Aflac Incorporated

Aflac Incorporated is an American insurance holding company that designs, markets, and administers supplemental health and life insurance products to policyholders in Japan and the United States, generating $17.4 billion in total revenues in fiscal 2025. The company operates through two segments — Aflac Japan, which accounted for 53% of adjusted revenues, and Aflac U.S., which accounted for the remainder — and is the largest provider of cancer and medical insurance in Japan, a position it has held since pioneering the category in 1974.

At recent prices around $113, the stock yields approximately 2.1% and carries a market capitalization of roughly $57 billion. Aflac is not a difficult business to understand. It sells insurance policies that pay cash benefits when policyholders get sick or injured, collects premiums, invests the float in a predominantly fixed-income portfolio, and returns the excess to shareholders through buybacks and dividends. The difficulty lies in judging whether the business is cheap or expensive, because roughly half of it operates in Japanese yen, most of its $97 billion investment portfolio is mark-to-market on the balance sheet, and the discount rate used to value insurance reserves can swing shareholders' equity by billions of dollars from one year to the next. This file is about untangling those moving parts to assess whether the economics underneath justify the market's current appraisal.

The investment case is straightforward but not simple. Aflac is an extraordinary capital return story: the company repurchased $3.5 billion of its own stock in 2025, has reduced its share count by roughly a third over the past decade, and at recent prices around $113 per share carries a dividend yield above 2%. The question is whether those capital returns are durable — whether the Japanese business, which maintained over 22 million individual policies in force at year-end 2025 but has seen persistent policy attrition from an aging policyholder base, has stabilized enough that the U.S. growth engine can carry the consolidated enterprise forward.