AFLAC INC Quarterly Report for Q1 Ended Mar 31, 2017

Summary

Aflac Incorporated reported net earnings of $592 million for the first quarter of 2017, a decrease from $731 million in the same period of 2016. This decline was primarily driven by a significant shift in realized investment gains/losses, moving from a net gain of $30 million in Q1 2016 to a net loss of $140 million in Q1 2017. This was influenced by substantial net losses from derivatives and foreign currency activities. Despite the decrease in net earnings, Aflac's core insurance operations showed resilience. Net premiums, primarily from supplemental health insurance, saw a slight increase to $4.638 billion from $4.602 billion. The company's Japan segment, Aflac Japan, continues to be the primary revenue generator, contributing $3.194 billion in net earned premiums, while Aflac U.S. contributed $1.390 billion. The company repurchased approximately $600 million of its common stock in the first quarter of 2017, demonstrating a commitment to returning capital to shareholders. Management remains focused on its core business and navigating the current low-interest-rate environment, particularly in Japan.

Key Highlights

• 1Net earnings decreased to $592 million from $731 million year-over-year, largely due to unfavorable investment gains/losses.
• 2Realized investment gains/losses swung from a $30 million gain in Q1 2016 to a $140 million loss in Q1 2017, driven by derivative and foreign currency activities.
• 3Net premiums remained stable, increasing slightly to $4.638 billion from $4.602 billion.
• 4Aflac Japan remains the dominant segment, with net earned premiums of $3.194 billion, while Aflac U.S. generated $1.390 billion.
• 5The company repurchased $600 million of its common stock in Q1 2017, indicating continued capital return to shareholders.
• 6Diluted earnings per share decreased to $1.47 from $1.74 year-over-year.

Frequently Asked Questions