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Aflac reported adjusted third-quarter earnings of $2.43 per diluted share; an actuarial-assumption review added $0.71 per share, while cybersecurity costs and below-expectation variable investment income weighed on results.
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Aflac raised its 2026 Japan pretax profit margin outlook to 35%–38%. Japan sales declined 4% in the quarter amid a temporary pause in sales initiatives after a cyber incident, but activities resumed in September and October sales met expectations.
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Aflac Japan ceded about 500 billion yen of cancer reserves to its Bermuda affiliate, which the company estimates will free up roughly $1 billion in capital over time. A $2.3 billion Japanese government bond repositioning is expected to add more than $30 million to annual investment income.
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Aflac (NYSE:AFL) raised its full-year profit margin outlook for Japan after reporting third-quarter earnings that benefited from changes to actuarial assumptions and a reinsurance transaction that it expects to free up capital.
The insurer reported net earnings of $0.61 per diluted share and adjusted earnings of $2.43 per diluted share, Chairman and CEO Dan Amos said on the company’s earnings call. Chief Financial Officer Max Brodén said adjusted earnings per share were $2.46 excluding the effect of foreign currency, down 1.2% from a year earlier on that basis.
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The quarterly review of actuarial assumptions increased earnings per share by $0.71, Brodén said. Results also included $40 million, or $0.06 per share, in cybersecurity expenses and enhancements in Japan. Variable investment income was $22 million, or $0.03 per share, below the company’s long-term return expectations.
Japan Sales Recover After Cybersecurity Disruption
Aflac Japan sales fell 4% to 18.8 billion yen in the third quarter, compared with a year-earlier period that followed the launch of Miraito Cancer Insurance. Sales increased 3% for the first nine months of 2026, and Amos said the company continues to expect full-year Japan sales to exceed 2025 levels.
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Koichiro Yoshizumi, executive vice president of sales and marketing and alliance strategy at Aflac Life Insurance Japan, said through a translator that the company had suspended initiatives including direct mail and outbound customer calls while prioritizing customer support after a cyber incident. Those activities resumed in September, and sales returned to normal in the fourth quarter, he said. October sales were in line with expectations.
