Then Max Brodén, Senior Executive Vice President and Chief Financial Officer, Aflac Incorporated, will provide more detail on this quarter's financial results, including our capital and liquidity. These topics are also addressed in the materials we posted with our earnings release, financial supplement, and quarterly CFO video update on investors.aflac.com. As I mentioned earlier, the earnings release with reconciliations of certain non-U.S. Aflac Incorporated reported net earnings per diluted share of $1.98 and adjusted earnings per diluted share of $1.75.
With this in mind, I'm pleased with Aflac Japan's sales increase of a 25.5% increase for the first quarter. Turning to Aflac U.S., I am encouraged by the 2.9% year-over-year increase in sales and the momentum we are seeing within all areas of our group business, especially our group voluntary products. We continue to focus on driving our profitable growth with strong underwriting discipline and maintaining strong premium persistency. has continued its prudent approach to expense management and maintaining a strong pre-tax margin, as Max will expand upon shortly.
We generated strong capital and cash flows on an ongoing basis while maintaining our commitment to prudent liquidity and capital management. Our financial strength is the foundation that backs up our promise to our policyholders, balanced with the financial flexibility and tactical capital deployment. I am very pleased with the company's financial strength, which supports our capital deployment. We treasure our 43 consecutive years of dividend increases and remain committed to extending this record.
| Metric | Period | Current guidance |
|---|---|---|
| Japan total benefit ratio | FY2026 | 60%-63% |
| U.S. total benefit ratio | FY2026 | 48%-52% |
| Japan underlying earned premium growth | FY2026 | -1% to -2% |
| Japan sales | FY2026 | expected higher than 2025; CEO target closer to JPY 80 billion |
| Corporate and Other pre-tax earnings | Q2 2026 | expected slightly negative |
| Metric | YoY | Note |
|---|---|---|
| Adjusted EPS | +6.6% ex-FX to $1.77 | Focused execution of strategy; reported adjusted EPS $1.75, net EPS $1.98 |
| Japan net earned premiums (yen) | -3.8% | Impact of reinsurance, paid-up policies and deferred profit liability; underlying down 1.3% |
| Japan total benefit ratio | -290 bps to 62.9% | Favorable cancer and hospitalization trends plus ~70 bps from reserve remeasurement gains above plan |
| Japan pre-tax margin | +320 bps to 35% | Favorable benefit ratio and expense trends |
| U.S. net earned premiums | +3.5% | Strong premium persistency of 79.3% and group voluntary growth |
| U.S. total benefit ratio | -50 bps to 47.2% | Favorable incurred claims for individual voluntary benefits and group disability; ~230 bps from remeasurement gains, ~80 bps above plan |
| U.S. pre-tax margin | -40 bps to 20.4% | Compared against a strong quarter a year ago |
| Adjusted ROE | — | 12.8% reported, 16.4% excluding foreign currency remeasurement, a solid spread to cost of capital |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| External reinsurance in Japan | Started with a reinsurance deal with another company, then took it internally | Aflac Re Bermuda assumed a block of whole life annuities from Japan Post effective March 31; strategic milestone expected to be material over time | — |
| Japan sales and marketing transformation | 2025 transformation drove strong sales momentum | Q1 sales up 25.5% across all distribution channels; three products (Miraito, Anshin Palette, Tsumitasu) sold concurrently | — |
| U.S. group business shift | Investment in dental/vision and group life, absence and disability | Group products up 12.4%; combined with consumer markets up 25%; dental/vision up 52%; core agent business slightly down to flat | — |
| Capital deployment | Highest return on capital and lowest cost of capital in the industry | $1.3 billion returned in Q1; 43 consecutive years of dividend increases; leverage 21.2% within 20%-25% target | — |