Aflac Q3 Earnings Beat Estimates on Strong Group Life Sales

Aflac Incorporated AFL reported third-quarter 2025 adjusted earnings per share (EPS) of $2.49, which outpaced the Zacks Consensus Estimate by 38.3%. The bottom line improved 15.3% year over year. Adjusted revenues came in at $4.7 billion, which surged 60.7% year over year. The top line beat the consensus mark by 5.6%.The quarterly results gained on strong investment income and improved U.S. segment performance, supported by higher sales of group life and disability products. The solid sales of Miraito also bolstered Japan’s new premium sales. However, the upside was partly offset by rising acquisition and operating expenses.Aflac Incorporated Price, Consensus and EPS Surprise Aflac Incorporated price-consensus-eps-surprise-chart | Aflac Incorporated QuoteAFL’s Q3 PerformanceAdjusted net investment income advanced 7.7% year over year to $1 billion in the quarter under review. Total net benefits and claims came in at $1.4 billion, which declined 10% year over year. Total acquisition and operating expenses increased 3.8% year over year to $1.3 billion. Pre-tax earnings increased nearly 22-fold year over year to $2 billion.Inside Aflac’s SegmentsAflac Japan: The segment’s adjusted revenues dipped 1.8% year over year to $2.3 billion in the third quarter and fell short of the Zacks Consensus Estimate of $2.4 billion. Net earned premiums of $1.66 billion slipped 2.7% year over year and missed the consensus mark of $1.73 billion.  Adjusted net investment income inched up 0.5% year over year to $665 million. The unit’s pre-tax adjusted earnings came in at $1.2 billion, which rose 13.3% year over year and surpassed the consensus mark of $814 million. New annualized premium sales advanced 11.8% year over year to $133 million on the back of solid sales of Miraito, its cancer insurance product. Aflac U.S.: Adjusted revenues of $1.73 billion grew 2.6% year over year but marginally missed the Zacks Consensus Estimate of $1.75 billion. Total net earned premiums advanced 2.5% year over year to $1.5 billion, attributable to higher sales. The metric marginally missed the consensus mark of $1.52 billion. Adjusted net investment income came in at $214 million, which inched up 1.9% year over year in the quarter under review. Pretax adjusted earnings of the segment improved 7.1% year over year to $375 million on the back of improved premiums and lower benefits. The metric beat the consensus mark of $344 million. The unit’s sales totaled $390 million, which grew 2.8% year over year, resulting from higher sales of group life and disability products.Financial Position (As of Sept. 30, 2025)Aflac exited the third quarter with total cash and cash equivalents of $6.8 billion, which rose 8.7% from the 2024-end level. Total assets of $122.3 billion increased 4% from the figure at 2024-end. Adjusted debt came in at $8 billion, up 10.7% from the figure as of Dec. 31, 2024. Adjusted debt to adjusted capitalization, excluding accumulated other comprehensive income, came in at 22%, which deteriorated 230 basis points (bps) from the 2024-end level. While the company has no debt maturities in less than a year, total debt maturities worth $3.3 billion are expected within the next five years.Total shareholders' equity of $28.7 billion advanced 9.9% from the 2024-end figure.Adjusted book value per share increased 4.1% year over year to $53.33. Adjusted return on equity, excluding foreign currency impacts, was 22.1%, which improved 190 bps year over year.AFL’s Capital DeploymentAflac bought back 9.3 million shares worth $1 billion in the third quarter. It had 121.6 million shares left for buyback as of Sept. 30, 2025. Management announced dividends of 58 cents per share for the fourth quarter. The dividend will be paid out on Dec.1, 2025, to shareholders of record as of Nov. 19.AFL’s 2025 OutlookAflac currently anticipates a benefit ratio of 58-60% for the Aflac Japan unit in 2025, compared with the earlier guidance of 64-66%. The metric for the Aflac U.S. unit continues to be projected within 48-52% and is likely to stay at the lower end of the estimated range. The expense ratio for Aflac Japan is reiterated to be 20-23%. The metric is likely to stay at the lower end of the estimated range for 2025. The same for Aflac U.S. is reiterated within 36-39% and is projected to stay at the mid to upper end of the expected range.Underlying earned premiums are likely to witness a year-over-year decline of 1-2% for the Japan unit in 2025. The pretax profit margin for Aflac Japan is estimated at 35-38%, compared with the previous view of 30-33%. The same for Aflac U.S. continues to be estimated at 17-20% for 2025 and is anticipated to stay at the upper end of the range.AFL’s Zacks RankAflac currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other InsurersOf the insurance industry players that have reported third-quarter 2025 results so far, the bottom-line results of Cincinnati Financial Corporation CINF, RenaissanceRe Holdings Ltd. RNR and RLI Corp. RLI beat the respective Zacks Consensus Estimate.Cincinnati Financial reported third-quarter 2025 operating income of $2.85 per share, which surpassed the Zacks Consensus Estimate by 41.8%. The bottom line increased 100.7% year over year. Total operating revenues in the quarter under review were $2.9 billion, which improved 12.1% year over year. The top line beat the consensus mark by 0.8%. Net written premiums climbed 9% year over year to $2.5 billion. Investment income, net of expenses, increased 14% year over year to $295 million. In its property & casualty (P&C) insurance business, CINF witnessed an underwriting income of $293 million, which increased nearly fivefold from the year-ago period.  The combined ratio, a measure of underwriting profitability, improved 920 bps year over year to 88.2. In the Commercial Lines Insurance unit, total revenues of $1.2 billion increased 8% year over year, driven by an 8% rise in premiums earned. RenaissanceRe’s third-quarter 2025 operating income of $15.62 per share outpaced the Zacks Consensus Estimate by a whopping 64.6%. The bottom line soared 52.7% year over year.  Total operating revenues of $2.9 billion tumbled 4.5% year over year. The top line missed the consensus mark by 3.7%. Gross premiums written slipped 3.2% year over year to $2.3 billion. Net premiums earned of $2.4 billion declined 5.8% year over year. Net investment income came in at $438.4 million, which grew 3.4% year over year.  RenaissanceRe reported an underwriting income of $770.2 million in the third quarter, which jumped 95.6% year over year. The combined ratio improved 1,640 bps year over year to 68.4%. The Property Segment recorded gross premiums written of $733.3 million in the third quarter, which fell 7.3% year over year. It generated an underwriting income of $791.5 million, which doubled year over year. The combined ratio improved 4,480 bps year over year to 15.5%. RLI Corp. reported third-quarter 2025 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 33.9%.  The bottom line increased 27.7% from the prior-year quarter. Operating revenues in the reported quarter were $449 million, up 5.3% year over year, driven by 4.7% higher net premiums earned and 12.5% higher net investment income. The top line beat the Zacks Consensus Estimate by 0.5%. Gross premiums written of $562.3 million increased 0.5% year over year.  Net investment income increased 12% year over year to $41.3 million. Our estimate was $42.4 million. The investment portfolio’s total return was 3% in the quarter. Underwriting income of $60.5 million increased 48.6% year over year. The combined ratio improved 450 bps year over year to 85.1. Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI): Free Stock Analysis Report Aflac Incorporated (AFL): Free Stock Analysis Report Cincinnati Financial Corporation (CINF): Free Stock Analysis Report RenaissanceRe Holdings Ltd. (RNR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks