AFLAC Incorporated

Good day and welcome to the AFLAC Incorporated First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the 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 and one on a touch-tone phone. To withdraw your question, Please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to David Young, Vice President, Investor and Rating Agency Relations. Please go ahead.

Good morning and welcome. Thank you for being here a bit earlier than our usual start time. This morning, Dan Amos, Chairman, CEO, and President of Aflac Incorporated, will provide an overview of our results and operations in Japan and the United States. Then Max Brodin, Executive Vice President and CFO of Aflac Incorporated, will provide an update on our financial results and current capital and liquidity. These topics are also addressed in the materials we posted with our earnings release and financial supplement on investors.aflac.com, including Max's quarterly video update. We also posted under financials on the same site, updated slides of investment details related to our commercial real estate and middle market loans. For Q&A today, we are also joined by 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, and 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.athlac.com and includes reconciliations of certain non-U.S. GAAP measures. I'll now hand the call over to Dan.

Thank you, David, and good morning. And we're glad you joined us at this earlier hour. The first quarter marked a good start for the year in terms of earnings, but proved to be challenging for sales. Aflac Incorporated delivered another solid earnings results. Net earnings per diluted share for the quarter were $3.25. On adjusted basis, earnings per diluted share were up 7.1% to $1.66. Beginning with Japan, our latest medical insurance launch in September of 2023. We are encouraged by the success that independent corporate and individual agencies have had in marketing this product, especially to the younger individuals. However, we clearly need to make better progress and plan on doing so. Cancer insurance sales, however, were modestly better year over year. We entered the final stage of our new cancer insurance launch in April of 2023 through the Japan Post Channel, while we saw a significant and understandable year-over-year increase in cancer insurance sales through Japan Post Channel. We expect to see improvement with the start of the new fiscal year as they cross-sell athletic cancer insurance along with the new Japan post-life insurance product. Being where customers want to buy insurance remains an important element of our growth strategy in Japan. Our broad network of distribution channels, including agencies, alliance partners, and banks, continually optimize opportunities to help provide financial protection to Japanese consumers. We will continue to work hard to support each channel. In addition, we are initiating sales campaigns around our 50th anniversary in Japan starting this quarter. Let me be clear, we have not lowered our sales outlook for 2024 and still expect to achieve it. With the launch of the new policy this quarter, Koide-san and his team are working hard achieving that objective. In addition, we have maintained disciplined underwriting and expense management to continue driving strong pre-tax profit margins of 32.8%. Turning to the U.S., as you've seen in prior years, the first quarter tends to generate the lowest sales of the year. we have focused on driving more profitable growth by exercising a stronger underwriting discipline. We are deliberately avoiding sales opportunities to certain less profitable accounts. While this appears to have a temporary impact on sales in the first quarter, we're seeing positive results in net earned premium growth, which grew 3.3%. At the same time, we have increased benefits in certain cases to improve value for the policyholders. We believe persistency will continue to improve as customers realize the value of their policies and the related benefits. We are pleased with the 80 basis points improvement in persistency this quarter. I believe that the need for the products we offer is as strong or stronger than it has ever been before in both Japan and the United States. We continue to work to restore our momentum and reinforce our leading position as we aim to exceed 1.8 billion of sales by the end of 2025. We have also continued our disciplined approach to expense management. We are beginning to see progress on our expense ratio in group life and disability, and consumer markets continue to grow and scale. We are continuing to focus on optimizing our dental and vision platform and expect to see stronger second half sales this year. At the same time, we have maintained a strong pre-tax margin of 21%. Overall, I'm very pleased with what Virgil and his team are doing to balance profitable growth, enhance the value of the proposition of our policyholders, and curb the expense ratio. I'd like to end on addressing our ongoing commitment to prudent liquidity and capital management. I'm very pleased with how Max has led the team to take proactive steps in recent years to defend our cash flows and deployable capital against a weakening yen, as well as the establishment of our reinsurance platform in Bermuda. As an insurance company, our primary responsibility is to fulfill the promises we make to our policyholders while being responsive to the needs of the shareholders. We remain committed to maintaining strong capital ratios on behalf of the policyholders. We balance this financial strength with tactical capital deployment. We intend to continue prudently managing our liquidity and capital to preserve the strength of our capital and cash flows. This supports both our dividend track record and our tactical share repurchase. We treasure our track record of 41 consecutive years of dividend growth and remain committed to extending it. I am pleased that the board set us on a path to continue this record when it increased the first quarter 2024 dividend 19% to 50 cents and declared the second quarter dividend of 50 cents. We repurchased a record $750 million in shares in the first quarter and intend to continue our balanced and tactical approach of investing in growth and driving long-term operating efficiencies. Our management team, employees, and sales distribution continue to be dedicated stewards of our businesses, being there for our policyholders when they need us most, just as we promised. This underpins our goal of providing customers with the best value in the supplemental products in the United States and in Japan. In 2024, we celebrated our 50th year of doing business in Japan, and 50th year as a publicly traded company on the New York Stock Exchange. We are reminded that one thing has not changed since our founding in 1955. Families and individuals still seek to protect themselves from financial hardships that not even the best health insurance company covers. Today's complex health care environment has produced incredible medical advances that come with incredible costs. It's more important than ever to have a partner. We believe our approach to offering relevant products makes us that partner. We believe that in the underlying strengths of our business and our potential for continued growth in Japan and the U.S., two of the largest life insurance markets in the world, AFLAC is well positioned as we work toward achieving long-term growth while also ensuring we deliver on our promise to our policyholders. I'd now like to turn the program over to Max to cover more details of the financial results. Max?