OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best has affirmed the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of Aflac Life Insurance Japan, Ltd. (Japan) (Aflac Japan), American Family Life Assurance Company of Columbus (Omaha, NE), American Family Life Assurance Company of New York (Albany, NY) and Continental American Insurance Company (Omaha, NE). These companies represent the life/health insurance subsidiaries of Aflac Incorporated (Aflac) (Columbus, GA) [NYSE: AFL] and are collectively referred to as Aflac Incorporated Group. Concurrently, AM Best has affirmed the Long-Term ICR of “a” (Excellent) and all existing Long-Term Issue Credit Ratings (Long-Term IRs) of Aflac. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the Long-Term IRs and shelf registration.)
The ratings reflect Aflac Incorporated Group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management (ERM).
Aflac Incorporated Group’s risk-adjusted capitalization is at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Additionally, Aflac’s entities maintain strong levels of risk-based capital (RBC) in the United States and a strong solvency margin ratio in Japan. Equity at Aflac has continued to grow as strong earnings have been accretive to capital, a trend which continued through the first half of 2025. The organization’s investment team manages foreign exchange risk via hedging programs. Aflac Incorporated Group’s invested assets are diverse across asset classes and types and are managed internally and through highly respected external asset managers. The group’s investment portfolio has continued to experience an increase in commercial transitional real estate delinquencies over the past few years, which has resulted in an uptick in company-owned real estate. AM Best acknowledges that the mortgage and real estate portfolio comprise a small but material portion of Aflac’s invested assets. Aflac’s financial leverage, as calculated by AM Best, was modest and was 22.3% at year-end 2024 and interest coverage is considered strong at more than 30 times. Operating leverage, composed of security lending programs and funding agreements from the Federal Home Loan Bank, was below 10% at year-end 2024. The group enjoys financial flexibility from its publicly traded parent, which includes access to multiple lines of credit: $100 million available on a 364-day credit facility and $1 billion available on a five-year unsecured revolving credit facility, as well as JPY 100 billion available on a five-year unsecured credit facility and $50 million available on a credit facility all with a consortium of banks. Additionally, Aflac has a number of intercompany credit agreements with its insurance entities. Aflac’s flexibility has been enhanced further through its reinsurance subsidiary, Aflac Re Bermuda Ltd, which assumes a modest portion of older cancer policy liabilities from Aflac Japan.
Aflac Incorporated Group has strong operating margins with steadily improving return-on-revenue (ROR) and return-on-equity (ROE) metrics over the past few years. The ROR was 40% for 2024, with a five-year average net ROR of 30%. The ROE was 22.6% in 2024, with a five-year average net ROE of 17.5%. Aflac’s consistent profitability is driven by strong underwriting and investment results. Aflac Japan is the principal contributor to the consolidated earnings and comprised over half of adjusted revenue for 2025. Aflac’s premiums have been trending downward the past few years due to slower sales and first sector limited pay policies reaching their paid-up status in Japan. However, this trend began to reverse in the first half of 2025 driven by increasing sales in the United States and new cancer product sales in Japan.
Aflac’s favorable business profile is supported by its market-leading position in Japan and its strong market presence in the United States. Aflac has strong brand recognition in Japan and the United States. Aflac is a market leader in both cancer and medical insurance in Japan and refreshes its product offerings to remain competitive. In the United States, Aflac remains a leader in the supplemental medical insurance market, especially products sold at the worksite. Aflac has expanded its product offerings and broadened its segment served in the United States over the past few years to remain competitive and to position the company for future growth.
Aflac’s ERM capabilities are very strong and embedded throughout the organization, which has impacted its balance sheet strength, operating performance and business profile positively. The ERM program has continued to demonstrate robust processes within its framework that are effective in identifying potential risks, managing those risks and mitigating them. Participation in the ERM program is at all levels of the organization and includes an embedded global risk appetite statement and a framework supporting its risk tolerance statements.
The following Long-Term IRs have been affirmed with stable outlooks:
Aflac Incorporated—
— “a” (Excellent) on JPY 12.4 billion, 0.3% senior unsecured notes, due 2025
— “a” (Excellent) on USD 300 million, 2.875% senior unsecured notes, due 2026
— “a” (Excellent) on USD 400 million, 1.125% senior unsecured notes, due 2026
— “a” (Excellent) on JPY 60 billion, 0.932% senior unsecured notes, due 2027
— “a” (Excellent) on JPY 12.6 billion, 0.5% senior unsecured notes, due 2029
— “a” (Excellent) on JPY 13.0 billion, 1.048% senior unsecured notes, due 2029
— “a” (Excellent) on JPY 33.4 billion, 1.075% senior unsecured notes, due 2029
— “a” (Excellent) on JPY 13.3 billion, 0.55% senior unsecured notes, due 2030
— “a” (Excellent) on USD 1.0 billion, 3.6% senior unsecured notes, due 2030
— “a” (Excellent) on JPY 29.3 billion, 1.159% senior unsecured notes, due 2030
— “a” (Excellent) on JPY 9.3 billion, 0.843% senior unsecured notes, due 2031
— “a” (Excellent) on JPY 27.9 billion, 1.412% senior unsecured notes, due 2031
— “a” (Excellent) on JPY 30 billion, 0.633% senior unsecured notes, due 2031
— “a” (Excellent) on JPY 20.7 billion, 0.75% senior unsecured notes, due 2032
— “a” (Excellent) on JPY 9.3 billion, 0.843% senior unsecured notes, due 2032
— “a” (Excellent) on JPY 21.1 billion, 1.32% senior unsecured notes, due 2032
— “a” (Excellent) on JPY 15.2 billion, 1.488% senior unsecured notes, due 2033
— “a” (Excellent) on JPY 12.0 billion, 0.844% senior unsecured notes, due 2033
— “a” (Excellent) on JPY 9.8 billion, 0.934% senior unsecured notes, due 2034
— “a” (Excellent) on JPY 7.7 billion, 1.682% senior unsecured notes, due 2034
— “a” (Excellent) on JPY 10.6 billion, 0.83% senior unsecured notes, due 2035
— “a” (Excellent) on JPY 10.0 billion, 1.039% senior unsecured notes, due 2036
— “a” (Excellent) on JPY 6.5 billion, 1.594% senior unsecured notes, due 2037
— “a” (Excellent) on JPY 8.9 billion, 1.75% senior unsecured notes, due 2038
— “a” (Excellent) on JPY 6.3 billion, 1.122% senior unsecured notes, due 2039
— “a” (Excellent) on USD 400 million, 6.90% senior unsecured notes, due 2039
— “a” (Excellent) on USD 450 million, 6.45% senior unsecured notes, due 2040
— “a” (Excellent) on JPY 10.0 billion, 1.264% senior unsecured notes, due 2041
— “a” (Excellent) on USD 400 million, 4.0% senior unsecured notes, due 2046
— “a-” (Excellent) on JPY 60 billion, 2.108% subordinated debentures, due 2047
— “a” (Excellent) on USD 550 million, 4.75% senior unsecured notes, due 2049
— “a” (Excellent) on JPY 20.0 billion, 1.56% senior unsecured notes, due 2051
— “a” (Excellent) on JPY 12.0 billion, 2.144% senior unsecured notes, due 2052
The following indicative Long-Term IRs have been affirmed with stable outlooks on securities available under the existing shelf registrations:
Aflac Incorporated—
— “a” (Excellent) on senior unsecured debt
— “a-” (Excellent) on subordinated debt
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
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