Commenting on the company’s results, Chairman and Chief Executive Officer Daniel P. Amos stated: “We are pleased that our second quarter results in both Japan and the United States reflected solid performance overall and advanced our progress toward achieving the company’s objectives for 2018.
"Aflac Japan, our largest earnings contributor, generated strong financial results for the quarter and first half of the year. In yen terms, results on an adjusted basis were better than expected for the quarter, resulting primarily from strong investment income and improved benefit ratios. For the second half of 2018, we anticipate our benefit ratio to perform within our previously
stated annual guidance. Additionally, third sector sales in the quarter performed well above our expectations, driven by the successful launch of our new cancer insurance product in April. The quarters results set the stage for another strong year ofthird sector sales. As we said during our December outlook call, we anticipate that third sector earned premium will continue its
steady growth in the 2% to 3% range in 2018, reflecting Aflac’s stable sales and continued high persistency.
“Turning to our U.S. operations, we are pleased with the financial performance and continued strength in profitability. Our
results on an adjusted basis reflect higher investment income and a lower expense ratio. Our favorable expense ratio is largely timing-related, and we expect the pace of investment to increase in the second half of the year. Our second quarter sales results advanced our progress in achieving our annual sales growth of 3% to 5%, with production skewed toward the fourth quarter. We believe we have the right strategy in place for continuing to grow our operations in the U.S. Ultimately, we believe
our investments in distribution and our customer experience objectives will yield strong sales and stable persistency, driving an earned premium growth outlook of 2% to 3% for the year.
“We remain committed to maintaining strong capital ratios on behalf of our policyholders and balancing our financial strength with increasing the dividend, repurchasing shares and reinvesting in our business. We continue to anticipate share repurchase will be in the range of $1.1 to $1.4 billion in 2018. At the same time, we recognize that prudent investment in our platform is also critical to our growth strategy as well as driving efficiencies that will impact the bottom line for the long term.
"Consistent strong performance in the first half of the year puts us on track to exceed our previously communicated adjusted EPS guidance for the year. Therefore, we are upwardly revising our 2018 adjusted earnings per diluted share guidance from $3.72 to $3.88 to the range of $3.90 to $4.06, assuming the 2017 weighted-average exchange rate of 112.16 yen to the dollar.
If the yen averages 110 to 115 to the dollar for the third quarter, we would expect adjusted earnings to be approximately $0.87 to $1.02 per diluted share in the third quarter. As always, we are working very hard to achieve our earnings-per-share objective
while also ensuring we deliver on our promise to policyholders."
http://investors.aflac.com/~/media/Files/A/Aflac-IR/financial-reporting/quaterly-reports/2018/2018-quarterly-report-second-quarter.pdf
