AFLAC Incorporated

Good morning and welcome to the ASLAC Incorporated Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal conference specialist for person star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchstone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to David Young, Vice President of Investor and Rating Agency Relations. Please go ahead.

Good morning and welcome. This morning we will be hearing remarks about the third quarter related to our operations in Japan and the United States from Dan Amos, Chairman and CEO of Aflac Incorporated, and Fred Crawford, President and COO of Aflac Incorporated. Max Brodin, Executive Vice President and CFO of Aflac Incorporated, will provide an update on our financial results and current capital and liquidity, which can also be found with the materials that we posted along with our earnings release and financial supplement on investors.athlac.com. We also posted under financials on the same site, updated slides of investment details related to our commercial real estate and middle market loans. In addition, Max provided his quarterly video update, which you will find there also. Other members of our executive management team who are joining us for Q&A include Virgil Miller, President of Aflac US. Charles Lake, Chairman and Representative Director, President of Aflac International. Masatoshi Kuide, President and Representative Director, Aflac Life Insurance Japan. Brad Dislin, Global Chief Investment Officer, President of Aflac Global Investments. Before we begin, Some statements in this teleconference are forward-looking within the meaning of federal securities laws. Although we believe these statements are reasonable, we can give no assurance that they will prove to be accurate because they are perspective in nature. Actual results could differ materially from those we discussed today. We encourage you to look at our annual report on Form 10-K for some of the various risk factors that could materially impact our results. As I mentioned earlier, the earnings release is available on investors.aflac.com. and includes reconciliations of certain non-US GAAP measures. I'll now hand the call over to Dan. Dan?

Thank you, David. Good morning. We're glad you joined us. Reflecting on the third quarter of 2023, our management team, employees, and sales distribution have continued to work tirelessly as dedicated stewards of our business. This has allowed us to be there for the policyholders when they need us most, just as we promised. Aflac Incorporated delivered very strong earnings for both the quarter and for the first nine months. Beginning with Japan, I am pleased with our 12.4% year-over-year increase in sales, which was largely driven by a nearly 23% increase in cancer insurance sales with a significant contribution from Japan Post Company and Japan Post Insurance. I am also pleased to see continued improvements in cancer insurance sales through our other alliances, Daiichi Life and Dido Life. These alliance partners, along with agencies and banks, combine to form our extensive distribution channels that are so important to being where the customer wants to buy insurance and providing them with financial protection. We continue to work hard to support each channel. We also introduced our new medical insurance product on September the 19th. The product design is simple to appeal to younger policyholders with basic needs and older or existing policyholders who desire additional or updated coverage. While it's too early to evaluate the success of this product launch, early indications show that it's being well received. We continue to gain new customers through Waze and child endowment, while also increasing opportunities to sell our third sector products. Since the launch of our refreshed Waze product, approximately 80% of our sales are to younger customers below the age of 50, and the level of concurrent third sector sales remains approximately 50%. Thus, for our product strategy in Japan, has served us well and I'm encouraged by our progress so far. Turning to the U.S., I'm encouraged by our sales increase of 7.5% in the quarter. This reflects continued productivity improvements and the contribution from our growth initiatives of group life and disability consumer markets, network dental and vision. We remain focused on driving scale, stabilizing new platforms, and leveraging our ability to bundle essential product lines as we work with brokers on larger groups. Agents and brokers contributed to the growth of our individual business. Our group platform benefited significantly from the sales of group life and disability. I am very excited about our new cancer protection assurance policy, which provides enhanced benefits at no additional cost. We know that when people experience the value of our products, it increases persistency, which benefits our policyholders and lowers our expenses. I believe that the need for our products and solutions we offer is strong, or stronger than ever before in both Japan and the United States. We are leveraging every opportunity and avenue to share this message with consumers, particularly given that our products are sold, not bought. As we communicate the value of our products, we know that a strong brand alone is not enough. We must paint a better picture of how our products help address the gap that people face when they get medical treatments, even though they may have major medical insurance. Knowing our products help lift people up when they need it most is something that makes all of us at Aflac very proud and propels us to do more and achieve more. We continue to reinforce our leading position and build on that momentum. As always, we are committed to prudent liquidity and capital management. We continue to generate strong investment results while remaining in a defensive position as we monitor evolving economic conditions. In addition, we have taken proactive steps in recent years to defend our cash flow and deployable capital against a weakening yen. As an insurance company, our primary responsibility is to fulfill the promises we make to our policyholders. At the same time, we're listening to our shareholders in understanding the importance of prudent liquidity and capital management. We remain committed to maintaining strong capital ratios on behalf of the policyholder and balance this financial strength with tactical capital deployment. I am very pleased with the Board's declaration of the fourth quarter dividend in declaring this dividend of 2023 marks the 41st consecutive year of dividend increases a record that we treasure. I am even more pleased with the board's action to increase the first quarter of 2024 dividend by 19% to 50 cents per share. We also remain in the market purchasing shares at a historically high level of $700 million as seen in the first two quarters of this year. We intend to continue prudently managing our liquidity and capital to preserve the strength of our capital and cash flows, which support both our dividend track record and tactical share repurchase. Overall, I think we can say that it has been a very strong quarter, especially when a vast number of factors are in our favor. Affleck Japan had a strong quarter for sales as we executed product and distribution strategy. Affleck U.S. continued to build on its momentum as it nears pre-pandemic levels. Pre-tax profit margins remain strong in both Japan at 32.8% and the U.S. at 28.8%. Plus our capital ratios remain very strong and our quarterly share repurchase was, like last quarter, one of the largest in the company's history. Before I hand it over to Fred, I want to address an announcement of his retirement. I've enjoyed working closely with Fred over the last eight years and certainly understand his desire to retire and spend more time with the family and personal interests. Fred, you will be missed, and I look forward to working with you and Aflac's executive team to ensure a smooth transition until your official retirement date. And I wish you many happy years. As for me and the company, we have some outstanding candidates who are capable of running AFLAC. It is my responsibility to continue to train and watch the progress of these potential heir apparent while the board oversees the process. To be prepared for any unknowns, we have always had an interim CEO ready should something abruptly happen to me, as well as a strong process within the board's corporate governance committee. I recently had a physical at Emory University and received an excellent report. So I plan on being around to prepare our leaders for the future and drive shareholder value. With that, I'll now turn the program over to Fred. Fred?