on market opportunities while maintaining financial discipline.
A key focus of Aflac's strategy in Japan involves addressing the nation's demographic shifts, particularly its aging and shrinking population. Miller acknowledged this challenge as ongoing and highlighted Aflac's innovative response through new products and refined market approaches. The company, a pioneer in Japan's 'Third Sector' insurance market, continues to build on its strong foundation in cancer insurance while introducing innovative offerings designed to appeal to a younger demographic. Products like Tsumitasu, Miraito (a cancer insurance product with solid growth), and Anshin Palette (a competitive new medical product) exemplify this adaptive strategy, targeting long-term value creation earlier in life and strengthening its presence in a crowded medical insurance market.
In the U.S. market, Aflac is experiencing a notable shift towards group products and broker-led distribution. Brokers now account for approximately 80% of the total U.S. market sales, and in 2025, they were responsible for over 60% of Aflac's U.S. sales. This trend has fueled impressive growth in group product offerings, with overall group sales increasing by 14%, Life, Absence, and Disability (LAD/PLADS) growing by 11%, and dental & vision seeing a remarkable 48.8% surge. Aflac is also enhancing its agent conversion rates and investing in advanced technology and artificial intelligence to boost efficiency and streamline enrollment processes.
From a capital management perspective, Aflac has consistently prioritized returning value to its shareholders. In 2025, the company distributed nearly $4.8 billion through dividends and share repurchases, with $3.5 billion allocated to buybacks. This marks a significant achievement and extends Aflac's record of consecutive dividend increases to 43 years. The company maintains an internal capital target near 10% and is actively working towards this goal, with an eye on selective mergers and acquisitions that strategically align with its core business of supplemental health insurance. Aflac's financial strategy also includes leveraging higher Japanese government bond yields to potentially increase Tsumitasu sales through bank partnerships and employing strategies to mitigate foreign exchange sensitivity on its Economic Solvency Ratio.
Looking ahead, Aflac's leadership foresees substantial untapped potential in the U.S. market. The company plans to intensify its focus on dental and vision offerings, alongside continued emphasis on expanding its life, absence, and disability segments. Increased advertising efforts will aim to educate consumers on the value proposition of Aflac's products, further solidifying its brand strength and driving future growth. The company's adaptive strategies in both product development and distribution, coupled with its robust capital management, position it for sustained success in the evolving global insurance landscape.