Aflac (AFL) 3 Feb 222021 Q4 Earnings call transcript

Good day, and welcome to the Aflac Incorporated Fourth Quarter 2021 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to David Young, Vice President of Investor Relations. Please go ahead.

to fourth welcome earnings and morning, Aflac quarter Inc.'s call. Good

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

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

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

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

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

for that progressed. vaccines fade several remain some normalcy joining year Good it normalcy. to year was the us. type hopes has with of us variants later not gaining uncertainty morning to idle. of of There incrementally were COVID-XX severity you did some year return in yet been Unfortunately, the one as and thank allow would another XXXX the momentum and

and continue to adapt using and hard opportunity global Aflac the worked landscape We to while technology achieve our our to investments have and business the national working some tailwinds over in Considering two fortunate earnings think simultaneously virtual years, accelerate our last platform. objectives with I hard very been has experienced performance. seize the strong what has

benefit an the financial profit technology generated in our solid of solid detail, excluding share, quarter in result, ratios per earnings currency, This with increased XX.X%. revenues, the returns core Adjusted extremely accelerated persistency and consider were platforms alternative pressure margin earned the especially pandemic conditions impact strong by highlight to Aflac investments. While We better-than-expected the foreign XX.X% I'd items with drive of address premium pleased pandemic XX% some future was with results continuation the XXXX, year. the initiatives the and in associated the result and on Japan more Max investment when and overall of diluted efficiency. premium you supported on of growth will this largely like of for to XXXX. low

our conditions, continue by the navigate headwinds Aflac for sales that COVID-XX-related increase Prime, our of customers we Japan's launch of first conditions, This Amid Especially of annual degrees our our created technology encouraged face-to-face evolving face-to-face X.X%. backdrop, connect restrictions pandemic product, product. and and continue including evolving nursing given quarter various Japan's reflected am this We new of care medical September introduction virtual I pandemic to sales sales recovery sales. EVER opportunities. the monitor to the as enhance leverage we to of with actively

approximately of XXXX. support of April transfer to XX,XXX importantly, fiscal proactive products Our in consumers' our leading reaching approach alliance and or tailor captures for is goal during include their their most for This Post Japan for cancer through employees to your start way. Post various of strategic various to of Post activities be to in Japan continues Group how Japan the Japan and These the in virtually. fill needs only products as prefer purchase Aflac gradually will agencies, us, own to to and employees we where as company Japan This Up includes banks insurance year they how company insurance. offer in the our living measures lives, stages Japan This handle they Post sales of them well insurance the terms. in Aflac new GEAR Japan's as increase will insurance.

for We long-term position the expect and interim. cancer in the to sales of collaboration the companies this further gradual Aflac continued insurance growth improvement

expenses. by the Aflac a of be increase, small headwind and adjusted sales strong Aflac incremental pleased continue benefits XX.X%. strong to the well. especially higher partially was We This annual offset profit am premium driven considering higher margin net In to investment income, result XX.X% and of also to expect U.S. of constraint saw this lower a with toward the incurred U.S. to activities U.S. as adjusted Turning I gradually. by in continued ground generate XX%. somewhat businesses continues some the gained face-to-face nearly have persistency we recovery, U.S.

and our business and and self-enrollment the we platform. investments to businesses we Within on time, making agents. ongoing tools the the At appear reliance same engage given are their larger resilient be continue more challenging group online small to market, veteran labor in virtual traditional

This Aflac Excluding virtually. we Fred in our of expenses. sales, remain will lines remain more the impact on in our strength always and is how or core modestly sell success. penetration media the the and line the for combination provide products been than we are and buying able to outside term. products, has customers develop work and we is the detail, being positioned they that progress people consumers' build These s pandemic adversity. continue whether unexpected of or but to customers, I've our or access, premier to with strong future for businesses site. one we the part them group it a life are and person handles is we sales increase the reach XXXX have short looking preferences conditions, we Depending continued time, to other traditional Dental part as optimistic of service focused on we than XXX% At and top fill new acquired out our continued Vision ever of seek strategy in better world in more further XXXX need Vision in to platforms the portfolio sales ways better test our retention. disability. needs U.S. network prepared where and know long-term Aflac are of we said evolving, and than seek improvement product In habits the for group and health offer stronger distribution, cautiously to true U.S. for same The U.S. as the XXXX, with been.

ways pleased confirms strong, I we and the knew. what has While ratios of we and to purchase XXXX strong Aflac adaptable pandemic placed this insurance. been type to want in that to to resilient the United importance Japan States to be capital on achieve value significant comes that be treasure is declaration people of year stock through look behalf investments, dividend including Related deployment, our the continues shareholders. capital we growth growth. where policyholders deployment, both continuing all creation and and test, of for XXth on of without record it saying balance a It U.S. our The marks in stable the quarter's When dividend consecutive capital tactical and actions, disciplined Japan we goes to of and increases. fourth we pursue repurchase. am dividend and growth

Additionally, first the a quarter Board approved dividend of increase XX.X%.

XX.X the cost mind, Keep XXXX. in the is we of on capital of addition, capital repurchase in return our approach by dividend At remain the track share supported cash strength in Our $X.X repurchase, the to have in the in and tactical record shares industry. billion among time, and the deploying lowest our million same highest flows. to capital we capital of in

We our the made we have have investments integrating focused also in on growth platform.

the the are and accidents has the the we've now are our cynical, committed on working are promise to that communities. share products things of changed a pandemic achieve facing the focusing to position ultimately am to results, is it's illnesses, the the being proud that people that is same there to purpose to and in our into objective, has right and on policyholders, time and emerge employees, accomplished it out earnings we even while return. As for changed for long-term or doing for the in look we ways channel, strength many even policyholders. business our the COVID I strong also but continued greater only coincidental both deliver pandemic, the period world their I what shareholders, which per have our shareholder we in success point we translated conditions been By so, of added. the day And terms surprises most that in distribution means achieved them this want always, leadership. social every of of doing now. we've no don't from health the the fact think hasn't the I financial ensuring that partners This need. what while need

program Fred. Now, I'll over turn Fred? to the

and COVID comments in briefly our initiatives continue conditions I'll Dan. to business. with you, focus on but we'll negatively efficiency Beginning Thank XXXX. Japan, reflect on impact XXXX, my growth

from expect to build sales XXXX We levels.

of restrictions XX COVID or can the sale have restricting However, prefectures that of operations. XX insurance directly no our prevention effect are impact There to there are subject to measures activity. economic currently the and soon be that prefectures

naturally with more are consumers meetings reluctant prevention engage in place. to measures However, in face-to-face

at we following: at channel without XXXX product this sales weaker. levels responds medical believe major historically in it product refresh. these a channel efforts a refreshment, but cancer periodic strengthening in to despite products of The we associates through on year been to and will defend XXXX, look focused share and being As solicitations first, associate existing market agencies have channel increased non-exclusive we're policyholders where we the policy new building the marketing worksite, our to

Following customers have comments seen regarding we Japan on to proposal Dan's during activity XXXX. Post, materially potential grow

XXXX. long a from volumes to enjoyed are way in recovering We the

by ultimately coordination model led past increase Japan Post support However, quarter implemented Japan the fourth have tools learned written This our sales. Through as initiative. and a to Japan to and with Group to quarter and customer-centric ran offices and fourth activity practices we part post process campaign our the was initiatives, out the a agreed framework, initiative Post proposal building sales our to increased roll practices best Post during alliance nationwide companies on from strategic test organization-wide provided engagement. pilot initiative management that in of of

Insurance sales level be employees as XXXX. with of postal this of network April, to As we in recovery this the will are a result campaign Post meaningful the linked to confident compared Japan transfer will XX,XXX

of with little of product sales in billion new terms a over XXXX ended In our development, nursing we care product. ¥X

profiles for and that targeted advertising incentive of parent. burden caring programs introducing and aging are the We TV financial mental an

and to In product addition, March. disability less disability comprehensive plan to coverage. businesses The in work have new or small- that new leave tend medium-sized launch we product short-term short-term a targets

for We expect sales both in to XX% our products to XXXX. X% combine of

Turning to operations.

product. a the our ratio as off digital, We transition These and sales of and initiatives to interest-sensitive declining paper-based first are policyholder from we focused IT in stabilize continue revenue processes recover expense operating run include our within Aflac designed face largest platform on to reimagining to initiatives away modernization Japan. sector services,

conditions guidelines. we conditions to operating variants, of are be COVID cautiously Turning normal faced headwind near XXXX. but second risk to U.S., to We enter the can't quarter, we the to the expected CDC in control while following plan as new not return the

covered certainly We are levels. our results. time partners core and agents build among associated seeing in will promising Having January, group XXXX Dan new from the business us and brokers momentum our and spent with gives overall voluntary results formation in small our sales. confidence energy distribution business

was as average recovery franchise. Recruiting in is weekly critical, We converting are to XXXX. focused on XX% business producers. small Recruiting is recruits agent-driven continued our in up

appointments, to significant However, business. a producing unlike in on which back convert recruiting the of broker new to agent business jump small takes time

brokers Our performed In which companies business level that broker-sold to driving XXXX, on VB note benefit brokers group voluntary XXXX. higher focus one pre-pandemic we are X/X at It's tends administrators. in with leading that large specialized to through sales the than to product the on voluntary and U.S. few partnership of through Aflac's total focuses sales. a mid specifically important marketplace where group of

Turning to platforms. building our

of have in Sales voluntary develop. XXXX Dental continues XX% quote business network and over the occurring four XXXX. to agents XX,XXX alongside just months of effect. Our a we network of We XX,XXX which halo of providers, sold activity million the to $XX the in now Today, $XX remainder were X,XXX and with Vision leased. products we million trained additional line an of as last what with are proprietary of refer capturing have XXXX

We of advantage network our and expect in seek is size move we critical proprietary XXXX. network to dental the a our broker-sold to and upmarket create Controlling quality into of competitive the business. design as double

administrative having and Disability and we platform advanced with Our these not has a carved Connecticut to and officially Not reputation outsourcing out Premier see as network is administration. leave family entertain clients PFML strong $XX Life in sales unique better. building million hope and lead the paid bigger medical consultants as business states included realize and ended our capabilities launched a necessarily results management model, care referral client additional year sales in

for powered XXXX. we by expansion through products quarter, senior along in out vision roll select Our XXXX. hearing new add expect Aflac consumer this million our markets platform plans The Trupanion. business in with is to network with insurance recorded mode $XX sales and of brokers, Later dental, to market Pet

larger solution brand both case and bending worksite key will We in of and are recognized to the expense in a insurance superior believe competition the targeting the execution proposition. value pet continue with few with area unique of is powerful Operations years. best the to a our be ratio market the leverages curve the of a next and the leader goal

few activities ratio, at dental Investments platform platform expanded expense armed volumes tool, enrollment building stabilizing the You mode can with in an product current along corner portfolio. years These and the our forecasted company, migrating see we'll operations, we from corporate a small are in range finance allocation our in to dollar investment confident with hedge on our the weakening end, all at come that the maintaining refined work Commenting strategy. constantly we on strategic asset exposure lower The while XXXX. our XXXX initiatives and as clearly are with voluntary discussed vision higher few my to increased are of legacy our now platform off the modernization. program next yen. executing from our driving we conference, and moving a our comments, yield, in of costs, we and Together negative business diversification, completed include a optimized the end handle our modernizing engineered in to but are U.S. prudent exposure investor lowering elevating our turn group approach Japan. reducing settlements, program investors' have a to to sheltering holding is

some but gains likely in back from the understand building strong these we portfolios favorable late the last portfolio a last While expected the some year. game income investment to disciplined these generating start portfolios. in as approach to of in in to in year, returns off compared are alternative resulted an give of the strong variable are the our industry, We

with in Finally, I'm pleased ESG on progress very made front the XXXX.

We a are now PRI signatory.

again We to Dow performance. cover named I'll Gender Sustainability Index. and Max to Bloomberg to once Equality the Jones financial have last to great Index, And the hand now returned progress off to Max? week were more come.

Thank Fred. you,

and foreign a Total our for significant business. year, spread the main QX Policy force and of $X.XX reflects new third for fourth driven in quarter. XX.X% ratio net XX.X% in long-term earnings decline. currency a with satisfactory to benefit value above benefit the to in lower at from XX.X% rent points XX.X% Japan quarter, share and our was income share total X.X% the pandemic premiums our adjusted losses also for down year-over-year. expectations $X.XX was higher quarter the basis negative XX.X% earned our FX uptick $X.XX year segment. Variable foreign And by X.X%, of quarter claims share, the to result it full adjusted quarter translation cost Adjusted Japan's grew XX%, slight and year-over-year. declined year-over-year, our full rates our and conditions. good growing sector points $X.XX, capital. for premium growth Full year, was gains the down including currency increased a year portfolio. per ROE, in better adjusted private overall equity sales XXX were was diluted full diluted investment due in the the with a $X.XX impact, impact ago. share per strong very which declined return than came for XXX And for basis per and full year, Low book the down For lapse per performance year for the excluding utilization for was count outcome This the earned Starting largely per share the in in a X.X%. ratio quarter, earnings X.X%. drivers for the

experienced XX.X%, reserving. favorable come our year-over-year. relative third as than was ratio slightly down full block greater We normal continues initial to basis sector IBNR the in in the experience to XXX benefit For a release year, points

primarily constraining to was we within our points it and quarter, strong greater pandemic estimate slightly of normalized normal year-over-year. for releases higher in-period IBNR an a lapse XX.X%, block. basis rate a QX for to medical with rate due remained XX%. Adjusting experience, This Persistency utilization XX be ratio our down conditions than benefit

the Our premium. in ratio expense ratio control have our of XX basis policies and in NII Japan Good XX.X%, force helped decline year-over-year. higher-than-expected earned cost despite combination expense with was down in points overall

returns primarily For offset yen on partially costs a the equity to basis points fixed increased full XX.X% Adjusted hedge by and driven the favorable by increased ratio portfolio net terms, reinvestment portfolio. investment our XX year, lower income lower growing expense XX.X%. in rate private our on yield

year, full pretax the points For the result in for quarter year-over-year, up a for XXX adjusted was margin XX.X%. The good NII the quarter. up basis was Japan XX.X%,

For variable ratio year, investment a stronger-than-expected benefit supported margin was pretax the the by and full XX.X%, low very income.

U.S. the sales pandemic results. X.X% premium was impact lower have down continued Net to premium. earned to earned our as during an on Turning

improved For XX partially XX.X%, the earned continuing premium to emergency points in states. certain full basis Persistency orders X.X%. year, driven declined by

Our in at source total incurred year, and on IBNR ratio both or more reliance and claims XXXX. leading as Lower for QX lower to benefit a deferred expected impacts long-term than XXX claims within data, our came increased basis held releases. IBNR our XX.X% lower utilization points than models, we get data,

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

the basis business as year-over-year. and picks the year-end. a points up up expense was Our XX.X%, higher experiences ratio XX seasonally activity expense QX ratio U.S. towards in enrollment

the year, ratio the basis expense up was points to XX For full XX.X%.

life investments to network as of producer the build-out low-cost XXX disability, benefits basis operating efforts continued growth points Our direct-to-consumer the to core voluntary largely a the to offset towards These ambition contributed in expenses and our we strive being growth ratio. strategic are the increase lower and space. initiatives by dental group

quarter the $X.X acquisitions, favorable X.X% incurred low end income tax NII full tax investment lower the to interest In curve, the the the results impact earnings pretax short the in U.S. the investments segment year, value to was the for date, integration million to variable NII core the reported due million up our at of net We adjusted taxes not $XXX pretax was negative investment year, the reported through for GAAP cost by leading line for recent ratios. a income. These was with bottom to driver and a our and an XX.X% line. benefit the In of improved impact quarter. U.S. $XXX run recorded we the full amortized expenses also a with a than credit year, net which associated associated changing corporate million and and last our U.S. tax quarter In in with certain low for in X% as quarter, of ratio are million, purposes expectations. of yield both are hedge with $XXX a adjusted the negative in investment as million GAAP to million favorable of expense these included of mainly investments. driven $XX above line net XX.X% loss Adjusted rates $XX income income the well credit lower and the credit the segment, or a investments performing capital was margin in line offsetting to of a credit of To periods. in

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

we $X.X stock of to for full $XXX billion billion dividends of $X.X own capital total million a of For of the repurchased our shareholders. paid year, and returned

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

period FAB and like outlook I'd at value Q&A. the to begin key reiterate XXXX David I that, to to hand for our time for With the over drivers it given XXXX. closing, Before

Thank you, Max.

We to other if that me related an participants follow-up take will, are yourself up you the our ask limit questions. to And question. caller. let ask please now opportunity Jason, line a initial question and with first, to open to But allow to ready one first that, you a

[Operator Our Stanley. ahead. comes from question Please Instructions] first go Dally from Nigel Morgan

I wanted portion vision to a network your on to look disability. start mind those number XXXX, come I in dental, compare to appreciate on and do the U.S. life what sales. platforms? results how to have group guess sales color I as expectations. of And as from we total you those would

Nigel, this is Fred.

acquisition. weigh to life the acquiring for but extremely particularly with they made did try that, only the and I'll wasn't state and and it's PLADs, me that contract not an when business leave advanced contract we when We lead standpoint. that the it an ask property, they -- so measure life premier have. they and include Not in of Teresa one pleased, which had not management sales is with it, a of of disability contract, a in actual beyond linked it revenue we with from to it's sales the don't management. meaningful all, because Connecticut but then address traditional with disability and expected But the insignificant certainly Let hit call we expectations Virgil first comments any PLADS, but only

So pleased. we more couldn't be

our this would other across we year with was of XXX% a pricing news. note increase The X% contracts board. successfully that renewed the is I And that good average very thing

us quality and I lead proved our period, to our PLADs team renewal Our premium, earned that say tracking the sales, careful they quality or is as as service better side. the expectations which renewal than the team very on to well. as important -- that metrics attention is benefit into really the and as of because on

bought last news Again, very that over it in product, but property, gets the we just very course, peel it So vision scratch and property, really remember, better the to with the both Vision, having good we had year, that from network. on the dental pleased. sales retention Dental very we and and TPA, actual build platform, and as good. the -- back needed of on a onion are folded acquired along

more very but bad on much into in we're have mode that sales I not It say due performance. to carefully and onto Dental and enrollment products was Remember, tool. community so year, we're with timing-related with starting out decision the expecting that coming business with small had a in building we in necessarily roll business also those XXXX were property. And were our agents. actually our issues the the out we to been entering expectations the below would Vision,

enrollment we to we're that only available to but on by time all into which throughout has the means in on platform, put and and all And did XXX energy states. So it takes less that the not our states employees. selling which to be approved year, also has be installed

from pretty the product. Dental COVID distribution, business happens decided you with we the impacted small to meant it and that that conditions model So impacted the agent business small lift fair agent-driven did COVID. we which And with not world, a big with that that it's a had say entry and first Vision point ago long and our anticipate it was model, so just delivery

well So an million But but outperformed with extremely of effect really vision, halo of sell XX% we're the product going with vision pleased that $XX I that dental and additional that behind level, don't stay halo we to pleased XX%, network have that to at is it as and be particularly very sales, exceeds a with we associated $XX dental approaching XX%, aggressively more our XX% go forecasted. still Selling I was of halo what halo you would and We that around but tell north to our I expect it's voluntary can expectations. upmarket thing it. expectations. the One then had of is million effect with mentioned. think that originally we're above effect. has

all good. very would say, So, I all, in

XX% of of sales what our percentage sales I we've north been XXXX, expect that in Now be year, gradually in sales. XX% range. would to of in of XX% to next terms of heading towards And climbing

it too So, because but XX% we to not call grow let's as I bad that's our to a just be percentage high don't sales. want some significantly that we Obviously, of business in to expect XX% well, think the ways, estimate. rest of fully

Brett covered of you we would what actually cover. most

do agree in this I XXXX, is Teresa. So,

to sales XXXX, to continue of expecting XX% we're about be by we U.S. our see will move U.S. about actually percentage will We of sales. buy bill the XX% out bill by just property. as to XX% And sales, a of as

is recruits just be want pressure. a to U.S. XXXX under should we markets agency as here? thinking headwind reflection meaningfully of and are a stick try were to great. initiatives was Creating And on from labor that other the or a there about accelerate as I that just That up follow-up, broker for recruiting, Is the that career to

plus to our and life that take say the Virgil, our Nigel, and just and buy-to-build me dental to let you we the question, we sure disability I clear our XX% XX%, I those asked to but when direct-to-consumer two you platform. business clear. just be I'm listening you asked it's of make sure something properties that, on to When our specifically build properties very vision. consider make Teresa, to want

consider we sure we're that when XX% note on just that. make XX%, So to businesses we you to three just clear those quote

you the or Teresa Sorry, take Virgil, recruiting question? why don't

that Virgil, take let, I'll question.

Actually, very we're where you sitting pleased recruiting. for with with question, Okay. the Well, we're Nigel. the thank

our you that achieved you your but growth focus. indicated question XX.X% we about as noticed, I we changed think

If were it, think labor with you the market. some headwinds about there

to our to them X,XXX, recruits, our So and the the -- we're focus small recruit over which instead on over perform model able we did see last activated second half We evolve new just of relying going and of brokers. starting on we to XX,XXX, were pivot into year.

So, see, very we're contributed as increase you pleased, productivity. to our in can overall

recruits, our see new of I small -- we going It's also. to XXXX, I that continue expect broker as of same. So going combination look but a space still focus the be in into to more though will

from Jimmy from comes question JPMorgan. next go The ahead. Bhullar Please

back XXXX, of imposed the a the they in see possible and seen sales bit, that restrictions is you given a still early recovered the Japan part obviously, and a that like depressed it ongoing it take that So, recently. historical don't But in levels. you just some improvement of on And question in actually little bottomed seems sales Japan. the step government obviously, have versus we've

Okay. Yoshizumi Thank Japan. This of question. for the you is

it quality be XX emergency will So prefectures. is measures and true that the I XX it for today, think prefectures,

it So, that there some is true to sales. our impact are

the are or online promoted we the these sales, this sales be enhancing sales sales established as promoting also this year, plus began we virtual physical virtual have actively, hybrid been last method. sales and virtual like And However, year. as sales wheel we that this will of

Yes.

Fred. to being is one this is emergency of severity of state that note will, by really you, in act. of remind think step economic of is government without if balance there talk prefectures prefigure dampening to one being about the is state the measures, to and that I government then virus the of level most they're of add below you activity, will severe under I that play place course, emergency. trying thing Again, trying various the just it's containing, balancing level. When to prefecture, would important are And Japan grades, the the we that prevention put XX

early a And do and you practices cautionary so forth. really clients been prefectures And of so in comfortable even feel Japan, The less in ability put in measures is COVID. restrict it prefectur meeting our have don't you and than a to face potential these is where that's results. a little way. but conducting prevention in a to days to sell business see is the that's hard and a are place, of we our that very in themselves state and with that citizen being of there if measure, difficult a and in in the -- less our emergencies activity meet issue you are in live normal measure of restrictive And

state no head definitely not a bit as but COVID. it's And as of days there's of headwind as it's emergency, severe of the and question so certainly a XXXX as not into early we severe there's

relationship on can longer the then about that Post? And well, Japan just going cancer? what's expand expectation beyond to term your just on what's potentially as able with talk And being of you Okay.

mentioned I'll let But of comments, I my to in the first Japan in there expand of about team plan specific it. and some talk fill as the products. is all, blanks no

business Post consider remember, Japan our of we line again, in business. cancer However, to be a

And system. example, we riders so do products, feature or for to products that within when Post cancer we Japan upgrade add cancer the or

call conference, line support policyholder whether these services our their concierge may involves non-insurance recommendations about really that from or preventions at able starting and concierge non-insurance care business. know excited we're services. a on we're what to into of services or of investor even needs, cancer comments our some is, cancer a detection introduce the tapped being As claim they be into to to This types needs, oncologist are support going needs, you

we of called we Healthcare. a that that Hatch all capability So within house product company

retention help of that growth. Japan to and with Post available will All policyholders be will both and

So the and within And no about system. to talk Japan Japan and line I'll off colleagues at new let the product lines, quarter coming exercise fourth but Post in expand continues our momentum XXXX. cancer the my looking pilot develop

doing So, is and and model offices that Yoshizumi pilot we this well again. of those is to and in sales as offices new the well outlets. specific, other are by examples And once all And to are doing branches take that not for well. what especially doing is refer the taken

training that capabilities. enhance sales offices. then also these each a measures. are using initiatives. we in our we we since quarter, be successful cycle, be to were fourth promoting And planning professionals, do initiatives fourth is conduct guidance have and do sales of to we proposal we we are the PDCA normally going And the successful is practices in what then the sales and offices quarter, to the sales three reflect some the as So we And to conducted through by to particular similar in other by going those to give XXXX improving pilot will have success seen

add quarter pilot third Yes. our from we results you and behind by quarter, I offices increase an give sort of from in a And little test you at just put But looking the results when fourth a moved there's third to bit of the program proposals fourth it a idea, results, this to forward both mean resulting we when quarter what might of and in to just because fourth XX% improved? sales. to in had model quarter, over I quarter the number question, do numbers put those know

successful. it And clearly so was

teams in platform, us and looking sitting And of was our they're teams doing some so that tangible are excited Post team and increased very Japan results those what between spread executive it momentum sales but and gets the at down, of now more analyzing as national a about increase and XXXX. a

question comes from Sandler. Piper from ahead. Barnidge Please next go John The

in Omicron in? enter has is the over My hadn't question, probably the the maybe to each it But quarter, especially claims emerged variant quarter fatigue seems Japan, expectation also like COVID talk trended U.S., how can when new claims for we last utilization, in years. as and occur the the about occurred sets over but future you has that X.X normalization

fourth last talking to a I'll U.S. of claims not higher the And started to quarter Thank I for say been we see at, I would little continued close bit for quarter utilization normal the normal. claims December XXXX very -- into by about of data claims then the claims has utilization of that are a a the did the very XXXX, back getting the increase back you then normalization to I quarter year in the fourth But thank to U.S. pointing when you, then each paid of prediction utilization first we wrong in quarter, higher third and second for and John, Throughout quite October example, very, as than quarter my and well. would year We're a starting the than gradual look what see out utilization fully start in and throughout year. low the and sort was was quarter, the for with We we frankly, saw November be and November. claims then that and for

close fairly utilization we do correlation fact claims -- did forward. that So think that the the I that are a normal also in we means to infection rates It's that going have living correlation society utilization Omicron down. And broken between the who that and much are due is has normal and think life. pretty claims that, more I a much is has done in what people that to

of normal and going They U.S. accidents. pattern back checkups, behavior more normal coming a getting our levels. with more for and people driving And the that et sort policyholder physical claims among in are to is cetera, into mobility that, see You are base

And in fall do sort more why believe So is are I normalized that to to within going we benefit our range. normal come do that the expect for claims back of we will of ratio utilization a the that U.S. pattern XXXX. sort

similar ratio to pattern, do the U.S. U.S. When somewhat a of the go XXXX. we in but it for be we to will lagged you within that a have you XX% XX% So, the Japan, expect benefit has

and in see the U.S. quick have as you and reactions you downs quick don't as U.S. ups as see as as the the the do You do in we you don't the seen changes much and as

utilization more helps. are to would claims flatter much our deem but hope sort of and Japan, a have below little trending pattern bit prolonged claims I you more we significantly we that In normalized sort a not below be of Japan. of utilization. So in what

follow-up, pet 'XX, It does. And a then you contributor meaningful my you be? insurance do how think that about as will for think

the we're and companies, expect that's the I approach that site. a where quarter, to typically larger expect our These in for pet with about we pent-up is benefit insurance in expectation X,XXX based particularly the the deal, So, larger, around pet targeted of employees of pet demand products, that a There's of it of there's also brokers for momentum we think lot product. And a lot lot insurance. of launch in and as work are the launching we largest a the in my and platform. so as the premier mentioned characterize comments, some what a as country is later taking couple things internally of insurance broker very employee

So lot be we there's interest. believe to of do a going

will, terms sales Trupanion. and That in book or earned our remember, any of on if recognize that by that we product. premium is premium, booked Now earned you sales results, don't

to insurance that and -- of when capability many opportunity powered having their Trupanion brand it Our in by pet creates see is voluntary in. like a conversation creates more we're a which it broader rationale clients and finalist also have benefits presentations unique for an it it overall. on in brokers our putting the to But checks a box terms product, it of on and have first, interest

So, halo looking and for helps voluntary products again, create more broader effect. energy that really once our it around

that's many its we have really specific broker don't right. And than a want other gradual, it product, expectation. chances premier get have We come world going to So too be to don't right. you because new expectations sales with it our get into you to the when

You to it need get of right gate. out the

think your a product. different with of not and set and controlled out-of-pocket it if happen. benefits and as off a the of be veterinarian-driven community the out-of-pocket come conditions. an very with your measure you type you I'm that health and it you with are cost even coupled if special is excited to human an a Those differentiator. can is a is unique sure off once. unique pet insurance news doesn't We rider of You that the proposition. experience same that to pays product. to need Trupanion times reason is is think you we've don't sick and recently this work check-the-box really and who this which brokers read simply you've problematic bonified proposition, need Chewy, we is get alliance a announce cut a familiar unique three type product. were And where because their the in it's pet can to We But And they value We some it that think want a value employee good of purchase costs, take product to start, with

broader We fulsome voluntary unique and it's create platform. a it built think more So, a proposition. have think selling we our conversations we really will when differentiator, value

next Partners. Please comes The ahead. question go from Humphrey from & Dowling Lee

we them sales on of impact is Insurance. ramp question of the How Post employee the required first kind Post potential My the Japan of about we up? them And how transferring outlook? regarding think should think to about to kind should for time Japan the XX,XXX

I think for that. it's our Japan to address best colleagues

Yoshizumi, transfer any sales is people So Insurance postal ramp-up to of through? and flows Post Japan there the And how period? that

Koide is of Aflac Japan. This

there this or Japan is you very this Insurance to Japan will As is Post mentioned, what important and that, after Post be Company in about these XX,XXX planned. Japan people is April, moving And salespeople going from being Post will product April is in since to cancer transferred Aflac products. people's extremely are and be Insurance, are people they their insurance only moves Post selling well April. and preparation Japan towards And

may a move April, be However, impact. significant in their there after right not

to get increase gradual momentum sales. be once will a of it, they used in the there However,

is of after just there some be and this expecting in momentum And this are little bit add will half more perhaps we let what a me in sales. second transfer year, the So that the do occurs, are the more knowledge That's have Post they for already is currently experience me. XX,XXX selling cancer -- information all and are that insurance. working our these that of already Japan insurance. cancer Therefore, salespeople from Company then

That's helpful.

Just staying on Japan.

the of given about really would question consumers you for some COVID current restrictive the is bigger react be one not So and kind environment. measures talked counter of of the the how will

and wondering looking you Japan. more COVID more if been there sales confidence we I consumer I see a should lawmakers to consumer can think in the put are somewhere has if we like I drop, restrictive confidence are the outlook more a countermeasures that restrictive just for was at XXXX? to is place -- measures more continue could dampened and for elaborate also dropping the potentially read in little see

Dan. is This

stated, in have Let me of comments. have XX% they make Number the -- it vaccinated been I been one a is they of people Japan. hadn't couple have want but to

the rate we've much I'll we and specific think any as the seen there's don't in -- terms this let have improvement. death with is answer variants new rate to the lower we're the I time. I the so, them down And But up issues answers of vaccinated seeing States. of going what United it's you're will at trend because the death compared see think require. government the and everybody to -- instead

is course, Now of a movement direction. that higher are others, some than but in states, there

very the You they're a trying worked also variant may saw control Hopkins has these doing week to in report well. the have last not lot that Johns of regard that things to

but see before Japan We States are tested more X,XXX of a in of you're to we United We for certainly, going our back people came. a in salespeople. to corporation, And so, meeting both as example, movement moving I a the gradual, had think them they and normal. all

cases Some of X,XXX over showed be didn't the a it want COVID come, which meeting, you took was was all after would that XXX we low for particular in done, people United and up but number. had States really, at random, to about if XX said relatively that

XX% back number, the So, I employees exact the they'll over but think what it's of at you're seeing XX%. things move in back work, Japan. to you We're are to have over give

you about So, take I it. talk would see little that bit a things moving normal. more question, please, to and back Koide,

the And are increase. that again. in true once even on Koide the it new is Japan, number that cases This of is

government infection. a extra or careful same emergency whether activities. strike Japan even to ago. severe time, is state of is government a the mentioned time of Fred than infection issued the about issue At measures like of milder economic the has as However, aiming balance that the prevention earlier, to being measures issued the And emergency the are measures. and current therefore, government is much prevention between that And the long promote

very any a severe then -- a Japan we as are government the has issuing measures, result, while So issued or of plan as not lockdown measures such of that state no of there the emergency ago. Japan is severe

is no in -- no plan for for loss change all me. So, the change there either. That's

basis is of This economic correlation But say, would thing to your one the pile rate thing, about not face-to-face one meeting practical it careful Yes, just is to we're after want the our Fred. always of I is and you of really, face-to-face. question, meeting be for on. in now, demand all or close Right sale terms having of activity a about what pandemic. naturally in the the But as a implications and talking higher products. Japan

product, so be would imagine product, for level and supplemental medical types products care a natural these there cancer awareness given And of disability of conditions. you that that elevated elderly will and pandemic even

more economic it than demand issue issue my So, is really it's in a view. practical and a execution

gone And top call, Thank Jason, that we've of the you, Humphrey. was the last I our past believe hour.

to For to that I'm your forward has to all be you today you. anyone you. any and time to Rating you follow-up though, speaking help look Thank for questions, and We'll contact pleased Agency you happy Investor ask Relations. Thank soon. to

Thank conference presentation. today's has concluded. attending now for The you

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