Thank you for joining me as I provide a financial update on Aflac Inc's results for the third quarter of 2023.
For the third quarter, adjusted earnings per diluted share increased 27.8% year-over-year to $1.84, with a $0.06 negative impact from FX in the quarter.
With this being the third quarter under the new LDTI accounting regime, we evaluate our reserve assumptions for morbidity, persistency and mortality, at least annually, to see if an update is needed.
If necessary, these assumptions will be unlocked on a prospective basis as they were in this quarter, leading to remeasurement gains of $205 million.
Variable investment income ran $13 million or $0.02 per share below our long-term return expectations.
certain in down U.S. wrote also software our intangibles We
share. by segment, results per impacting our $X.XX
Adjusted share, ROE value capital. increased significant book per to XX.X%. and translation spread And losses, gains the cost adjusted our was a including XX.X%, of foreign currency
we the as results solid. in these view Overall, quarter
within Starting somewhat for deferred expectations. January quarter X our transaction segment. and declined elevated paid-up X.X%, premium Japan with of our earned reflecting liability. policies, were Lapses profit but our Net the the impact reinsurance
However, if factors, earned adjusting for all the premium these X.X%. estimated declined an
benefit Japan's points was basis the And XX.X%, basis came the total down year-over-year. XXX approximately year-over-year. ratio for in at points ratio down quarter, XX.X% third benefit sector XXX
and gains block. from in mature the impact We benefit be to to estimate in-force expected to continue favorable large actual We remeasurement experience basis ratio to the points XXX QX. favorable well-priced, on our
cancer in experience. Long-term treatment to experience continue of favorable underwriting hospitalization as to be it trends leading and to relates place,
rate first in Persistency elevation basis was with we refreshed some remained experience coverage, solid with refresh update tend to their and product the of XX.X% year-over-year. and case With points cancer which was as refreshments, sector customers XX lapses products. the down but recently a
reinsurance Japan from expense transactions expense driven primarily and control XXX DAC Our by in was allowance basis a ratio true-up. good by extent, and, down XX%, points expense year-over-year, to commission some
up to the of our expect For end would to ratio end towards XX% the year, full we range expense low XX%. of
FX offset of more return with our dollar-denominated investments long-term experienced expectations. line was and X.X% to favorable we U.S. yields assets in our This higher on terms yen Adjusted reinsurance. related on in our transfer was alternatives a return income by due up net investment portfolio, and as
FX risk hedge of increased our more leading lower notional, to and and put the costs capital. use our run forwards reduced investment rate FX options we a quarter, In efficient
XX.X%, up a XXX for the quarter good margin result quarter. Japan for was the very year-over-year, basis pretax The in points
Persistency U.S. This function increased results. out to X.X%. XX.X%. group points product was benefits. of basis across up of quarters the a stabilization XX Turning poor especially persistency voluntary categories, falling year-over-year Net to earned and metric numerous premium is
ratio points lower full XX.X the percentage than We a estimate QX benefit at by the in total impacted ratio than expected came XXX Our the in quarter. lower XX.X%, that remeasurement gains basis benefit points XXXX.
models, Claims some remains reserve as we more into utilization reserves. incorporate And we recent released subdued. experience have our
outlook XX%. we our ratio For our now of XX% the below full estimate to benefit year, range be materially to
gains, remeasurement to are within well we XX% tracking Excluding however, the XX% range. outlook
ratio in expense points right for this the year-over-year. direction. XX Our software basis impact write-down, trending up XX.X%, a XXX in This intangibles points write-down. from U.S. includes are a the Adjusting basis we was
direct-to-consumer disability, and scale our expect impact ratio group life over total and to vision Our improve to grow growth and We would XXX profitability. expense by initiatives, increased time this dental these their network businesses as basis and decrease points.
XX%. to above year, XX% ratio come expect range to we expense For the outlook full in now slightly our our of
on net more quarter in in fixed income line higher investment by driven floating long-term in and was mainly U.S. with portfolios income the variable yields both Adjusted return the investment and XX%, expectations. up rate our
remeasurement was XX.X%, segment the U.S. the unlocking. by in from primarily a gains Profitability solid of margin with driven pretax
declines decades, market We're of crisis. down are are XX% subsector. some to driving the financial markets As to you especially cycle office seeing XX%, the quoted know, the situations the going commercial in XX%, distressed most values XX% down property values in much the through as far as but worst real exceeding estate XX%
remains list proceedings. these with X/X active foreclosure in real estate $X around commercial billion, watch total Our approximately of
$XX CECL million our result valuation loans by marks, low reserves with current this a of increased quarter. we these these As associated
X moved into resulted real properties write-down. $XX owned, estate also a We in million which
value the currently current economic do true the the intrinsic indicative not distressed properties believe is undergoing underlying market a of of We foreclosure process.
continue quality recoveries. manage and to will to to through this us maximize cycle believe our ownership take buildings allow them We of our these ability
our credit in, corporate loss due hedge an year income somewhat we tax million, In last credit lower These line tax rates bottom pretax a an To income impact credit for net primarily the to a tax million segment, to of recorded these reinsurance Higher ago, with $XX was $X than and by date, transaction. line. our with in million investments. U.S. the investments million, Adjusted of volume are purposes to increased The the and net in was performing investment smaller than investments $X.X a net expectations. amortized to began increased. associated to quarter. is $XX which earn well positive corporate due line GAAP income impacted our year negatively investment line
the with QX, We performance. to this another with build continuing In structure our January are execute platform, to intend first outcome and similar and reinsurance economics to we year. our I'm tranche from and pleased transaction out
strong, actively Japan. our as RBC, quarter we liquidity finalized, as ratios, withstand to capital not we $X.X are while stress Our our above balance. with estimate company to And which and we XXX%. SMR ended holding well manage $X.X These greater combined minimum at above capital shocks. the remains Unencumbered stood be monitor, an position X,XXX% billion, than cycles and external credit billion strong in
or $XX expectations and were JPY X.X roughly FSA stat earnings with U.S. our within and well and limited million $X impact to both This impairments, Japan is million. capital. impairments billion
to quarter leverage primarily yen. the the by weakening corridor just in driven XX.X%, is at XX%. remains Leverage comfortable of XX% our a decline The below
yen, hold the will Japan the economic of denominated of part approximately U.S. movements with we in yen-dollar our program, hedging our dollar our fluctuate Aflac X/X and leverage in protecting As in This intentional rate. value is terms. enterprise debt of
these relative deployments. million our dividends of stock capital on of offering in $XXX IRR $XXX repurchased QX, We own paid and million good
and order to in in will manage balance be drive We to and sheet ROE risk-adjusted capital to our strong spread capital. flexible a meaningful tactical continue the with deploy of how cost we
discussing forward results detail and to Thank tomorrow's I for further attention. call. our you earnings your look in time on
