Aflac (AFL) 28 Oct 212021 Q3 Earnings call transcript

Good day, and welcome to Aflac Third Quarter 2021 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I'd now like to turn the conference over to David Young, Vice President of Investor and Rating Agency Relations and ESG. Please go ahead.

Ian. you, Thank welcome. and Good morning,

remarks in touch As and always, supplement be release financial pandemic. our our remarks amid United the ongoing of have in investors.aflac.com. COO our countries. Fred And posted both quarter COVID-XX operations to Incorporated to begin related will Amos, of Incorporated the earnings and key this how Aflac the Aflac in initiatives, about will conditions States Broden, with the Chairman and we Dan quarter we operations Japan an CEO Vice briefly morning, will discuss hearing we and are then President the pandemic. overview and on Executive of including Crawford, Max navigating Miller, current summary results of Teresa management Q&A and Aflac of quarter Chief financial Risk the and third Group President capital June team Investments; U.S. with Beaver, Global the are Riggieri, a our President President CFO Investment and Benefits; Al Officer; Aflac joining of and our of CFO Aflac of U.S.; Chief and U.S. Accounting and of segment call Chief Global of Members Howard, Officer Incorporated Actuary; Officer Virgil liquidity. of Steve Kirsch, Global will for executive President us prepared Eric and Chief White, Aflac conclude Individual

Deputy of Director Representative Director; and President Koichiro management Sales Aflac Representative Director, President Life at Daniels, Director, Director team International; Insurance President joined Marketing. executive Lake, of well We CFO; our also Charles Chairman of and as Todd and are and members by Masatoshi Yoshizumi, and Japan; as and Aflac Koide,

within this of in statements securities meaning some the federal begin, teleconference are laws. we forward-looking Before

some nature. on prove today. assurance at results can could our report materially in statements Form those believe annual factors for you we they because results. from the accurate impact differ to We that various could are they of will risk be are these Although prospective encourage XX-K we materially look give to discuss Actual we our no reasonable, that

release of measures. on to earnings the the earlier, reconciliations call is mentioned non-U.S. and GAAP I Dan? includes investors.aflac.com available Dan. As I'll now over hand certain

and Thank morning. for David, good joining Thank us. you, you

evolve, With has year. last I'm team and challenging am been sales of very the of continuing response over to everyone. to our also conditions the proud a I adapt representatives to empowered have our what to pandemic grateful time for employees Aflac who

or During that to the address States both a third hospitalizations that's in we COVID With in in decline United quarter, cases a varying I then the degrees. mind, continue and but way Japan, in a and saw employees to rise in and our informed a similar sick own family. updates worse with being them keeping want encourage medical my get people this to I casualty to to community in avoid the due to COVID-XX the I'm and because vaccine how from being pandemic. them even

entered the when quarter, and we gatherings the colder the must weather fourth gets indoor the uncertain, remains recovery As from we diligent. pandemic remain and increase,

the currency excluding adjusted year. higher ratios for and lower-than-expected benefit These income, increased XX.X% quarter quarter, the For for per are Japan. third the in by share, XX.X% investment foreign earnings driven primarily results largely diluted net impact and

our the reflected for quarter, in financial XX.X%, operations in generated third overall XXXX. the at the results range financial profit outlook Aflac provided above was Japan in which briefing solid Looking Japan analyst of as margin the at

the Sales has a of of XX.X%. Aflac few in very Japan for the XXXX this of year first were approximately reported premium level. quarter. moments, explain for will persistency Japan were months X essentially flat Max XX% sales As Aflac strong

limited much in extended state quarter. to the sales emergencies and These of are in in that than they which conditions widespread in restrictive of Japan, We emergency third face-to-face scope states impacted and persisted lockdowns opportunities. Japan continue to navigate other prefectures countries, evolving have more but multiple pandemic include through less

with to September be a meet key we sales. driver insurance our we to the to ability face-to-face appears customers in nursing We which the were view improve which another of certain quarter, encouraged recovery our to ability meet by our fourth of improving consumers. very of entered continues launch the the meet somewhat to as the opportunity with the As Japan, in new care face-to-face needs degree gradually to and

to However, the nursing determine very this insurance. care the still the it's of in of launch potential product early new

April the work addition, Japan the strengthen In Post, proactive insurance alliance on X. Aflac to Japan cancer of to continues resumed sales with which

continued for Japan of expect sales growth and term. in further companies a collaboration position both intermediate Post cancer insurance improvement long-term the We to gradual the

approximately expect X enrollments United in XX% pandemic U.S., small the some In first months These Sales periods. a turning us than U.S. and incremental to are results the the recovery, the face-to-face increased was XXXX. prior more and are Aflac particularly This premium nearly at strong what margin Aflac for by benefits lower sales profit toward reflect net XX%. to sales allowing gained We improving persistency continued believe have of quarter investment strong adjusted for driven of the also States, continue conditions saw we result businesses income, by which ground higher higher expenses. of XX% gradually. XX.X%. U.S. of Now meetings we have adjusted and to offset incurred

traditional the sales acquired is a to is investments their resilient business of the well. quarter be make of of very small larger challenging and that which XXXX. period by driven agents in developments independent performing as group At and being the reliance platforms, invest excluding over labor traditional markets, continue our broker XXXX. we about the for business, self-enrollment Group appear have up sales XX% our the time, performance sales third increase given continue to we Within in generated on of same more of sales XX% platform. group same to tools, businesses online make year-to-date

enrollment both with whether in-person an historically customers, service With sell avenues the position virtually. U.S. only Network impact reach Vision, potential want the These face-to-face needs new top term. has for to combination to portfolio short people our for These toward life remain way out products for future able and to strategy the the products with businesses products, of modestly help purchase customers. provide. have effective and our States the our core distribution, being insurance long-term responding us financial convey the Japan. higher Aflac United or remains clearly enter consumers, served disability. Aflac in better to continue we pandemic long-standing lines Pandemic we to And periods and in us while the on U.S. success. line eye where States, and and United conditions to sales new in of being in we the As in the need protection Dental virtual Aflac focused The most build to premier fuel demonstrated

in invest for to in both continued our countries these have integrate We tools distribution and to into our operations. investments

we liquidity significant achieve management. place behalf in and and continuing Japan ratios As capital on to and remain on the to capital strong of committed prudent U.S. importance always, policyholders investors. We our

declaration, XXth With XXXX increases. fourth consecutive dividend of quarter the year mark will the

continue cash investments we've and we the platform. record our is repurchase in focus our in by to share and will the At made our be capital supported track growth dividend same the tactical flows. on of strength Our time, integrating

more on toward we we and our on doing emerge also we strategic work as about are our promise strength policyholders. achieving our period sharing deliver look from leadership long-term so, November continued forward position to to Briefing We at growth the look to of Analyst this XXXX. financial ensuring priorities while By and Financial well-positioned XX, in and

let turn Fred. Fred? Now over the me to program

difficult which XXX implications Thank of country. are impact before weeks, handing through, and the retail face-to-face on-site shops utilization precise impact keep but investor scheduled emergency in limited quarter's to restricted payroll was and sell foot off has COVID we you, solicitation, comments When results. with third noted, brief unusual things, triggered that Japan, looking the consultations, have across by, reduced a the analyst professionals. and our include Dan. billion. practical hospital through in briefing owned is rates claims Aflac quarter incurred workers as and of and sales claimants approximately to Recognizing Max travel we declarations the affiliated next with my prefecture. traffic roughly virus, of constrains quarter financial Beginning prefectures, the of most experience it infection calculate, to the XX,XXX Japan's few reduced Dan at Aflac the access totaled with other further since by to the Declarations I'll and JPY on between The inception an X.X among of of Japan claims combination states

development product remain We focused expect we business what and our can including conditions model. improve on advancing and control, to

roughly in XXXX. continues XX% period medical medical do Our and well same with Prime in up quarter the year-to-date XX% product to EVER over sales the

Our market a roughly share was XXXX, we're enjoyed medical which year. but also product still in XX% of refresh the has medical improved, at sales

So pandemic quarter having impact. conditions an the in are

savings From is expectations the our product within summary, and the perspective, profile sold with protection September amount risk targeting our is interest the product have support risk coverage the is has similar provided start, and in launch, strong care to late government rich sensitivity. The aligned both In product. this Regarding therefore, nursing policies. less duration. product, market. for XX,XXX capped behind are, products. with we supplemental since Benefits an Japanese sector versus existing a a rate our nearly marketing This mass modest put and given third designed but a product the our by a

wrap the of important defending we services become share. that these development the domestic our offerings. building see and insurers more continue nursing noninsurance We This among common cancer now both product for services and has as and market large our care

the of strain with virus. pandemic at remain the U.S., to conditions of spread elevated the levels the Turning Delta

million. specifically my growth Aflac of claimants sales quarter, the end the of approximately with Dan the third on totaled buy-to-build XX,XXX since claims our incurred virus $XXX focus platforms. of overall U.S. As inception conditions. has COVID comments of I'll covered U.S.

of as can and and adjust. Our Vision XXXX launch, Dental strategy a summed learn be up year

we processed XX% roll second This agents over and to in cases, additional states. we the development up training over and quarter quarter, out as X,XXX launch

sold employees. focused medium-sized and around with XX averaging businesses are We cases small- on

introduce a continue XXXX, volumes and into our move dental direct-to-consumer the individual upmarket we readying we and forward for out platform product. increased Looking as network building

team testimony and premier renewed high-quality accounts, of a their to XXX% Our service model. their disability life current successfully

to and administering respect contract medical XXXX. leave Direct, in their family for We With state-wide currently leave benefits launch administrative-only our in states. platform. Aflac our an to program acquired e-commerce initiative, This is are offer products we management XX paid Connecticut preparing with leveraging

dependency operational sales rates conversion premium the XX on actively days reduces of have digital-only and platform in build of agents. out to The as the We center and percentage the as in coming currently licensed earned call well early accounted years. are as call are building expected call center augments a X building center licensed quarter, is roughly third platforms these and In for of XX% vendors. sales a and our

to Before continue Max, sales our on over operations. handing to have drive comments largest online a Year-to-date, since we September volume capability. In we our processed through off being XX,XXX the applications Japan, few solution. month with launching online

and on a the and and Japan ratio. budget this key without forward platform U.S., pushing sizing month is the and services disruption. life are completed platform. disability policyholder are transition or our driving expense investment We from to the customer and largest premier long-term platform modernization required digital down operating In This successful client Zurich to streamline time, on a our technology on in our

and The focused and business to with leading connections ensure a of Japan period business, critical to are despite looking ease and building forward, quality out and is development weaker new doing our and benefit critical onboarding U.S. and platform smooth systems. renewals administration goal continue our at ratios revenue. administration HR expense we service data with voluntary on going We analytics. migrating platform of When group a

previously within line targets. recalibrating precise our for stay recognizing time the ranges ultimate for conditions pandemic to reaching expect guided and prolonged require trajectory We expense ratios,

remains Finally, Global performance Investments, at strong. Aflac

and asset platform allocation investing We our work. refreshed advance continue to sustainable strategic recently our

and Our deeper strategic will execution next at into and team operations Briefing. Analyst Investor dive month’s

over Let performance. me cover now to to turn Max? Max things financial

Thank you, Fred.

XX.X% XX.X% quarter for strong book to value Variable investment for above long-term increased And to in as For claims largely spread to rate including pandemic foreign quarter a to points and significant basis experience, down was of greater-than-normal sector basis a the XX.X%, utilization earned foreign coverage. slight products while low XX% uptick X%, third per worth we our and year's to strong ran the the losses, $X.XX and view This XXX ROE, estimate Adjusted reflecting return we IBNR of Adjusting was at benefit the declined model past lower and segment. output to business $X.XX that reserving. which income due impacts, down data, in sector was IBNR third our product have refreshed as points a overall XX.X%. favorable we with share points to of product for XX.X%, year-over-year. total release better negative relative impact in is XXX and quarter. paid third our Japan. increased quarter, the policyholders down ratio launches, XX adjusted exchange volumes. policies with Persistency due $X.XX, premium Total driven grew pandemic conditions, share, We impact, than that, in in third was we strong experience be than year-over-year. in XX.X%. adjusted more our Japan's performance cost on the the their greater the come premium by basis experienced from translation leading with sector remained initial lapse ratio gains declined earnings growth releases foreign sector expectations. with down especially recent our pandemic more experienced constrained per to releases. quarter, update normal excluding Utilization count have our year-over-year, and the sales a force, Policy benefit our currency rates ratio look quarter in with Starting third a continues a X.X% for up first normalized Japan refined, measure to continues our earned now a of conditions be for to block benefit as in-period capital. by came for Consistent our X.X%. currency medical

QX, Japan increased to and lowered some The quarter the see spending phenomenon. increased and activity view as our Our down we expenses QX seasonality expect expense ratio which Adjusted in continue initiatives was XX to of basis temporary be to key booking in a Constrained tend in generally returns up in XX.X%, our projects. Japan business very in points and year-over-year. we on spending We income XX.X% partially primarily investment favorable points equity margin terms, by good the growing for result yields on net fixed basis our yen for portfolio rate a reinvestment by on hedge lower costs, private XXX portfolio. pretax offset XX.X%, driven year-over-year, in lower was quarter. especially

to year for financial at This for XX.X% XX% full of to be quarter's a full given lead FAB. benefit And guidance range margin range X-year us XX.X% be the to the -- year pretax strong to the results Japan to the above XXXX. at expect ratio XX.X% given below

XX.X%. Turning twice year rates. of lower which first are points are have to sales, lapse earned continued during of to in-force from as basis premium. basis XX Net U.S. Persistency was to improved lower down rates the pandemic results. as premium an roughly the X% on level our lapse earned sales impact XXX results points

In XX addition, from emergency impact about orders. of points there remains basis still positive

benefit ratio pandemic. get we models came in XXX leading claims Our And XX.X% the data impacts expected lower total basis utilization releases. incurred and was than the held IBNR lower IBNR deferred heavily itself by on as raw than more initial a U.S. year. at within reliance QX impacted increased in long-term XXXX, our Lower points which for claims our data, to or

XX.X%. which impact a on X.X they percentage benefit an ratio, This benefit releases ratio, leads excluding to amounted of the underlying to point IBNR quarter,

the the remainder of communities increase and resumption the ratio normal our year of the policyholders. with in gradually throughout our by expect activity to We benefit

XX%. we our For now the benefit in XX% original to guidance be of full range year, ratio versus expect XX% to to the of XX%

expense to Our spend lower however, impacts XX.X%, up the Weaker a but XXX points. basis lot moving year-over-year, impact ratio revenue, basis U.S. largely ratio by expense the by of duck Higher the ratio negatively in is increased parts. XX expense expense. points offset with performance sales advertising our was

$XX margin life operating acquisitions. towards also recent X.X%, by income to incurred lower segment core are for These we Initial moving in U.S. disability, the the In efforts favorable months isolating to impact $X to being at year to to credit low the of expenses million These quarter. of we as now performing a The benefits fourth in net growth investments an investments a in as strong associated the dental In to in we net low-cost investments. credit important in of was end the expectations investment line recorded corporate tax down as voluntary up million vision, are the our was short quarter. somewhat to tax We In investment remained FAB investments interest the low now well million, credit our to space. the volatility purposes segment, net change mainly a for expenses investment expenses U.S. in due yield these initiatives, U.S. tax growth year. investment Profitability Our are pretax $X.X XXXX. continued earnings of income date, and the increase in rates network Net-net, With to to our our the low not of expect bottom credit were through with contributed the end ratio adjusted value the lot are basis XX.X%, GAAP with a $XX us quarter, the in for credit positive the by some To corporate and tax strategic the the and of which offset a driver. to up million the and expectations. will versus to strive direct-to-consumer QX producer investment benefit tracking according the despite line range a build-out with when last with fund, in offsetting points a was books, the our XXX curve investments. be certain corporate we ratio an we run to and do XX% variable income quarter, towards line group with these core at associated indicated net parts, significant X line pretax of end Adjusted income above as the integration loss XX%. bring increasing expect NII adjusted expectation as full driven tax included line. pretax well plan. line. of

remains remains Columbus. Our position in ended billion strong stood Unencumbered Aflac and SMR at an XXX% XX% these year, offering of RBC Japan bond with we sustainability stock XXX% which of of billion, repurchased of a issued an liquidity includes and on balance. paid capital company comfortable $XXX $XXX the of in our deployments. middle north relative at in of $X.X to and good XX%. dividends XX.X% above million of own our earlier this our million, IRR corridor $X.X In the leverage quarter we holding the north Leverage, capital the quarter, minimum

tactical sheet we continue capital. order We meaningful in to risk-adjusted capital cost and of be equity in return manage drive with a on spread the flexible to will strong deploy to our balance and how

be begin or to FAB. With economic financials that of disclosures an high company, base. this in I'll cash or event adoption it to to around expand do our Q&A. impact level, as and XX-Q the flows will hand capital our see change how David begin At like no adoption manage mention Form the to LDTI regulatory accounting a we at There to we over to would not I Finally, capital. we that, our no will with

Ian, we question. will first take Instructions]. the [Operator now

Nigel [Operator Morgan Instructions] from our first time, At Dally this Stanley. comes question of

wanted color touch get of on I to points. some Hoping number Japan sales. a to on

you the saw the sales a dip sharp of during quarter, Olympics. particular, in progression whether First, throughout

sales it's to Japan within orders possible ramp-up emergency update Post? the seen in as an on third, the you rebound Second, lifted. And cancer that? if were comment on Have sales

with that, be and comment but a Well, let Aflac think afterwards, may I get just to then me Japan that'd make best. I start

Koi, this, please? So handle want however you to

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in of words, third emergency the the Let since me declaration, largest a result Delta which population XX% we other in second Language]. COVID-XX Language]. from our in state [Foreign And And to the quarter, as third due of emergency the Japan. covered had that, in of strain. third start in declaration Language]. [Foreign quarter. quarter prefectures increased only situation [Foreign the of quarter. the state XX prefectures covered of the to In area XX spread

and delaying impact And to a and and well due sales also as face-to-face our sales station of the to so performance with the that, as results from coming both walk-in in some were worksite there some restrictions number our station traffic decrease meetings -- customer shops. And were Language]. there prefectural prevented visiting borders, customers. of on traffic which [Foreign of into top across traveling us customers in

is been able at product. a third for we year. environment, which this of September, the under solicitation as we have conducted. sales also online of the we And end the because That have the point level care the that nursing same last is of to launched arrive product the new that However, quarter at

covered a result, [Foreign the last of third are So [Foreign year. in more fourth sales same economic under Language]. now, becoming And Language]. the we area is state have level in although to the Japan much as in gradual. of as Japan, it's emergency that the [Foreign been Right there Language]. active declaration. is quarter, able the no quarter in reach activities

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over the is Language] this new policy again, quarter. [Foreign [Foreign sales Language] second increased Yoshizumi. Once While

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Okay. That's it for me.

San, will please. So Koide, to Koide give Mr. I it back

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All right.

You be most lot there's lot going heard issues been X important we we because of because the looking at. on, to are this consider a a that

the home of degree, me people up that at sum just hurt under Let our everywhere it orders, quarter Europe, but the no. strong earlier the at team to being that hurt changed is enough year. attitude not those was some from has Post space Japan in stay emergency definitely third way answer The it because like by required to sales, any the management in what saying of production

just up. back But products. to it's to to any do. it's I We They are slower place. because and so FSA, slow They the shareholders. recapture on I little did I they kick been comfortable normal specifically with them go. any management mistakes production the think top they're thought very slower slower they time on know be big are pushing where were? they a it their the I it down. what products, Aflac the it that will I I tentative on bit goes -- board do it? the Do to management large that think I impact think begin Yes, pushed about do can Do levels it -- make but it. I play I yet? would than company, is emergency, because know are so Do think back not. do aligned. will hoping pushing take by think not was where a they're absolutely Is will thought. getting they've it lower I than not our we

have winner So I a Post. still with think we Japan

nice a that are us only it's not they but are that for together. large because think that selling shareholder us, they closely so ties I

lot heard stop about you've know I'll there. I So a so this,

asked very a also quarter. the specific you question Nigel, about

related me suggest to you the That some to it's September precise just give of X.X X.X was about type that impact Let color. surface, back August the billion extremely rebounded impact. JPY sales. billion on July in to some JPY JPY difficult billion. and may but calculate Olympics, X.X

of issue a broader quarter, in states care days the XXX product, picking the the X the we -- of think about up discussed sales also earlier. over emergency which had I throughout the that I'd September note we little is launched as last new month. million of of XXX

So give the an trend that of some idea dynamics. will of you

Lee next & Our of Partners. from Humphrey question comes Dowling

better just as first low? reserving to incidents process is for at on we releases pandemic. But up the the should releases, at see guidance will the looking have understanding walk quarters My the XX you basis, but of to I basis, coming full year the set But can still a claims releases months these through I us get during IBNR in released a since favorable a now. see reserve helpful, appreciate like of more be the rolling And COVID the long a fourth as that IBNR remain if continued reserving more practice. you quarter. ago around you to have you’re is for on for about feel least to tried kind we’ve number that’s question reserve the quarters. for while

we the have in that’s changed follows likely not comes When reserving conditions and the releases to releases, Simply are results. way would likely But claims if I reserve Humphrey, to of to our always continue we to that continue low you it you’re our have and same so difficult before. practices. way the we with they come see methodology. therefore, in So first be reserve continue reserve future They terms, all, continue we to predict. because very through have general some been, utilization, to pandemic -- say

utilization more experience, We recent expectation. but new a the reserving claims our have claims to to we more claims normalized not reserve to continue adjusted

second My to through it. U.S. channel? the is continued quarter, sales, related production fourth the through those the given early seen to channel, Got your quarter largest in question that which broker signs has the may have like what any fourth the good of Okay. especially has you recovery channel show look

Teresa?

we all, ask as broker benefited to third Yes, I’ll stellar the first respond from sales, sales couple make of and Virgil as far this a then question. I’ll specifically broker really is quarter. Teresa. of But to in the comments,

accounts. from as quarter, the well you new Delta benefited existing that during we broker also standpoint, sales variant. in the a know have and veteran From We

career So with with agency pressure saw sales. that, we

X could broker so third quarter so drive the up to fourth that good for mitigate sales set was pivot and that we channel. the that of ways and contracting that And we through

let I’ll with color. So Virgil respond additional

Yes. Thanks, Teresa.

return to Teresa. fourth those really veterans, we the what years X That about Within a plus. up in the talk I veterans. Third things said, we us start being a third Just into veterans, going increase pre-COVID. quarter in about add saw I specific see was thing quarter, same XX% XXXX good optimistic that year-over-year. last in compared over performance broker you XXX% also, increase returned gives QX, of saw a we am we the to quarter. to XX% channel few the year saw going a And will

Our strong. pipelines are

therefore, so we of through the expectations year. And stick our the rest with going

Morgan JP of Bhullar Jimmy LLC. from comes question Securities next Our

I very seen to a this was gone question. gave But driven you And and month think earlier the sales, how first Japan the that Olympics, sales pick I a basis. the in that more declined to everyone see lifted? to on on now you through of you've question the already if will emergency activity widespread extent a by sort have feel and that the detailed comment orders And orders been have quarter. response had sales fourth surprised sequential the up on was that you just could just I wanted now you

things. Olympics thing and impact Yes, difficult the we weigh emergency of think third what in to will, our the I to very a would the say I they'd Jimmy, as precise it's you few a of rolling give X states colleagues and if percentage, the are -- if but can quarter. One, like, Japanese in

And clearly expect conditions so judging fourth fourth quarter. better that we quarter makes more to be in difficult. the the But

in comments, remember, And continue with also that September. only We we see Post. product through sales October continue we days first or earlier -- -- product. we only had the meanwhile, to X of X you momentum days And Japan the in then days in new as XX-plus we my to care had work

precise quarter the difficult all we into more of so of positive suggest and But conditions lines fourth around that. see that things, some or it's will guidance of certainly, we to but have a the percentage we to view sort for do heading venture those put very trend And that, wouldn't recovery.

business, employers and just U.S. done seems the versus the a and where on channel, coming than going lot markets seems contrast it what's the small in smaller the compare versus channel agency can like faster it the obviously larger back agency broker on then larger versus of better business sort going And you in also then the broker process what's channel employers. like employer similarly on the has

to that. Virgil ask I'll respond to

Thanks, Yes. Teresa.

case good our We've in really start with I So to it a the XXXX, predominantly case of overall dominating the seen they're In product large selling XXXX group. sales now large group is said first, channel, comes when product. case I'll about before, XXX% lowest broker performance again, market, market. performing space. on seen like Group we've

space. bit that sales. saw to seen So we say, relates return the to is I agree space career and smaller experience our integrated case virtual Again, channel. we with recovery the continue more online with you, to case I Really, A small already strong the little on a that used case fact in that really more, we've large large earlier headwinds of cases, dominate veterans. let's in that

agents that we're ensuring we've many not Aflac as is together, back our things lowest always to looking veterans will a see a quarter that has that unified of of had all core broker-driven third continues Added the And channel. been. sales go in case the to well. we year, produce so doing, have been competency to X to in really, in We come produced you fulfillment. though, that as that's participate cases, space, distribution for be Distribution sales market

key it when to also. a that's together So work there's aspect is overlap

is to help a open it's the is and to keep where you the And the X to think was to market. hit of right now dynamic conditions conditions speculation about pandemic. a get -- seeing, U.S. can more businesses properly. are lot harder the the economy Labor also they are this the we're and labor dynamics now for obviously that when of of different space, very more small particular kind type XX you've in the those which that's, businesses. a affected goes running longer as that get things of and about read out of we recover same lot the to from markets. labor many issue, that's fourth about remind is a part that the the so Jimmy, that One our sell, agents of part our folks to of recruiting a There's actually facing They're navigate difficult taking are and but to improve starting So challenging recruiting businesses in quarter into dynamics market I to franchise. small just that tend year. impactful early also But about labor pandemic next of course, you want to uniquely think That market

next Our Gallagher Evercore ISI. Tom from of question comes

you kind it to Can X% relatedly, underlying Japan what split Japan returning is and both? to. it -- medical below heard normal How of X% And you X%? you about were what closer does is? follow-up U.S. just trends? cancer? lower some remains Or how said level for of talking I a terms on is normal. of Is normal, also then between below referring comment The normal? below but underlying on X Are trends claim closer in to about the that claims that? the is Max, to driving much we Is the

little So where more of have and normal recently, around seen come normal rate. of claims U.S., below it’s X quarter, to that Tom, run experienced sort digits rate, volatile is approached for it the more first zero extended single bit And sort In at month-to-month. an bounces run have of levels. especially -- Japan, we’ve for when But more weeks more say we between from the rates. what fourth it’s for I run below look It have more -- we we normal certainly normal time. anything specifically back of period we would the a been XX% example, the

it is where X Got Japan, at in the it. And cancer then the -- bolters medical across and other? between or

both for It’s product impacts really again, both it. lines, on we of have -- at and different sort when and where both cancer. But average different for within on look products. we generally see it -- speaking, benefits we medical those It’s out it’s seen similar

or high is you say it low? when And single digit, digit mid-single or

digits. Single

Barnidge comes Sandler. John of question Piper from next Our

given it Sticking about next a to nature, claims the think coming benefit decay we get the reasonable in like little utilization forward? how as weak bit. with But I the U.S. this quarter. time seems ratio IBNR a assume that do of

I think off. you were cut

to ask want of part X time the it. because more might only You heard question we

will I time that normalize how But next tailwind subsequent claims get the it nature, years? into decay about seems that reasonable be utilization quarter. leaking that that may think should in we IBNR given of

quicker Japan. then business U.S. please, our Riggieri, see in maybe and give like what Al, Chief would claims some But our reaction you Actuary, in if than generally to comments off, please. as tend you add you to well. I'll Al kick trends a I'll see some to speaking, But to ask more recent color,

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that. accruals see we more in of But around a months zeroed really you'd approximately get to fluctuation So the through bit on claims XX little go level.

and the So at in it time information and coming it IBNR. to looking data mature takes for

benefit a trends. of a So claims of period. -- continue the to a rebound, back to the begin out see normalization ratio into have COVID. during But with as sort end expect the judgment it -- through back you'll the tail more of I'd normal going the bit of to little remainder

Erik from Our Bass Research. of comes next question Autonomous

into how about this year, talk initial just ahead capital generation that the your capital And you for outlook of does much your given is play how running expectations can results? Max, strong deployment?

and And the expected. holding to ultimately, can clearly generation break above lower-than-expected benefit by the up primarily pretty higher statutory our essentially through it into which as then FSA earnings we much company. you dividends capital as the well, driven higher initially down drives It also runs and is They flow immediately ratios. what earnings and formation upside

be. ratios benefit a reported our that difference between what our for the increased can normalized capital this and year guidance use of generation ratios you So sort as would benefit

we single capital Therefore, deviates ratios. the capital company a how very expectations, also we We subsidiaries. not necessarily operating very in around it’s of all capital single And capital. think significant our deploy from a our about or the when generation holding tactical year our deployment, then view high level. Now, have initial at we hold strong or capital a and operate we with company, changing the if period driving

it immediately necessarily us different long deployment that we wouldn’t deploy Obviously, term, capital available lead to basis. I into into it’s our that strategies. more to on So a from have -- a short-term

then the around you Got it. of could mentioned services follow-up. a cancer ancillary product. products you the offer and that senior some Fred, and And of kind care

market? Just those get guess, be want and to how those sense what you might a bring of I to would,

concierge products historically, Yes. et the policy injury, elderly It’s to and And few in-home very not by it’s developed from Japan. of the nursing a insurance everything services to to but reduce that risk are that a offering becoming cetera. for of care modernization the attached support many, around care support, certain approach elderly in companies developed leading largely insurance care is

You’re go seeing on U.S., and on some too. it’s the in going of Japan, of in course, that,

health cancer diagnosis you way other product. Hatch an out the to direct But from dynamics. has types concierge care insurance. to an also, support the in and do desk approach services effectively care, have the for the both it, or contractual policyholder, as A, particularly services about Aflac been of to to cancer entity cancer opportunity diagnosis is And a now an think surrounding to mental noninsurance Our sure entity as make agreements building screening in to that there’s well we has that type we a to, on early called formed internal space. around either care you third-party we’re way that these out as then Japan building nutrition and Healthcare. to ability And everything helps in And to works that think call those have services it effectively, post-cancer been

you to we put built. this now And next action. stages share years working big then the so entity really insurance building necessary our been of It’s capabilities a in securing on other care will, on We’ve become in horizon, this it’s the cancer think and being our of X the about with side. the really also, supporting in And starting to is is spot early the and into market be for competing a providers if now. But in care it country.

premium? your for Got it under part of fee or service your it. Is covered

Yes. covered it’s funnel desk. arrangements Essentially, under request premium. the moment. through then on you And and through third-party are the at once that It what applied depends vision then That contractual you services concierge is there a the predominantly. are charges

more types Post. on through So sold customer it’s be services opportunity would note that around service, sales persistency, offered also of policies market these Japan should cancer and share, I

some Hatch Briefing you ultimately, relationships things entity Analyst By with providers. there. So its a but provide way, But would the and play, third-party we contractual defensive the this both the types would and these of are independent it’s offensive better because margins color. develop really Financial more own to through revenue at done probably just it’s Healthcare drive

from of Krueger comes question KBW. next Our Ryan

that over down? Max, bit company uses could both little about the the next -- your you the few at subsidiary look you'd talk a holding work U.S. the potential if capital and of in And excess to years?

Yes.

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increase terms dividend. record, long-standing track very We in the have continuing to of a Dan mentioned, as

of active a we of we've where capital done have smaller allocated acquirer acquisitions to, We been well. stock well, have number in very own as and as our

of significant tax to as as capital that how we And details you I our all closely. a obviously, back I continue. generally see So the change I will will of of terms funnel And that to term, we may don't long would the in we all somewhat. buybacks. to mean very on strategy that these expect surcharge the But shareholders. change that headlines same see very, study

to debt equity conversations And more kind that disclosure. rating Have mentioned capital with debt the on, then and you to your confirmed follow-up still them start since X to providing LDTI you I appropriate? agencies you is going the just guess, were of potential impact with given levels had

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forward health us our join wish that, I out our as All all Investor to for that, Briefing the we be good opens continued Virtual beginning and remind need have then today, to if us Agency then. details for you or X out until eye on everyone call Registration an for on right. joining at reach XX, concludes Eastern. just hosting and thank November mentioned And That and Relations to we look and so XXXX keep having Rating will you Analyst a.m. Financial want you more XXth questions. today. today, you

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