POLICY LIABILITIES

3 Months Ended

Mar. 31, 2026

Future Policy Benefits

The following tables present the changes in the present value of expected future net premiums and the present value of expected future policy benefits by reporting segment and disaggregated by product type. The present value of expected future net premiums and the present value of expected future policy benefits are presented gross of internal and external ceded reinsurance.


	March 31, 2026
	Aflac Japan								Aflac U.S.
(In millions)	Cancer		Medical and Other Health		Life Insurance		Other		Accident		Disability		Critical Care		Hospital Indemnity		Dental/ Vision		Life Insurance		Other
Present value of expected future net premiums:
Balance at December 31, 2025	$	12,207	$	10,349	$	4,547	$	725	$	2,525	$	1,685	$	3,945	$	1,171	$	202	$	1,021	$	1,968
Beginning balance at original discount rate	13,201		11,511		4,772		800		2,637		1,726		4,242		1,231		208		1,051		1,835
Effect of changes in cash flow assumptions	0		0		0		0		0		0		0		0		0		0		0
Effect of actual variances from expected experience	(147)		(84)		(14)		(3)		(23)		(2)		(29)		(14)		(2)		(9)		(16)
Adjusted beginning of period balance	13,054		11,427		4,758		797		2,614		1,724		4,213		1,217		206		1,042		1,819
Issuances	216		14		83		1		111		109		204		90		13		94		469
Interest accrual	86		68		26		4		27		18		44		12		2		11		27
Net premiums collected (1)	(314)		(247)		(179)		(22)		(119)		(100)		(143)		(61)		(10)		(44)		(50)
Foreign currency translation	(272)		(235)		(98)		(17)		0		0		0		0		0		0		0
Other	0		0		0		0		0		0		0		0		0		0		0
Ending balance at original discount rate	12,770		11,027		4,590		763		2,633		1,751		4,318		1,258		211		1,103		2,265
Effect of changes in discount rate assumptions	(1,252)		(1,402)		(303)		(86)		(148)		(62)		(360)		(75)		(9)		(42)		65
Balance at March 31, 2026	$	11,518	$	9,625	$	4,287	$	677	$	2,485	$	1,689	$	3,958	$	1,183	$	202	$	1,061	$	2,330
Present value of expected future policy benefits:
Balance at December 31, 2025	$	34,987	$	17,692	$	20,894	$	3,671	$	3,184	$	2,336	$	10,845	$	1,955	$	438	$	2,076	$	2,444
Beginning balance at original discount rate	36,438		21,979		25,716		4,758		3,348		2,401		11,812		2,071		458		2,288		2,304
Effect of changes in cash flow assumptions	0		0		0		0		0		0		0		0		0		0		0
Effect of actual variances from expected experience	(168)		(101)		(18)		(8)		(36)		(5)		(41)		(19)		(1)		(13)		(14)
Adjusted beginning of period balance	36,270		21,878		25,698		4,750		3,312		2,396		11,771		2,052		457		2,275		2,290
Issuances	221		15		85		2		116		115		215		95		14		100		474
Interest accrual	303		134		134		22		34		25		127		22		5		23		33
Benefit payments	(638)		(237)		(665)		(60)		(126)		(118)		(247)		(77)		(15)		(29)		(56)
Foreign currency translation	(750)		(452)		(525)		(98)		0		0		0		0		0		0		0
Other	0		0		0		0		0		0		0		0		0		0		0
Ending balance at original discount rate	35,406		21,338		24,727		4,616		3,336		2,418		11,866		2,092		461		2,369		2,741
Effect of changes in discount rate assumptions	(2,470)		(4,862)		(5,333)		(1,181)		(211)		(96)		(1,176)		(146)		(27)		(251)		63
Balance at March 31, 2026	32,936		16,476		19,394		3,435		3,125		2,322		10,690		1,946		434		2,118		2,804
Net liability for future policy benefits	21,418		6,851		15,107		2,758		640		633		6,732		763		232		1,057		474
Less: reinsurance recoverable	4,142		994		316		0		0		0		0		0		0		26		20
Net liability for future policy benefits after reinsurance recoverable	$	17,276	$	5,857	$	14,791	$	2,758	$	640	$	633	$	6,732	$	763	$	232	$	1,031	$	454

(1) Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected future benefit payments.


	December 31, 2025
	Aflac Japan								Aflac U.S.
(In millions)	Cancer		Medical and Other Health		Life Insurance		Other		Accident		Disability		Critical Care		Hospital Indemnity		Dental/ Vision		Life Insurance		Other
Present value of expected future net premiums:
Balance at December 31, 2024	$	14,184	$	11,817	$	5,156	$	846	$	2,497	$	1,635	$	3,901	$	1,122	$	196	$	909	$	826
Beginning balance at original discount rate	14,008		11,845		5,084		864		2,687		1,726		4,340		1,221		209		976		824
Effect of changes in cash flow assumptions	(661)		136		(40)		5		18		(22)		(163)		(8)		(10)		(5)		386
Effect of actual variances from expected experience	(436)		(84)		(62)		(12)		21		20		(2)		16		(10)		(32)		146
Adjusted beginning of period balance	12,911		11,897		4,982		857		2,726		1,724		4,175		1,229		189		939		1,356
Issuances	1,114		253		405		9		295		341		488		211		50		246		571
Interest accrual	364		292		110		16		110		69		177		50		9		42		73
Net premiums collected (1)	(1,379)		(1,076)		(795)		(95)		(487)		(402)		(590)		(255)		(39)		(171)		(138)
Foreign currency translation	193		146		70		13		0		0		0		0		0		0		0
Other	(2)		(1)		0		0		(7)		(6)		(8)		(4)		(1)		(5)		(27)
Ending balance at original discount rate	13,201		11,511		4,772		800		2,637		1,726		4,242		1,231		208		1,051		1,835
Effect of changes in discount rate assumptions	(994)		(1,162)		(225)		(75)		(112)		(41)		(297)		(60)		(6)		(30)		133
Balance at December 31, 2025	$	12,207	$	10,349	$	4,547	$	725	$	2,525	$	1,685	$	3,945	$	1,171	$	202	$	1,021	$	1,968
Present value of expected future policy benefits:
Balance at December 31, 2024	$	40,781	$	20,606	$	24,265	$	4,225	$	3,127	$	2,330	$	10,701	$	1,897	$	441	$	1,847	$	1,288
Beginning balance at original discount rate	37,856		21,957		26,330		4,765		3,386		2,466		12,013		2,073		477		2,126		1,293
Effect of changes in cash flow assumptions	(1,130)		108		(101)		74		47		(46)		(219)		(4)		(15)		(17)		399
Effect of actual variances from expected experience	(483)		(102)		(61)		(21)		9		5		(15)		8		(13)		(53)		148
Adjusted beginning of period balance	36,243		21,963		26,168		4,818		3,442		2,425		11,779		2,077		449		2,056		1,840
Issuances	1,138		260		417		14		300		355		503		217		50		254		574
Interest accrual	1,299		564		569		91		138		99		515		87		20		87		97
Benefit payments	(2,723)		(1,044)		(1,753)		(218)		(532)		(478)		(985)		(310)		(61)		(109)		(207)
Foreign currency translation	481		236		315		53		0		0		0		0		0		0		0
Other	0		0		0		0		0		0		0		0		0		0		0
Ending balance at original discount rate	36,438		21,979		25,716		4,758		3,348		2,401		11,812		2,071		458		2,288		2,304
Effect of changes in discount rate assumptions	(1,451)		(4,287)		(4,822)		(1,087)		(164)		(65)		(967)		(116)		(20)		(212)		140
Balance at December 31, 2025	34,987		17,692		20,894		3,671		3,184		2,336		10,845		1,955		438		2,076		2,444
Net liability for future policy benefits	22,780		7,343		16,347		2,946		659		651		6,900		784		236		1,055		476
Less: reinsurance recoverable	4,406		1,062		0		0		0		0		0		0		0		25		11
Net liability for future policy benefits after reinsurance recoverable	$	18,374	$	6,281	$	16,347	$	2,946	$	659	$	651	$	6,900	$	784	$	236	$	1,030	$	465

(1) Net premiums collected represent the portion of gross premiums collected from policyholders that is used to fund expected future benefit payments.

The following tables present the weighted-average interest rates and weighted-average liability duration (calculated using the original discount rate) by reporting segment and disaggregated by product type.


	March 31, 2026
	Aflac Japan				Aflac U.S.
	Cancer	Medical and Other Health	Life Insurance	Other	Accident	Disability	Critical Care	Hospital Indemnity	Dental/ Vision	Life Insurance	Other
Weighted-average interest, original discount rate (1)	3.8 %	2.5 %	2.1 %	1.8 %	4.1 %	4.4 %	4.5 %	4.5 %	4.4 %	4.0 %	5.5 %
Weighted-average interest, current discount rate (1)	3.8 %	4.4 %	3.5 %	4.1 %	5.4 %	5.2 %	5.6 %	5.5 %	5.4 %	5.5 %	5.6 %
Weighted-average liability duration (years)	12.3	22.6	16.4	16.0	7.9	5.6	10.8	9.0	7.4	13.6	8.3

(1) The weighted-average interest rates are calculated using the reserve balances as the weights. No adjustments were made to observable market information.


	December 31, 2025
	Aflac Japan				Aflac U.S.
	Cancer	Medical and Other Health	Life Insurance	Other	Accident	Disability	Critical Care	Hospital Indemnity	Dental/ Vision	Life Insurance	Other
Weighted-average interest, original discount rate (1)	3.8 %	2.5 %	2.1 %	1.8 %	4.1 %	4.4 %	4.5 %	4.5 %	4.3 %	3.9 %	5.5 %
Weighted-average interest, current discount rate (1)	3.1 %	3.6 %	2.8 %	3.4 %	5.2 %	5.0 %	5.4 %	5.3 %	5.2 %	5.3 %	5.4 %
Weighted-average liability duration (years)	12.3	22.9	16.2	16.2	7.8	5.6	10.8	9.0	7.5	13.5	8.6

(1) The weighted-average interest rates are calculated using the reserve balances as the weights. No adjustments were made to observable market information.

The following table presents a reconciliation of the disaggregated rollforwards above to the ending liability for future policy benefits presented in the consolidated balance sheets. The deferred profit liability for limited-payment contracts and the deferred reinsurance gain liability are presented together with the liability for future policy benefits in the consolidated balance sheets and have been included as reconciling items in the table below.


(In millions)	March 31, 2026			December 31, 2025
Balances included in future policy benefits rollforward:
Aflac Japan
Cancer		$	21,418		$	22,780
Medical and other health		6,851			7,343
Life insurance		15,107			16,347
Other		2,758			2,946
Aflac U.S.
Accident		640			659
Disability		633			651
Critical care		6,732			6,900
Hospital indemnity		763			784
Dental/vision		232			236
Life insurance		1,057			1,055
Other		474			476
Corporate and other		4,593			4,317
Deferred profit liability		2,061			2,066
Deferred reinsurance gain liability		895			757
Intercompany eliminations (1)		(4,695)			(4,997)
Total		$	59,519		$	62,320

(1) Elimination entry necessary due to the internal reinsurance transactions with Aflac Re and to recapture a portion of policy liabilities ceded externally as a result of the reinsurance retrocession transaction. See Note 8 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report.

There were no changes to the inputs, judgments, assumptions or methods used in measuring the liability for future policy benefits during the three-month periods ended March 31, 2026 and 2025.

Discount Rate Methodology

The Company's discount rate methodology involves constructing a current discount rate curve separately for discounting cash flows used to calculate the Japan and U.S. LFPB, reflective of the characteristics of the insurance liabilities, such as currency and tenor. Discount rates are updated each reporting period and require estimation techniques (e.g., interpolation, extrapolation) for determination of points on the curve for which there is limited or no observable market data.

Discount rates are determined using upper-medium grade (low credit risk) fixed-income instrument yields that reflect the duration characteristics of the liability. Locked-in discount rates are determined separately for each issue-year cohort as a single discount rate, calculated as the weighted-average of monthly upper-medium grade (low credit risk) fixed-income instrument forward curves in the calendar year, where the weights are the annualized premiums issued for each month of the cohort. The single discount rate for each issue-year cohort is determined by solving for a rate that produces an equivalent NPR to the forward curve and will remain unchanged after the calendar year of issue.

In the Aflac Japan segment, all long-duration insurance policies are denominated in Japanese yen. A significant portion of policies are characterized by tenors exceeding the availability of liquid market data in Japan for single-A rated (as a proxy for upper-medium grade) corporate Japanese yen-denominated debt. The discount rate curve is designed to prioritize the observable inputs where available, while past the last liquid point, the data is derived based on estimation techniques consistent with the fair value guidance in ASC 820. The Aflac Japan segment's curve utilizes liquid market indices tracking publicly traded Japanese yen-denominated single-A corporate debt for the initial 10-year tenor. For the bonds within these market indices where only local ratings are available, the Company prioritizes the bonds with local ratings that are equivalent to a single-A rating based on international rating standards.

For the discount rates applicable to tenors for which the Japan single-A debt market is not liquid but there is sufficient observable market data and/or the observable market data is available for similar instruments (between 10 and 30 years), the Company estimates tenor-specific single-A credit spreads and applies them to risk-free government rates. Lastly, for the tenors where there is limited or no observable single-A or similar market data or risk-free government rates (beyond 30 years), the discount curve is derived by extrapolation of risk-free rates beyond their last liquid point following the Smith-Wilson method and grading of the estimated forward credit spread anchored by the ultimate forward rate. The ultimate forward rate is based on the economic value-based solvency regime, which is consistent with the International Association of Insurance Supervisors (IAIS) Insurance Capital Standards (ICS) (effective for Aflac Japan's 2025 fiscal year-end, which is March 31, 2026), and is adjusted for credit and inflation components.

For the Aflac U.S. segment where all long-duration insurance policies are denominated in U.S. dollars and substantially all have cash flow duration within 30 years, for which the U.S. upper-medium grade fixed-income market is liquid and observable, the Company uses data from a liquid fixed-income market index tracking single-A U.S. corporate debt. For the insignificant portion of the policies with cash flow tenors exceeding 30 years, the discount curve beyond that tenor is extrapolated following the Smith-Wilson method from year 30 to the same ultimate forward rate calculated for the Japan discount curve at year 60 and held constant thereafter. The use of the same ultimate rate for U.S. and Japan segments is based on the assumption of long-term global economic convergence.

There were no changes to the methods used to determine the discount rates during the three-month periods ended March 31, 2026 and 2025.

Cash Flow Assumptions

Cash flow assumptions include (1) mortality, (2) morbidity and (3) termination or lapses.

Mortality rate assumptions are based on industry tables and adjusted for the Company's actual or expected experience. These assumptions typically vary by age, gender, and other demographic characteristics such as smoking status.

Morbidity assumptions are based on the Company's internal data and consider emerging experience. These assumptions are reflective of the coverage and benefits provided and generally vary by age, gender, duration, and any other material policyholder characteristics. In cases where a calendar-year trend is significant, future cash flow projections may include a trend adjustment.

In Japan, separate lapse assumptions are set based on actual or expected experience. These lapse and total termination rate assumptions vary by line of business and with policyholder characteristics such as duration. In the U.S., the majority of the future cash flows are modeled using total termination rates (which include both lapse and mortality) and are adjusted for actual experience. Policy provisions, such as reaching premium paid-up status, are taken into account when setting assumptions.

The Company evaluates actual experience compared with expected experience for cash flow assumptions each quarter.

•For the three-month periods ended March 31, 2026 and 2025, the variance of actual experience from expected experience was primarily due to favorable variances in morbidity assumptions as compared to actual experience.

The Company performs a more detailed annual review of its assumptions annually during the third quarter.

•In 2025, the Company's annual assumption review process resulted in favorable changes largely due to favorable morbidity assumptions in Japan and favorable morbidity and termination assumptions in the U.S.

Favorable morbidity experience has been reflected in the annual assumptions primarily due to lower utilization of certain cancer benefits, including reduced hospitalizations and fewer first-occurrence claims influenced by COVID-19-related behavioral changes. While recognizing ongoing uncertainty, management has reviewed these trends and incorporated elements of the observed experience into its assumptions where considered appropriate.

The following table summarizes the amount of net earned premiums recognized in the consolidated statements of earnings by reporting segment and disaggregated by product type.


	Three Months Ended March 31,
(In millions)		2026		2025
Net earned premiums:
Aflac Japan
Cancer		$	816	$	839
Medical and other health		495		529
Life insurance		298		316
Other		29		32
Aflac U.S.
Accident		305		311
Disability		374		352
Critical care		444		441
Hospital indemnity		183		184
Dental/vision		58		49
Life insurance		198		169
Other		63		49
Corporate and other		182		198
Reinsurance ceded		(135)		(88)
Total		$	3,310	$	3,381

The following table summarizes the amount of interest expense related to insurance contracts recognized in benefits and claims, excluding reserve remeasurement in the consolidated statements of earnings by reporting segment and disaggregated by product type.


	Three Months Ended March 31,
(In millions)		2026		2025
Interest expense:
Aflac Japan
Cancer		$	217	$	233
Medical and other health		66		66
Life insurance		108		114
Other		18		18
Aflac U.S.
Accident		7		7
Disability		7		7
Critical care		83		85
Hospital indemnity		10		9
Dental/vision		3		3
Life insurance		12		11
Other		6		6

Total		$	537	$	559

The following tables present the amount of expected future gross premiums and expected future policy benefits and expenses (undiscounted and discounted at the current period discount rate) by reporting segment and disaggregated by product type. These tables are presented gross of internal and external ceded reinsurance.

Future gross premiums represent the expected amount of future premiums to be received. For limited-payment policies, the premiums are collected over a shorter period than the policy term over which benefits are provided. As a result, once the policy reaches premium paid-up status, the future gross premiums can be significantly less than the future benefit payments. Further, benefits and expenses are generally greater in the later years of a policy. These are the primary factors that result in future gross premiums lower than future benefit and expense payments for certain lines of business of the Company.


	March 31, 2026						December 31, 2025
(In millions)	Gross Premiums			Benefits and Expenses			Gross Premiums			Benefits and Expenses
Undiscounted expected future gross premiums and expected future policy benefits and expenses:
Aflac Japan
Cancer		$	51,004		$	53,308		$	52,505		$	54,844
Medical and other health		31,455			33,991			32,757			35,043
Life insurance		10,468			36,171			10,781			37,340
Other		1,297			6,216			1,351			6,419
Aflac U.S.
Accident		8,545			4,638			8,560			4,660
Disability		5,720			3,055			5,697			3,033
Critical care		19,272			20,020			19,182			19,971
Hospital indemnity		4,812			3,052			4,757			3,027
Dental/vision		1,074			659			1,081			657
Life insurance		3,527			4,115			3,326			3,948
Other		4,191			4,786			3,477			4,105
Total		$	141,365		$	170,011		$	143,474		$	173,047


	March 31, 2026						December 31, 2025
(In millions)	Gross Premiums			Benefits and Expenses			Gross Premiums			Benefits and Expenses
Discounted expected future gross premiums and expected future policy benefits and expenses:
Aflac Japan
Cancer		$	34,767		$	32,936		$	36,796		$	34,987
Medical and other health		20,742			16,476			22,239			17,692
Life insurance		8,216			19,394			8,625			20,894
Other		953			3,435			1,018			3,671
Aflac U.S.
Accident		5,919			3,125			6,002			3,184
Disability		4,435			2,322			4,478			2,336
Critical care		11,865			10,690			11,988			10,845
Hospital indemnity		3,334			1,946			3,333			1,955
Dental/vision		737			434			755			438
Life insurance		2,469			2,118			2,358			2,076
Other		2,482			2,804			2,105			2,444
Total		$	95,919		$	95,680		$	99,697		$	100,522

Loss expense as a result of NPR capping for the three-month periods ended March 31, 2026 and 2025 was immaterial.

Other Policyholders' Funds

As of March 31, 2026 and December 31, 2025, the largest component of the other policyholders' funds liability was the Company's annuity line of business in Aflac Japan. The Company's annuities have fixed benefits and premiums.

The following table presents the changes in other policyholders’ funds.


(In millions)	March 31, 2026		December 31, 2025
Other policyholders' funds:
Fixed annuities account balance, beginning of period (1)	$	5,152	$	5,221
Premiums received	24		97
Transfers from WAYS conversions	79		307
Surrenders and withdrawals	(19)		(64)
Benefit payments	(136)		(513)
Interest credited	12		49
Foreign currency translation and other	(107)		55
Fixed annuities account balance, end of period	5,005		5,152
Other deposit type reserves	418		293
Total	$	5,423	$	5,445

(1) Aflac Japan fixed annuities

The following table presents other policyholders’ funds balances by range of guaranteed crediting rates.

March 31, 2026

December 31, 2025

(In millions)

Range of Guaranteed

Minimum Crediting

Rates (2)

At
Guaranteed
Minimum

Cash
Surrender
Value

Range of Guaranteed

Minimum Crediting

Rates (2)

At
Guaranteed
Minimum

Cash
Surrender
Value

Fixed annuities (1)

0.5% - 2.2%

$5,005

$4,939

0.5% - 2.2%

$5,152

$5,083

(1) Aflac Japan fixed annuities

(2) Weighted-average crediting rate of 1.5% at March 31, 2026 and December 31, 2025.

Aflac Japan’s fixed annuities have guaranteed fixed crediting rates which results in the policyholders' funds balances being sufficient to cover all guaranteed benefit amounts. The reserves are adequate to fully fund future benefits at any given time.

For additional information on policy liabilities, see Notes 1 and 7 of the Notes to the Consolidated Financial Statements in the 2025 Annual Report.