AM Best revises issuer credit rating outlook to positive for Aflac Incorporated and its subsidiaries


OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best revised the outlook from stable to positive for the long-term issuer credit rating (long-term ICR) and confirmed the financial strength rating (FSR) of A + (superior) and the long-term ICR of ” aa- ”(senior) of Aflac Life Insurance Japan, Ltd. (Aflac Japan), American Family Life Assurance Company of Columbus (Omaha, NE), American Family Life Assurance Company of New York (Albany, NY) and Continental American Insurance Company (Omaha, NE). The outlook for the FSR is stable. These companies represent the life / health insurance subsidiaries of Aflac Incorporated (Aflac) (Columbus, GA) (NYSE: AFL) and are collectively referred to as the Aflac Incorporated Group. At the same time, AM Best revised the outlook from stable to positive and confirmed the long-term ICR of “a-” (Excellent) and all existing long-term issue credit ratings (long-term IR) of Aflac. (See below for a detailed list of long-term IRs.)

These credit ratings (ratings) reflect Aflac group incorporated ”s the strength of its balance sheet, which AM Best considers to be the strongest, as well as its solid operational performance, favorable business profile and appropriate enterprise risk management (ERM).

The change in outlook to positive reflects Aflac’s continued evolution and improvements in its ERM practices. Management’s focus on improving operating financial metrics and financial management tools to protect the balance sheet is rooted in its actionable risk management plans and practices. The success of the company’s risk management practices has recently manifested itself in its ability to adapt to the operational challenges presented during the COVID-19 pandemic, including its digital sales efforts to strengthen product growth without its face-to-face engagement on construction sites and its diversification. product and geographic areas during this period. All of this has been managed through the prism of risk management and Aflac’s mature and integrated ERM program, including its well-developed scenario testing and scalable modeling capabilities. AM Best believes that Aflac’s attention to risk through this program has guided him through the challenges of market disruption and local government guidelines to be put in place in the first half of 2020, this which hampered new sales growth. The company met these challenges through strong customer engagement in the individual and collective segments. In addition, a new medical product was introduced to the Japanese market in early 2021, as well as a reactivation of sales of cancer products on April 1, 2021 through its relationship with Japan Post, both of which are expected to have an impact. favorable on sales in Japan.

Aflac is a leading provider of cancer insurance and supplemental medical insurance in Japan, and supplemental sales of health accidents and health care in the construction market in the United States. AM Best has recognized Aflac as a leader in product innovation and customer service, working towards efficient claims payment. In recent years, Aflac has broadened its portfolio and its presence by expanding its group and construction insurance offers. The organization has used several approaches, through the purchase and partnership of group life and disability insurance assets, the capabilities of the dental network and, most recently, a pet insurance offering. Aflac’s U.S. business has been challenged to grow through its construction site distribution model for much of 2020 through 2021, but these diversification efforts, along with previous investments in the digitization of sales processes and diversification of distribution channels, have alleviated the lack of access to new and existing customers. Actions to adapt and leverage innovative sales techniques during the COVID-19 pandemic have required years of risk management planning and preparedness to be implemented successfully.

Aflac Incorporated Group continues to exhibit highest level risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR), and maintains favorable risk-based capital levels in the United States and excellent solvency ratios in Japan. Its diversified product sales structure contributes to strong operating profits and stable cash flow for the holding company, supporting its cash position and interest coverage measures. Aflac’s adjusted financial leverage was around 25%, also with strong interest coverage ratios. AM Best notes that Aflac’s capitalization, liquidity and access to capital provide financial flexibility and support to the entire company and its operating entities.

From an operational performance perspective, the reported pre-tax net gains of $ 4.2 billion for the end of 2020 were slightly lower than in 2019 and reflect the mitigation strategies in place to address the risks. pandemic. This includes Aflac’s strategy to encourage its US customers to use wellness programs, which has led to greater engagement and partially led to its strong persistence measures in 2020. Profit projections for l US activity in 2021 indicates that the company expects a return to more normal usage patterns. as this market sees more and more states removing restrictions and opening access to customer work sites. The company’s projected result is lower margins compared to 2020.

The following long-term RIs have been confirmed with a positive outlook:

Aflac incorporated—

– “a-” (Excellent) on $ 700 million of 3.625% senior unsecured notes, due 2023

– “a-” (Excellent) on $ 750 million of 3.625% senior unsecured notes, due 2024

– “a-” (Excellent) on $ 450 million of 3.25% senior unsecured notes, due 2025

– “a-” (Excellent) on JPY 12.4 billion, 0.3% senior unsecured bonds, maturing in 2025

– “a-” (Excellent) on $ 300 million of 2.875% senior unsecured notes, due 2026

– “a-” (Excellent) on $ 400 million 1.125% Senior Unsecured Notes, due 2026

– “a-” (Excellent) on JPY 60 billion, 0.932% senior unsecured notes, due 2027

– “a-” (Excellent) on JPY 12.6 billion, 0.5% senior unsecured notes, due 2029

– “a-” (Excellent) on 13.3 billion yen, 0.55% senior unsecured notes, maturing in 2030

– “a-” (Excellent) on $ 1.0 billion, 3.6% senior unsecured notes, due 2030

– “a-” (Excellent) on JPY 29.3 billion, 1.159% senior unsecured notes, due 2030

– “a-” (Excellent) on JPY 9.3 billion, 0.843% senior unsecured notes, maturing in 2031

– “a-” (Excellent) on 30 billion yen, 0.633% senior unsecured notes, due 2031

– “a-” (Excellent) on JPY 20.7 billion, 0.75% senior unsecured notes, due 2032

– “a-” (Excellent) on JPY 15.2 billion, 1.488% senior unsecured notes, due 2033

– “a-” (Excellent) on JPY 12.0 billion, 0.844% senior unsecured notes, due 2033

– “a-” (Excellent) on JPY 9.8 billion, 0.934% senior unsecured notes, due 2034

– “a-” (Excellent) on JPY 10.6 billion, 0.83% senior unsecured notes, due 2035

– “a-” (Excellent) on 10.0 billion yen, 1.039% senior unsecured notes, due 2036

– “a-” (Excellent) on JPY 8.9 billion, 1.75% senior unsecured notes, due 2038

– “a-” (Excellent) on JPY 6.3 billion, 1.122% senior unsecured bonds, maturing in 2039

– “a-” (Excellent) on $ 400 million of 6.90% senior unsecured notes, due 2039

– “a-” (Excellent) on $ 450 million of 6.45% senior unsecured notes, due 2040

– “a-” (Excellent) on 10.0 billion yen, 1.264% senior unsecured notes, due 2041

– “a-” (Excellent) on $ 400 million of 4.0% senior unsecured notes, due 2046

– “a-” (Excellent) on $ 550 million 4.75% senior unsecured notes, due 2049

– “a-” (Excellent) on JPY 20.0 billion, 1.56% senior unsecured notes, due 2051

– “bbb +” (Bon) on JPY 60 billion, 2.108% of subordinated bonds, maturing in 2047

The following indicative long-term IRs have been confirmed with a positive outlook for the titles available under the existing pending registration:

Aflac incorporated—

– “a-” (Excellent) on senior unsecured debt

– “bbb +” (Bon) on subordinated debt

This press release relates to credit ratings published on the AM Best website. For all rating information relating to the publication and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this publication, please see AM Best’s Recent Rating Activity webpage. . For more information on the use and limitations of credit rating reviews, please see Best’s Guide to Credit Ratings. For more information on the appropriate media use of Best’s credit scores and AM Best press releases, please see the Guide for the Media – Appropriate Use of Best’s Credit Ratings and Press Releases. of action from AM Best Rating.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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