AFLAC Incorporated

Good day and welcome to the AFLAC Incorporated Second 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 then one on a touchtone 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. Thank you for joining us for Aflac Incorporated's second quarter earnings call. While I have your attention, I also want you to mark your calendars to join us for our financial analyst briefing at the New York Stock Exchange on December 3rd. Now, 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 in 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. In addition, Max provided his quarterly video update, which also includes information about the outlook for 2024. 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.aflac.com and includes reconciliations of certain non-US GAAP measures. I'll now hand the call over to Dan.

Thank you, David, and good morning. And we're glad you joined us. Aflac Incorporated delivered another quarter and six months of very solid earnings results. Net earnings per diluted share were $3.10 for the quarter and $4.64 for the first six months. On an adjusted basis, earnings per diluted share for the quarter were up 15.8% to $1.83. And for the first six months, we were up 11.5% to $3.49. From a broad operational perspective, we've generated profitable growth in the United States and Japan with new products and distribution strategies. We believe our strategy will continue to create long-term value for the shareholders. At the same time, we believe that the need for our products we offer is as strong or stronger than it has ever been before in both the United States and Japan. Beginning with Japan, We have continued to focus on third sector products, like our cancer insurance product called WINGS. As the new fiscal year began in Japan, we saw continued improvement in cancer insurance through the Japan Post channel. We have continued our strategy of introducing life insurance products, including Sumitatsu, which we launched on June 2nd. This product offers policyholders an asset formation component with nursing care option. It was designed to attract new and younger customers while also introducing opportunities to sell them our core third sector products. While still very early, we are pleased with how our agencies have sold this product, which drove a 4.5% sales increase for the second quarter. Being where consumers want to buy insurance remains an important element of the 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 the Japanese consumers. We will continue to work hard to support each channel. Overall, Koide-san and his team have done a great job of turning around sales in Japan and delivering record profit margins for the quarter. I am very pleased with their efforts. Turning to the U.S., we achieved a 2% sales growth for the quarter benefiting from good growth in group life absent management and disability and individual voluntary benefits. This is a welcome result as we enter the second half of the year that tends to be the heaviest enrollment period. At the same time, we continue to focus on more profitable growth by exercising a stronger underwriting discipline. Additionally, we've increased benefits in certain policies to improve the value for the policyholder. We believe persistency will remain strong as customers realize the value of their policies and the related benefits. We have also continued our disciplined approach to expense management, which Max will address. As we enter the second half of the year, we are continuing to focus on optimizing our dental and vision platforms. Overall, I'm pleased with what Virgil and his team are doing to balance profitable growth, enhance the value proposition for the policyholders, and curb the expense ratio. Their efforts contributed to the very strong pre-tax profit margin of 22.7% for the second quarter. Now I'll turn to our ongoing commitment to prudent liquidity and capital management. Max has done a great job leading his team to take proactive steps in recent years to defend our cash flow and deployable capital against weakening yen, as well as establishing our reinsurance platform in Bermuda. We have been very pleased with our investment portfolio's performance as it continues to produce strong net investment income with minimal losses and impairments. As an insurance company, our primary responsibility is to fulfill the promises we make to our policyholders while being responsive to the needs of our 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 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 and third quarter dividends of 50 cents. We repurchased a record $800 million in shares during the quarter and intend to continue our balanced, 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 business. Being there for the policyholders when they need us most, just as we promised, this underpins our goal of providing customers with the best value in the supplemental insurance products in the United States and Japan. In November, we celebrate our 50th year of doing business in Japan. Additionally, in June, we celebrated our 50th year as a publicly traded company on the New York Stock Exchange. We are reminded that one thing has not changed since the founding in 1955. Families and individuals still seek to protect themselves from financial hardships that not even the best health insurance covers. Today's complex healthcare environment has produced incredible medical advances that come with incredible costs. It's more important than ever to have that partner. We believe our approach to offering relevant products makes us that partner. We believe in the underlying strengths of our business and our potential for continued growth in Japan and the United States, two of the largest life insurance markets in the world. AFLAC is well positioned as we work toward achieving our long-term growth while also ensuring we deliver on our promise to our policyholders. I'll now turn the program over to Max to cover in more details the financial results.