AFLAC Incorporated

And welcome to the AFLAC Incorporated fourth quarter year end 2023 earnings and 2024 outlook 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 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 of Investor and Rating Agency Relations for Aflac Incorporated. Please go ahead.

Good morning and welcome. This morning, we will be hearing remarks about earnings for 2023, as well as our outlook for 2024. First, 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, as well as our outlook for 2024. 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, 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 prospective 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-U.S. gap measures. I'll now turn the call over to Dan. Dan?

Thank you, David, and good morning, everyone. We're glad you're joining us. Reflecting on 2023, it was a very good year. Our management team, employees, sales distribution have continued to work tirelessly as dedicated stewards of our business. This has allowed us to be there for our policyholders when they need us most, just as we promised. Aflac Incorporated delivered a very strong earnings for the year. Net earnings per diluted share for 2023 were $7.78. Adjusted earnings per diluted share was $6.23. We're the best in the company's history, despite the weakening yen and the impact of the reinsurance retrocession late in the fourth quarter. Beginning with Japan, Applite Japan generated solid overall financial results in 2023. For the year, total adjusted revenues declined 3.6% to nearly 1.5 trillion yen, largely reflecting the impacts of reinsurance and paid-up policies. But this was largely offset by a 7.3% decrease in total benefits and adjusted expenses. Pre-tax adjusted earnings increased 6% to nearly 457 billion yen for the year. As a result, Affleck Japan produced an extremely strong profit margin of 30.5%. I am pleased with Affleck Japan's 10.9% year-over-year increase in sales. which was largely driven by a 26% increase in cancer insurance sales, with very significant contributions from Japan Post Company and Japan Post Insurance, as well as other alliances, Daiichi Life and Daido Life. As you may recall, Affleck Japan aims to have a product lineup to meet customers' needs during any life stage. Our latest medical insurance is designed to appeal to younger policyholders, basic needs, and older and existing policyholders who want additional or updated coverage. While our medical insurance sales were off for the year, they increased 6.5% year over year in the fourth quarter following the introduction of our new medical insurance product in mid-September. Similarly, Appalachia Pan refreshed Waze and child endowment in 2022 as a way of acquiring younger customers and also introducing opportunities to sell our core third sector products to them. Since the launch of our refreshed Waze product, approximately 80% of our sales are to younger customers below the age of 50. The level of concurrent third sector sales remains above 50%. Given Japan's demographics, our product strategy is to fit the needs of the customers at any stage in life. Acquiring younger customers is critical to our success, along with our intense focus on being where the customer wants to buy insurance. We have a broad network of distribution channels, including agencies, alliance partners, and banks. This reach continually optimizes opportunities to help provide financial protection to the Japanese consumers. We are working hard to support each channel. While the market presents challenges, we expect to reach 67 billion to 73 billion of sales in Japan by the end of 2026. Turning to the U.S., We also generated strong overall financial results in 2023. Total adjusted revenues increased 2.1% to $6.6 billion. The decline in total net benefits and claims was slightly offset by the increase in adjusted expenses. Pre-tax adjusted earnings increased 10.4% to an all-time high of $1.5 billion for the year. As a result, Aflac US produced an extremely strong profit margin of 22.7%. Aflac US sales increased 5% in 2023, which was at the lower end of our expectations. As you know, we've been focused on increasing persistency to grow profitable earned premiums. In addition, we continually evaluate new business to ensure that it is profitable. During the fourth quarter, we made some tactical decisions to avoid sales opportunities to certain less profitable, larger accounts like those of high turnover. At the same time, we focused on updating our products to ensure that our policyholders continue to realize the value of our products provides. As part of our efforts, we introduced our new cancer protection assurance policy in the second quarter of 2023. Since that time, our cancer insurance have increased nearly 25%. 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 the products and the solutions we offer are as strong or stronger than ever before in both Japan and in 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 the strong brand alone is not enough. We must paint a better picture of how our products help address the gap that people face, even when they have major medical insurance. Knowing our products help lift people up when they need us 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. We are confident that the successful execution of our strategy will lead to sales of at least $1.8 billion in the US by the end of 2025. I'd like to end on addressing our ongoing commitment to prudent liquidity and capital management. We have taken proactive steps in recent years to defend our cash flow and deployable capital against a weakening yen. At the end of 2023, we had nearly $2.8 billion of liquidity at the holding company, which was more than $1 billion over the minimum balance. 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 our policyholders and balance this financial strength with the 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 the dividend track record and the tactical share repurchase. 2023 marked the 41st consecutive year of dividend increases. We treasure our track record of dividend growth and remain committed to extending it. Last quarter, the board put us on a path to continue this record when it increased the first quarter of 2024 dividend 19% to 50 cents. We also remained in the market repurchasing our shares, through 2023 at a historically high level of $700 million per quarter. We have remained tactical in our approach to share repurchase, deploying $2.8 billion in capital to repurchase nearly 39 million of our shares in 2023. Combined with dividend, this means we delivered over 3.5 $8 billion back to the shareholders in 2023 while also investing in the growth of our business. At the same time, we have maintained our position among companies with the highest return on capital and the lowest cost of capital in the industry. Overall, I think we can say that it's been another strong year. I'll now turn the program over to Max, who will cover more details of the financial results for this year and provide an outlook for the key drivers of earnings in 2024. Max?