Aflac faces a divergence between rising net earnings and falling adjusted profits, pressured by a weak yen, declining Japanese premiums, and tightening US margins.
Aflac's adjusted earnings fell 7.7% despite higher net earnings, due to currency headwinds and weaker US margins, while Japanese premiums declined.
Aflac reported a complex second quarter as net earnings rose to $825 million while adjusted earnings fell 7.7% to $883 million. The insurer faces significant currency headwinds from a weaker yen and narrowing margins in its US segment, despite strong capital returns to shareholders through $1.3 billion in buybacks and dividends.
The decline in adjusted earnings was driven by currency headwinds from a weaker yen and narrowing pretax adjusted margins in the US segment, where claims and benefits costs increased.