AFLAC INC

Company Overview

Aflac Incorporated (the Parent Company) and its subsidiaries (collectively, the Company) provide financial protection to millions of policyholders and customers in Japan and the United States (U.S.). The Company’s principal business is supplemental health and life insurance products with the goal to provide customers the best value in supplemental insurance products in Japan and the U.S. The Company's insurance business consists of two reporting segments: Aflac Japan and Aflac U.S. The Parent Company’s primary insurance subsidiaries are Aflac Life Insurance Japan Ltd. in Japan (Aflac Japan) and American Family Life Assurance Company of Columbus (Aflac); Continental American Insurance Company (CAIC), branded as Aflac Group Insurance (AGI); American Family Life Assurance Company of New York (Aflac New York); Tier One Insurance Company (TOIC) and Aflac Benefits Solutions, Inc. (ABS), which provides a platform for Aflac Dental and Vision in the U.S. (collectively, Aflac U.S.). The Parent Company, other operating business units that are not individually reportable, reinsurance activities, including reinsurance activity of Aflac Re Bermuda Ltd. (Aflac Re), and other business activities not included in Aflac Japan or Aflac U.S., as well as intercompany eliminations, are included in Corporate and other.

Performance Highlights

Total revenues were $3.3 billion in the third quarter of 2026, compared with $4.7 billion in the third quarter of 2025, primarily due to net investment losses of $1.1 billion in the third quarter of 2026 largely associated with a strategic repositioning of the investment portfolio, compared with net investment gains of $275 million in the third quarter of 2025.

Net earnings were $303 million, or $.61 per diluted share, in the third quarter of 2026, compared with $1.6 billion, or $3.08 per diluted share, in the third quarter of 2025. Net earnings in the third quarter of 2026 included a $51 million tax capital loss valuation allowance established against a portion of the Company's deferred tax assets associated with tax capital loss carryforwards.

Net earnings in the third quarter of 2026 included net investment losses of $1.1 billion, compared with net investment gains of $275 million in the third quarter of 2025. Net investment losses in the third quarter of 2026 included $842 million of net losses from sales and redemptions; $146 million of net losses from certain derivative and foreign currency gains or losses; an increase in credit loss allowances of $102 million; $1 million of impairments; offset by a gain of $19 million from an increase in the fair value of equity securities.

Total revenues were $11.7 billion in the first nine months of 2026, compared with $12.3 billion in the first nine months of 2025.

Net earnings were $2.1 billion, or $4.24 per diluted share, in the first nine months of 2026, compared with $2.3 billion, or $4.21 per diluted share, in the first nine months of 2025. Net earnings in the first nine months of 2026 included a $51 million tax capital loss valuation allowance established against a portion of the Company's deferred tax assets associated with tax capital loss carryforwards.

Net earnings in the first nine months of 2026 included net investment losses of $1.2 billion, compared with net investment losses of $1.1 billion in the first nine months of 2025. Net investment losses in the first nine months of 2026 included $1.1 billion of net losses from sales and redemptions; an increase in credit loss allowances of $240 million; $36 million of impairments; offset by $104 million of net gains from certain derivative and foreign currency gains or losses; and a gain of $92 million from an increase in the fair value of equity securities.

Adjusted earnings(1) in the third quarter of 2026 were $1.2 billion, or $2.43 per diluted share, compared with $1.3 billion, or $2.49 per diluted share, in the third quarter of 2025. The average yen/dollar exchange rate(2) for the three-month period ended September 30, 2026 was 158.49, or 6.8% weaker than the average rate of 147.68 for the same period in 2025. The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.03.

Adjusted earnings(1) in the first nine months of 2026 were $3.0 billion, or $5.92 per diluted share, compared with $3.2 billion, or $5.92 per diluted share, in the first nine months of 2025. The average yen/dollar exchange rate(2) for the nine-month period ended September 30, 2026 was 158.28, or 6.5% weaker than the average rate of 148.03 for the same period in 2025. The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.10.

Shareholders’ equity was $29.3 billion, or $59.08 per share, at September 30, 2026, compared with $29.5 billion, or $56.85 per share, at December 31, 2025.

Shareholders’ equity at September 30, 2026 included a cumulative increase of $12.3 billion from the effect of changes in discount rate assumptions on insurance reserves, compared with a corresponding cumulative increase of $8.0 billion at

December 31, 2025, and a net unrealized loss on investment securities and derivatives of $5.0 billion, compared with a net unrealized loss of $1.8 billion at December 31, 2025. Shareholders’ equity at September 30, 2026 also included an unrealized foreign currency translation loss of $4.9 billion, compared with an unrealized foreign currency translation loss of $4.8 billion at December 31, 2025. The annualized return on average shareholders’ equity in the third quarter of 2026 was 4.1%.

Shareholders’ equity excluding accumulated other comprehensive income (adjusted book value(1)) was $26.9 billion, or $54.21 per share, at September 30, 2026, compared with $28.0 billion, or $54.06 per share, at December 31, 2025. Adjusted book value excluding foreign currency remeasurement(1) was $20.2 billion, or $40.73 per share, at September 30, 2026, compared with $22.1 billion, or $42.66 per share, at December 31, 2025. The annualized adjusted return on equity excluding foreign currency remeasurement(1) in the third quarter of 2026 was 23.7%.

In the first nine months of 2026, Aflac Incorporated repurchased $2.8 billion, or 24.3 million of its common shares. At September 30, 2026, the Company had 90.0 million remaining shares authorized for repurchase.

(1)See the Results of Operations section of this MD&A for a definition of this non-U.S. GAAP financial measure.

(2) Yen/dollar exchange rates are based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).

Cyber Incidents

As previously disclosed, the Company identified an incident involving unauthorized access to a limited number of its systems in the U.S. on June 12, 2025 (the June 2025 U.S. Cyber Incident). The Company remains in communication with regulators and other relevant authorities.

Based on the information currently available, as of the date of this report, the Company does not believe that the June 2025 U.S. Cyber Incident is reasonably likely to have a material impact on the Company’s financial condition or results of operations. The Company continues to assess the financial impact of the June 2025 U.S. Cyber Incident, including how much of the financial impact will be covered by insurance. As a result of the June 2025 U.S. Cyber Incident, the Company has incurred certain costs and may, depending on future developments, incur additional costs, including but not limited to: costs to provide credit monitoring, identity theft protection, and Medical Shield to impacted individuals; incident response costs; expenses arising from litigation, governmental investigations, or potential enforcement actions; expenses related to compliance, finance, and legal advisory services; elevated cybersecurity insurance premiums; and costs incurred in meeting evolving legal and regulatory requirements concerning cybersecurity governance, monitoring, and disclosure. Based on the information currently available, as of the date of this report, the Company believes that the potential amount of loss cannot be reasonably estimated.

As previously disclosed, Aflac Japan detected an unauthorized third-party had accessed certain Aflac Japan systems on June 25, 2026 (the June 2026 Japan Cyber Incident). Aflac Japan remains in communication with regulators and other relevant authorities. Based on the information currently available, as of the date of this report, the Company believes that the potential amount of loss cannot be reasonably estimated.

The June 2026 Japan Cyber Incident is limited to systems in Japan. The Company’s systems related to its U.S. business were not accessed by the unauthorized third-party. Based on the information currently available, as of the date of this report, the Company does not believe that the June 2026 Japan Cyber Incident is reasonably likely to have a material impact on the Company’s financial condition or results of operations.