Sector: Financials | Focus: Life & Health Insurance
HQ: Columbus, Georgia
Financial Risks
The company faces risks from global market conditions (inflation, interest rate fluctuations), investment defaults/downgrades, currency fluctuations (especially the weakening yen), valuation judgments, potential creditworthiness declines of financial institutions, and operational risks of third-party vendors. Litigation and regulatory inquiries, changes in tax rates, and catastrophic events also pose risks. Aflac Japan's solvency margin ratio (SMR) is sensitive to market changes, potentially limiting dividend payments.
Financial Upside
The company's primary revenue source is insurance premiums, with investment income also contributing. Favorable investment results, efficient expense management, and strong premium persistency are key drivers of profitability. The company has a large and growing portfolio of policies, and new product sales (particularly in Japan) are increasing. Aflac Japan's strong capital position and new reinsurance agreements offer potential future growth.
