POLICY LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2024

Schedule of Changes in Present Value of Expected Net Premiums and Expected 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.


	September 30, 2024
	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, 2023	$	17,509	$	14,697	$	6,488	$	1,088	$	2,488	$	1,652	$	4,074	$	1,107	$	206	$	853	$	277
Beginning balance at original discount rate	16,452		14,040		6,258		1,069		2,630		1,738		4,416		1,193		217		909		272
Effect of changes in cash flow assumptions	(627)		(154)		(191)		(19)		65		(47)		(106)		(21)		(17)		(5)		(8)
Effect of actual variances from expected experience	(72)		(123)		(60)		(12)		33		8		(55)		16		(9)		(18)		27
Adjusted beginning of period balance	15,753		13,763		6,007		1,038		2,728		1,699		4,255		1,188		191		886		291
Issuances	735		277		346		13		242		288		439		187		40		173		401
Interest accrual	286		228		83		13		79		49		130		34		6		27		16
Net premiums collected (1)	(1,099)		(861)		(656)		(76)		(357)		(301)		(432)		(182)		(29)		(116)		(35)
Foreign currency translation	(134)		(114)		(59)		(11)		0		0		0		0		0		0		0
Other	(1)		0		0		0		(5)		(4)		(6)		(3)		(1)		(3)		(9)
Ending balance at original discount rate	15,540		13,293		5,721		977		2,687		1,731		4,386		1,224		207		967		664
Effect of changes in discount rate assumptions	535		269		125		(2)		(96)		(46)		(256)		(60)		(6)		(33)		35
Balance at September 30, 2024	$	16,075	$	13,562	$	5,846	$	975	$	2,591	$	1,685	$	4,130	$	1,164	$	201	$	934	$	699
Present value of expected future policy benefits:
Balance at December 31, 2023	$	50,161	$	25,257	$	29,731	$	5,178	$	3,109	$	2,422	$	11,290	$	1,943	$	478	$	1,764	$	798
Beginning balance at original discount rate	43,626		25,023		30,256		5,444		3,302		2,541		12,120		2,076		506		1,971		769
Effect of changes in cash flow assumptions	(817)		(229)		(303)		(7)		109		(73)		(112)		(31)		(28)		(3)		(12)
Effect of actual variances from expected experience	(107)		(145)		(73)		(21)		38		(11)		(86)		15		(12)		(28)		25
Adjusted beginning of period balance	42,702		24,649		29,880		5,416		3,449		2,457		11,922		2,060		466		1,940		782
Issuances	749		286		352		17		247		301		452		192		42		179		405
Interest accrual	1,026		430		438		70		99		74		386		63		15		58		36
Benefit payments	(2,066)		(766)		(1,180)		(157)		(408)		(349)		(693)		(235)		(45)		(83)		(69)
Foreign currency translation	(318)		(173)		(218)		(36)		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	42,093		24,426		29,272		5,310		3,387		2,483		12,067		2,080		478		2,094		1,154
Effect of changes in discount rate assumptions	4,484		(761)		(1,597)		(460)		(137)		(66)		(680)		(95)		(17)		(175)		59
Balance at September 30, 2024	46,577		23,665		27,675		4,850		3,250		2,417		11,387		1,985		461		1,919		1,213
Net liability for future policy benefits	30,502		10,103		21,829		3,875		659		732		7,257		821		260		985		514
Less: reinsurance recoverable	3,896		1,430		0		0		0		0		0		0		0		19		0
Net liability for future policy benefits after reinsurance recoverable	$	26,606	$	8,673	$	21,829	$	3,875	$	659	$	732	$	7,257	$	821	$	260	$	966	$	514

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


	December 31, 2023
	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, 2022	$	19,298	$	16,714	$	7,485	$	1,256	$	2,534	$	1,635	$	4,486	$	1,220	$	211	$	724	$	110
Beginning balance at original discount rate	18,221		16,195		7,284		1,242		2,760		1,775		5,050		1,365		231		799		118
Effect of changes in cash flow assumptions	(165)		(470)		43		(12)		(16)		(51)		(494)		(142)		(9)		61		(9)
Effect of actual variances from expected experience	(315)		(137)		(42)		(15)		(58)		(29)		(223)		(73)		(17)		(25)		(2)
Adjusted beginning of period balance	17,741		15,588		7,285		1,215		2,686		1,695		4,333		1,150		205		835		107
Issuances	1,034		418		335		26		323		376		493		249		44		181		169
Interest accrual	412		334		124		20		102		62		179		45		8		31		6
Net premiums collected (1)	(1,564)		(1,261)		(1,017)		(112)		(473)		(390)		(580)		(247)		(39)		(137)		(17)
Foreign currency translation	(1,170)		(1,038)		(469)		(80)		0		0		0		0		0		0		0
Other	(1)		(1)		0		0		(8)		(5)		(9)		(4)		(1)		(1)		7
Ending balance at original discount rate	16,452		14,040		6,258		1,069		2,630		1,738		4,416		1,193		217		909		272
Effect of changes in discount rate assumptions	1,057		657		230		19		(142)		(86)		(342)		(86)		(11)		(56)		5
Balance at December 31, 2023	$	17,509	$	14,697	$	6,488	$	1,088	$	2,488	$	1,652	$	4,074	$	1,107	$	206	$	853	$	277
Present value of expected future policy benefits:
Balance at December 31, 2022	$	54,766	$	27,419	$	31,954	$	5,582	$	3,098	$	2,445	$	11,489	$	2,074	$	488	$	1,526	$	622
Beginning balance at original discount rate	47,677		27,566		32,800		5,940		3,391		2,636		12,846		2,300		532		1,778		624
Effect of changes in cash flow assumptions	(147)		(507)		65		(27)		(11)		(59)		(592)		(194)		(14)		72		(13)
Effect of actual variances from expected experience	(385)		(154)		(51)		(15)		(75)		(59)		(271)		(99)		(22)		(32)		(4)
Adjusted beginning of period balance	47,145		26,905		32,814		5,898		3,305		2,518		11,983		2,007		496		1,818		607
Issuances	1,059		432		341		32		331		392		505		258		46		185		169
Interest accrual	1,473		608		625		100		127		96		524		84		21		68		33
Benefit payments	(2,987)		(1,153)		(1,415)		(206)		(464)		(465)		(893)		(274)		(59)		(105)		(48)
Foreign currency translation	(3,064)		(1,769)		(2,109)		(380)		0		0		0		0		0		0		0
Other	0		0		0		0		3		0		1		1		2		5		8
Ending balance at original discount rate	43,626		25,023		30,256		5,444		3,302		2,541		12,120		2,076		506		1,971		769
Effect of changes in discount rate assumptions	6,535		234		(525)		(266)		(193)		(119)		(830)		(133)		(28)		(207)		29
Balance at December 31, 2023	50,161		25,257		29,731		5,178		3,109		2,422		11,290		1,943		478		1,764		798
Net liability for future policy benefits	32,652		10,560		23,243		4,090		621		770		7,216		836		272		911		521
Less: reinsurance recoverable	4,135		1,521		0		0		0		0		0		0		0		15		0
Net liability for future policy benefits after reinsurance recoverable	$	28,517	$	9,039	$	23,243	$	4,090	$	621	$	770	$	7,216	$	836	$	272	$	896	$	521

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

Schedule of Weighted-Average Interest Rate and Liability for Future Policy Benefit

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.


	September 30, 2024
	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)	3.9 %	2.5 %	2.1 %	1.8 %	4.0 %	4.3 %	4.6 %	4.5 %	4.3 %	3.8 %	5.4 %
Weighted-average interest, current discount rate (1)	2.2 %	2.7 %	2.0 %	2.4 %	5.2 %	5.1 %	5.3 %	5.2 %	5.2 %	5.2 %	5.2 %
Weighted-average liability duration (years)	12.6	23.7	16.2	16.9	8.0	5.6	11.1	9.1	7.6	13.5	8.8

(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, 2023
	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)	3.9 %	2.6 %	2.1 %	1.8 %	3.9 %	4.2 %	4.6 %	4.4 %	4.3 %	3.7 %	5.4 %
Weighted-average interest, current discount rate (1)	1.8 %	2.3 %	1.7 %	2.1 %	5.3 %	5.3 %	5.3 %	5.3 %	5.3 %	5.3 %	5.3 %
Weighted-average liability duration (years)	13.1	24.9	16.3	17.3	8.1	5.6	11.3	9.3	7.9	13.6	9.4

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

Reconciliation of Future Policy Benefits

The following table presents a reconciliation of the disaggregated rollforwards above to the ending 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)	September 30, 2024			December 31, 2023
Balances included in future policy benefits rollforward:
Aflac Japan
Cancer		$	30,502		$	32,652
Medical and other health		10,103			10,560
Life insurance		21,829			23,243
Other		3,875			4,090
Aflac U.S.
Accident		659			621
Disability		732			770
Critical care		7,257			7,216
Hospital indemnity		821			836
Dental/vision		260			272
Life insurance		985			911
Other		514			521
Corporate and other		3,897			4,225
Deferred profit liability		2,000			1,806
Deferred reinsurance gain liability		949			1,012
Intercompany eliminations (1)		(4,711)			(5,017)
Total		$	79,672		$	83,718

(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 2023 Annual Report.

Summary of Net Earned Premiums Recognized

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 September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Net earned premiums:
Aflac Japan
Cancer	$	885	$	1,004	$	2,595	$	3,154
Medical and other health	577		640		1,752		2,018
Life insurance	251		371		906		1,183
Other	35		38		104		113
Aflac U.S.
Accident	314		320		955		973
Disability	333		315		998		941
Critical care	439		436		1,324		1,317
Hospital indemnity	181		180		548		547
Dental/vision	54		53		159		160
Life insurance	141		122		420		351
Other	29		13		75		31
Corporate and other	160		83		479		258
Reinsurance ceded	(71)		(99)		(206)		(309)
Total	$	3,328	$	3,476	$	10,109	$	10,737

Summary of Interest Expense Related to Insurance Contracts Recognized

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2024		2023		2024		2023
Interest expense:
Aflac Japan
Cancer	$	257	$	243	$	740	$	804
Medical and other health	71		63		202		206
Life insurance	123		115		355		378
Other	20		19		57		61
Aflac U.S.
Accident	7		6		20		18
Disability	9		8		25		26
Critical care	85		86		256		259
Hospital indemnity	10		10		29		30
Dental/vision	3		3		9		9
Life insurance	11		8		31		27
Other	7		7		20		20

Total	$	603	$	568	$	1,744	$	1,838

Summary of Undiscounted and Discounted Expected Future Gross Premiums and Future Benefits and Expenses

The following tables summarize the amount of undiscounted expected future gross premiums and expected future policy benefits and expenses and discounted (discounted at the current period discount rate) expected future gross premiums and expected future policy benefits and expenses 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.


	September 30, 2024						December 31, 2023
(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		$	57,471		$	63,270		$	59,169		$	66,427
Medical and other health		37,282			38,763			38,583			39,884
Life insurance		12,133			41,545			12,677			42,541
Other		1,665			7,232			1,781			7,448
Aflac U.S.
Accident		8,977			4,694			9,095			4,548
Disability		5,748			3,109			5,776			3,177
Critical care		19,775			20,421			19,886			20,626
Hospital indemnity		4,911			3,023			4,922			3,025
Dental/vision		1,124			682			1,162			726
Life insurance		2,922			3,488			2,719			3,260
Other		1,692			2,017			724			1,396
Total		$	153,700		$	188,244		$	156,494		$	193,058


	September 30, 2024						December 31, 2023
(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		$	45,651		$	46,577		$	48,363		$	50,161
Medical and other health		28,885			23,665			30,757			25,257
Life insurance		10,582			27,675			11,240			29,731
Other		1,384			4,850			1,512			5,178
Aflac U.S.
Accident		6,381			3,250			6,369			3,109
Disability		4,551			2,417			4,488			2,422
Critical care		12,585			11,387			12,417			11,290
Hospital indemnity		3,484			1,985			3,419			1,943
Dental/vision		796			461			807			478
Life insurance		2,098			1,919			1,914			1,764
Other		1,078			1,213			467			798
Total		$	117,475		$	125,399		$	121,753		$	132,131

Schedule of Changes in Other Policyholders' Funds

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


(In millions)	September 30, 2024		December 31, 2023
Other policyholders' funds:
Fixed annuities account balance, beginning of period (1)	$	5,939	$	6,423
Premiums received	86		126
Transfers from WAYS conversions	207		229
Surrenders and withdrawals	(49)		(59)
Benefit payments	(373)		(419)
Interest credited	42		53
Foreign currency translation and other	(38)		(414)
Fixed annuities account balance, end of period	5,814		5,939
Other deposit type reserves	281		230
Total	$	6,095	$	6,169

(1) Aflac Japan fixed annuities

Schedule of Other Policyholders' Funds by Guaranteed Crediting Rates

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

September 30, 2024

December 31, 2023

(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%

$5,814

$5,734

0.5% - 2.3%

$5,939

$5,850

(1) Aflac Japan fixed annuities

(2) Weighted-average crediting rate of 1.5% at September 30, 2024 and December 31, 2023.