Aflac 3rd Quarter 2026 Earnings Call - AFLAC INC

Good day and welcome to the ASWAC Incorporated third quarter 2026 earnings call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press stored in two. Please note this event is being recorded. I would now like to hand the call to David Young, Senior Vice President, Capital Markets. Please go ahead. Good morning and welcome. Thank you for joining us for Aflac Incorporated's third quarter 2026 earnings call. This morning, Dan Amos, Chairman and CEO of AflAC Incorporate, will provide an overview of our results and operations in Japan and the United States. Then, Max Brodin, Senior Executive Vice President and CFO of Aflac Incorporated, will provide more detail on our third quarter financial results, including our capital and liquidity. These topics are also addressed in the materials we posted with our earnings release, financial supplement, and quarterly CFO video update on investors.aflac.com. For Q&A today, we are also joined by Virgil Miller, President of AFLAC Incorporated and AFLacUS. Fred Simard, Deputy President of AflacUS, Charles Lake, Chairman and Representative Director, President aflacinternational. Masatoshi Kuide, President and Representative Director, Aflac Life Insurance Japan. Shinsuke Morimoto, Deputy President, AflAC Life Insurance, Japan. Brad Bislin, Global Chief Investment Officer, President of Aflact Global Investments. Before we begin, some statements in this teleconference are forward looking within the meaning of federal securities laws. Although we believe these statements are reasonable, we can give no assurance that they will prove to be accurate because they are perspective in nature. Actual results could differ materially from those we discussed today. We encourage you to look at our annual report on Form 10-K for some of the various risk factors that could materially impact our results. As I mentioned earlier, the earnings release with reconciliations of certain non-U.S. GAAP measures and related earnings materials are available on investors.aflac.com. I'll now hand the call over to Dan. Dan? Thank you, David, and good morning, everyone. We're glad you've joined us. You probably saw our announcement earlier this week about leadership promotions for Aflac Japan and AflAC U.S. that will be effective January 1, 2027. Deputy President of AFLAC Japan, Shinsuke Morimoto, will be promoted to President of AFLIC Japan and Representative Director. Also, Deputy President OF AFLEC U.S., Fred Samar, will be promote to President OF FLAC U. S. Masatoshi Koide, currently President OF Affleck Japan representative director will assume the role of chairman of Afflec Japan and representative director. Charles Lake will become executive advisor of Affleque Japan and assume the role of Chairman of Afflac International. These leadership announcements are the results of long-term and deliberate succession planning process and coordination overseen by Aflac Incorporated's Board of Directors to ensure we have the right people in the right places at the right time. Virgil and I agree that the strength of the leadership bench is a testament to the strong foundation created by Charles and Koide-san, whose leadership has had a tremendous positive impact on APLAC Japan and across the APLIC organization. We are excited as each esteemed leader takes on new challenges and opportunities. Now, turning to the results, APLALAC Incorporated reported third quarter net earnings per diluted share of $0.61 and adjusted earnings per diluted share of $2.43 as we executed on our strategy of creating long-term value for our shareholders. Starting with Aflac Japan, as we communicated last quarter, we were against a challenging third quarter of 2025 sales comparison following the launch of Morito Cancer Insurance. As a result, sales declined 4% to 18.8 billion yen in the quarter, but we were up 3% for the first nine months of the year. Sales of Sumitatsu were up both year over year and sequentially. Sales of Anshin Pallet, Our medical insurance product, launched in December of 2025, increased over the prior year. Despite the tough sales comparisons, Morito faces sales of this cancer insurance product remain relatively strong as Japanese citizens recognize the need to partner with well-respected brands for financial protection against cancer. We continue to expect Appalachian Japan sales to exceed 2025. For the quarter, premium persistency was 92.9%, which was solid and in line with our expectations. By maintaining strong persistency while adding new premium through sales, we seek to offset the impact of lapses and reissue, as well as policies reaching paid-up status. Our extensive network of distribution channels, including agencies, alliance partners, and banks, continually look for opportunities to help provide financial protection to Japanese consumers. We regard each channel as a distinct avenue to approach Japanese consumers in different demographics and stages of life. With this approach in mind, we evaluate and support each sales channel uniquely. Turning to Aflac US, we remain well positioned to serve employers and employees with supplemental health products and related benefits and solutions. We are committed to our ongoing pursuit of profitable growth while maintaining strong underwriting discipline and premium persistency. Appalachia U.S. generated a year-over-year 3.5% increase in sales for the third quarter. We are seeing momentum within our group business, especially group life, absence, and disability, and network dental offerings. We generated a 3.3% increase in net earned premium for the quarter and maintained strong premium persistency of 79.7%. At the same time, Aflac U.S. has maintained a solid pre-tax profit margin of 27.7 percent. As a public insurance company, our primary responsibility is to fulfill the promises we make to our policyholders while being responsive to the needs of our shareholders. We continue to be pleased with our investments, producing solid investment income. Our operations generate strong capital and cash flows on an ongoing basis as we remain committed to prudent liquidity and capital management. This financial strength is the foundation that backs up our promise to our policyholders, balanced with financial flexibility and tactical capital deployment. We treasure our 2026 milestone of 44 consecutive years of dividend increases. Combining share repurchase and dividend, we delivered $1.1 billion back to the shareholders in the third quarter and $3.7 billion for the first nine months. In doing so, we have maintained our position among companies with the highest return on capital and one of the lowest costs of capital in the industry. We continue to pursue more profitable growth and make tactical opportunistic deployment of capital while being there for our policyholders when they need us most. The Japanese and U.S. insurance markets remain among the most dynamic and resilient insurance markets in the world. In both countries, rising health care costs continue to place pressure on household budgets, increasing the need for supplemental insurance solutions when unexpected medical expenses occur. What differentiates us at Aflac is not only the experience and expertise our company has gathered in the seven decades of operation, but also our purpose. As a pioneer in cancer insurance and a recognized industry leader, our employees' sales team work every day to deliver solutions that help protect financial well-being while reflecting the compassion, empathy, and trust that are known as hallmarks of our brand. The ongoing foundational strengths of our business and our capacity for continued growth support our leading position and build on the momentum. Now I'd like to turn the program over to Max. Max? Thank you, Dan. For the third quarter of 2026, adjusted earnings per diluted share decreased 1.2% year-over-year to $2.46, excluding the effect of foreign currency in the quarter. In this quarter, remesherment gains on reserves from the actuarial assumption unlock, including deferred profit liability, totaled $447 million on a pre-tax basis. Remeshment gains also included $55 million of experience remeshment on reserves, which was $2 million below plan, with no impact on earnings per share. The total net impact from the Q3 assumption update increased earnings per share by 71 cents. In addition, third quarter results included $40 million, or 6 cents per diluted share of cybersecurity expenses and enhancements in Japan. Variable investment income went $22 million, or 3 cents per diluted share, below our long-term return expectations. Adjusted book value per share, excluding foreign currency re-measurement, decreased 6.4 percent. The adjusted ROE was 17.8 percent and 23.7 percent, excluding foreign currency re-measurement a very significant spread to our cost of capital overall we view these results in the quarter as solid starting with our japan segment net and premiums in yen terms for the quarter declined two percent app like japan's underlying earned premiums which excludes the impact of reinsurance paid up policies and deferred profit liability declined 1.2 percent roughly in line with where we expect to be for the full year japan's total benefit ratio came in at 49.2 for the quarter up 990 basis points year-over-year reflecting a larger actuarial assumption unlock in the prior year we estimate that the impact from reserve remeasurement gains excluding the unlock was under plan but approximately 40 basis points in q3 2026 Adjusting for both the experience in the quarter and the unlock of future assumptions, we estimate the benefit ratio to be 61.7% in the Quarter. We continue to experience favorable trends in cancer related to hospitalization and mortality, leading to favorable actual to expected experience. Persistency remains solid and in line with our expectations at 92.9%. We have continued to experience somewhat elevated lapse and reissue activity on recently launched products as we have expanded coverage options and competitiveness on new products. This activity in the quarter slightly declined, though, helping to improve persistency. Lapses on our first sector savings block remain low and in line with previous periods despite the increase in yen interest rates. Our expense ratio in Japan was 21.2% for the quarter, up 140 basis points year-over-year. Third quarter cybersecurity expenses and enhancements increased the expense ratio by approximately 180 basis points. For the quarter adjusted net investment income in yen terms increased 3.7%, primarily driven by higher fixed rate income and higher income on U.S. dollar denominated assets from the weakening yen, offset by lower floating rate income and higher expenses. The pre-tax marring for Japan in the quarter was 44.4%, down 780 basis points year-over-year, reflecting the very significant actuarial assumption unlock in the prior year, a very good result when even adjusting for this unlock. As we previously discussed, Affleck Japan increased the internal reinsurance target from up to 10% of U.S. GAAP assets to 30% of FSA reserves. This will allow us to continue to reduce risk, improve balance sheet efficiency, and ultimately generate a higher ROE for Afflec Japan and the group. During the third quarter, Affeck Japan ceded approximately 500 billion yen of reserves on an FSA basis associated with cancer insurance policies to Aflac ReBermuda. We estimate that this transaction will release approximately $1 billion of capital that will over time be available for redeployment. Recognizing that the year-to-date benefit ratio is 58.8%, we now expect for 2026 that the benefit ratio in Japan will be slightly below the 60-63% range. and we expect the expense ratio to be on the lower end of the 20 to 23 percent range. As a result, we have raised the 2026 expected pre-tax profit margin range for Affleck Japan to 35 to 38 percent. Turning to U.S. results, net-earned premiums were up 3.3 percent. Premium persistency remained solid at 79.7 percent, up 70 basis points year-over-year. The total benefit ratio came in at 40.7%, 490 basis points lower than Q3 2025, driven by the unlocking of actuarial assumptions. We estimate that the impact from reserve re-measurement gains excluding the unlock was above plan by approximately 50 basis points. We estimate the benefit ratio adjusting for the re- measurement gains from both truing up for the experience in the quarter and unlocking our forward-looking assumptions was 50.2%. Our expense ratio in the U.S. was 37%, down 190 basis points year-over-year, primarily driven by a one-time early contract termination fee of $21 million in the prior year. As our group life and disability block of business approaches scale and therefore experiences improved profitability, we are deferring acquisition expenses. This has helped the expense ratio in the quarter by 80 basis points, with a more modest impact expected in future periods. Adjusted net investment income in the U.S. was essentially flat, down 0.9% for the quarter. Profitability in the US segment was solid, with the pre-tax margin of 27.7%, a 600 basis points increase primarily due to the actuarial assumption unlock. In the U.S., we expect the benefit ratio for 2026 to be below the 48% to 52% range and the expense ratio to be in the middle of the 36% to 39% range as we continue to scale network dental and group life and disability. At the same time, we expect pre-tax profit margin for 2026 in the U.S. to be above the 17 to 20 percent range. For the corporate and other segment, total adjusted revenues increased 5 percent to $360 million. Pre-taxes adjusted earnings were $72 million compared to $69 million last year, primarily driven by 91 million dollars re-measurement gains as a result of unlocking actuarial assumptions and new reinsurance transactions. These earnings results were impacted by higher total adjusted expenses as well as lower and adjusted net investment income from the reduced short-term asset balances and lower amortized hedge income. We're pleased with our overall performance of our our investment portfolio. Our private credit portfolios are delivering strong risky deficit net yields, but we continue to boost our loan reserves, reflecting continued pressure on commercial real estate property valuations and long run expectations for middle market loan performance. Our third quarter results include the benefits from the very significant repositioning of our portfolio that began in the second quarter. Again this quarter, our global investment teams executed another large switch trade, repositioning $2.3 billion of JGBs in our Aflac Japan portfolio to take advantage of what are the highest interest rates in a generation. These switch trades highlight our strong financial position and allow us to manage losses from lower yielding assets and improve our run rate stable net investment income. This quarter's activity improves future NII by over $30 million. Years to date, our approach to actively managing the portfolio has added over $80 million of annual NII and strengthened the overall quality of our consolidated portfolio by reducing the risk of future FSA impairments and improving our ALM in a very tax-efficient way. We will continue pursuing opportunities that improve the overall health and performance of the portfolio. For U.S. statutory, we recorded $6 million of impairments on invested assets and a $6 million valuation allowance on our mortgage loans as an unrealized loss during the quarter. On an FSA basis, securities impairments reversals led to a net realized gain of 15.2 billion yen in the third quarter, and we booked an additional valuation allowance of 5.2 billion yen related to transitional real estate loans. This is well within our expectations and has a limited impact on regulatory earnings and capital. Aflac Inc. unencumbered liquidity stood at 2.7 billion, which was 1.7 billion above our minimum balance of $1 billion at the end of the quarter. adjusted leverage was 22.6% for the quarter, which is within our target range of 20 to 25%. As we hold approximately 64% of our debt in yen, this leverage ratio is impacted by moves in the yen dollar exchange rate. This is intentional and part of our enterprise hedging program, protecting the economic value of Aflac Japan in US dollar terms. Our capital position remains strong. We ended the quarter with an estimated regulatory ESR of 225%. If including the Undertaking Specific Parameter, or USP, this would add 13 points to the regulatory ratio, and result in an ESR with USP of 238%. We estimate our combined RBC to be slightly above 575%. These are strong capital ratios, which we actively monitor, stress, and manage to withstand both market volatility and credit cycles, as well as external shocks. Given the strength of our capital and liquidity, we repurchased $804 million of our own stock and paid dividends of $305 million in Q3, offering good relative IRR on these capital deployments. We will continue to be flexible and tactical in the way we manage the balance sheet and deploy capital in order to drive strong risk-adjusted ROE with a meaningful spread to our cost of capital. Thank you. And now I'll turn the call over to David. Thank you, Max. Before we begin our Q&A, we ask that you please limit yourself to one initial question and a related follow-up. You may then rejoin the queue to ask additional questions. Our operator for today's call will now give you instructions on how to rejoin the queue and then announce our first question. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble the roster. And our first question will come from Wilma Burtis of Raymond James and Associates. Please go ahead. Hey, good morning. You talked about the $1 billion that you freed up via the reinsurance transaction. Could you talk a little bit more about how much runway that is there to continue with Bermuda Reinsurance? Thanks. Thank you for the question, Wilma. So post this transaction, we have seeded roughly 15% of our total FSA reserves from Aflac Japan to Aflaco Bermudas. And as we put in the last quarter, we communicated that we have changed the way we approach this from evaluating this on a U.S. GAAP basis to evaluating this on an FSA reserving basis. And with us now standing at about 15 percent and we have an internal risk limit that we have set at 30 percent, that means that we have a very meaningful runway to continue to execute further reinsurance transactions between Aflac Japan and Aflaca Bermuda to further improve the risk composition of Aflaco Japan and also enhance the overall capital position and liquidity and ultimately improving the ROE of the total growth. Okay, thank you. And I think Aflacc as a whole has a ton of excess capital in different forms. So maybe you could talk about some of the deployment opportunities, where you think you can grow. I know you've talked a little bit more about having some appetite for third-party reinsurance, acquiring blocks. You know, are there opportunities there? What are some ofthe other opportunities to grow? Thanks. so i think that um overall for us obviously the the best new business return opportunities that we have is to write another policy in our operations in the u.s and japan that is generally where we see the best irrs for our capital and that's where we are pushing our capital to go So that's number one. In terms of external reinsurance, we see this over time as a significant opportunity for us where we can leverage our balance sheet. We can also leverage the strengths that we have, having a balance sheet that is very long morbidity. And when we then write life and annuity business coming out of Japan, we get very significant diversification benefits. So we find ourselves in a very interesting opportunity to capitalize on this strength. That being said, in terms of capital consumption, we would expect a relatively limited capital consumption for this. And in fact, the reinsurance operations is very profitable as is, very cash capital generative as is. So, this strategy, I don't think that it will materially shift the way we manage capital overall in terms of providing capital to all of our insurance operations, as well as conduct capital management through dividends and buybacks. Thank you. The next question comes from Tom Gallagher of Everclear ISI. Please go ahead. Good morning. First one question on U.S. and then my follow-ups on Japan. So the U. S. question, there's been some group disability pressure at peers from behavioral health claims, which obviously creates some uncertainty right now. Now, you're very small on that. part of the market, but you're growing a lot. When you think about what's happening, does it make you want to pump the brakes and evaluate, or do you see it more as an opportunity to take some market share as others look to raise rates? Hey, good morning, Tom. This is Virgil. First, let me give some color on the question you just As I do so, though, I want to go back to something Dan stated earlier. He congratulated some recent promotions for the organization. I do want to acknowledge and congratulate Fred Simard. He's our deputy president for the U.S. He'll be taking over effective in January as the president. So I'm starting to transition some of my duties. I'll give you some color and see if he wants to add. And we'll be doing the same today. I want congratulate Morimoto-san in Aflite Japan. you're going to hear more from both of these two gentlemen today but to refer to your question to your point it is materially a small force at the time right now overall I'm very pleased with the growth that we're seeing in our life and disability overall business but when you look at the PFM al particularly and you look get a disability portion of our plot it is it is very very small we are seeing a slight uptake but again it has no materiality just to us and we're going to continue to main our strong discipline though of how we underwrite that particular business so let me turn over to Fred and ask him gets any additional comments hey good morning Tom says it's fresh from art a couple of things first our loss ratio actually from a year ago quarter to now is actually down a few bits and so we are keeping an eye on unclaimed performance And our execution on the renewal program is very strong. We're able to get some good rate action and profit improvement. And the team has done a very good job at pricing that business. And so I see this, as you were asking, as an opportunity for us to keep growing. Gotcha. That's helpful. And then my follow-up on Japan. So third sector sales were weak. Sumitaz continued to grow. can you talk about how you see that mix changing and if you'd be comfortable growing the more asset intensive businesses since obviously with higher rates in Japan there's probably more demand but then I'm just wondering you know historically Aflac hasn't really written much as an intensive business how do you balance the growth opportunity there with the cost of capital impacts as a firm if it does end up adding asset leverage, depending on how much you grow. Thanks. So, Tom, let me kick this off and address it from a capital standpoint. And then I invite Affleck Japan to also comment on this and give their views. Obviously, there is no doubt that the history of Affleick Japan is as a third sector company. That is the core of our business. It is also, from my lens, it's a business that is not very much impacted by external macro factors. That means that this is a business that we are very much in control of. It's relatively easy for us to control the different risks of this business. And therefore, we will continue to be a very significant player in the third sector for many many many years into the future as relates to first sector business that it becomes a it's a more capital intensive business you need financing structures like reinsurance in order to play profitably in that sector and it's also exposed to macro factors like interest rates in particular, that means that you need to be much more flexible in how you price and reprice that business, and also somewhat more flexible in how you approach that, i.e. you need to be a little bit opportunistic when you grow and when you shrink that business. And that's the view that we take. But I will tell you that right now, given the significant increase in yen interest rates that we have experienced. We are in a great position to not only grow that business from current levels, but I would argue significantly grow that business. It offers extremely attractive new business IRRs and the V&B on this business is very, very attractive, especially post reinsurance that we are utilizing for the blocks that we have in place. So from that standpoint, from a capital allocation standpoint, we're very pleased with the business we have written and we feel very comfortable about continuing to grow that business. Now, we are sensitive that over time, if it becomes too big, it would have an impact, obviously, on our cost of capital as well. We're quite aware of that and something that we monitor, but as of right now, our total first sector savings in force is actually still shrinking, i.e., the waste block is running off faster than what we add in Sumitas. So, from that standpoint, we're very comfortable with where we are. Thanks for that. Thank you for your question, this is Yoshizumi. Let me talk a little bit from the sales perspective. Currently, Tsumitas accounts for approximately 20% of our total sales. While we remain the third sector-oriented company, Tsumidas is playing an important role as it is contributing to the expansion of our customer base and also making a contribution through concurrent sales with a third-sector product. Going forward, we will continue to strengthen our customer base by attracting younger middle-aged customers and new customers through Tsumitas and promote concurrent sales of cancer and medical insurance. Thank you. Thank you, ma'am. The next question comes from Tracey. Let me make – go ahead. All right. The comment I want to make about Semitas is we were very cautious in getting into this business, and it has hit all the expectations that I've wanted so far. I think, of course, higher interest rates is what's driven it, but in addition to that, what we found is our medical aspect of the product is bringing on customers, and it's not quite as interest rate sensitive. Now, if you deal with financial institutions, they're much more so that way, but our existing sales organization finds that the Sumitas product helps fill a need in addition to the higher interest rates and better returns. So it's been both ways for us, and I think it's going to continue to play an important role in 2027 as well. Going forward, it'll depend on interest to a degree but we're monitoring it and we have the capacity today to react at a much faster level than we used to and that again is is a real difference in what we've done i just like the way we've been structured the one thing about it at athletic we've tried to do is when we see something trend that we don't like then when that trend breaks we fix it work toward it and then improved. And that's what this product is. This is an improved product for us that has a lot of potential going forward. The next question comes from Tracy Bingley of Wolf Research. Please go ahead. Thank you. It's good to see that you're now seated about 15 percent of Aflac Japan FSA reserves to Bermuda. Can you just confirm where session stood before this transaction? The target moved from up to 10% of U.S. GAAP assets to 30% of FSA reserves. So that's a different basis. So I'm unsure of the starting point. We looked at the March 31st Japanese statutory filings, and we calculate about 12%. But I just want to confirm, what is that right starting point? Yeah, you're in the ballpark. We were at 10% prior before this transaction, and this moved from 10 to 15. Okay. So how does five points in one quarter kind of trend to your usual run rate? When we were looking at those statutory filings, we saw about two and a half points a year. So would you say that was five points or a high water mark pace, which just will help us in terms of getting to a timeline to reach 3%. Tracy, this is not necessarily going to be a straight line. And one of the things that we have evaluated with this transaction is that every time we execute a transaction, it doesn't matter if you see the 100 billion yen or if you received 500 billion yen. It's the same work that needs to go into a transaction, same number of people that needs be involved, the same number of calculations that needs to be done. So there's a fixed expense associated with each transaction and that does not necessarily go up with any size. Therefore, we have opted in this time to do a little bit of a bigger transaction, as you clearly noted, than what we have done in the past. And that means that we may or may not do this on a linear basis going forward. But ultimately, this will be driven by the needs for Affleck Japan. Affleick Japan is decedent. They control this timeline and they make the decisions what is best for Affleck Japan in order to ultimately end up with the best risk reward for Affeck Japan. And Afflecker Bermuda is here, the provider of the capital solution to Afflec Japan, and obviously Afflecke Bermudas stands ready to serve its clients. Okay, thank you. And you've now done these two switch trades. What would the yen currency in Japanese yields need to look like for a third trade to make sense without meaningfully impacting capital? And can you contextualize how much older, lower-yielding paper is left to sell? Yeah, good morning, Tracy. This is Brad. Yeah, we've been quite active on the switch trades, we're done, repositioned $7 billion through this program. This year alone, most of that has been in the JGB portfolio where we're doing exactly what you're getting at, which is recycling the lower yielding existing assets and capturing and accelerating the deployment into the current higher yield environment. There's a lot of pieces that have to come together behind a switch trade. There's accounting considerations, taxes, liquidity, capital, ALM. there's just a lot of boxes that need to be checked, including, of course, the unrealized losses on the assets that you're selling. We're going to continue to look at this. The more we do, the harder it is to find additional opportunities. We'll see where rates go. Obviously, higher rates help on the reinvestment front, but they also can hurt you on the additional losses on The Legacy book. So I'm really proud of the work the team has done to date. It takes a lot of coordination across the organization. We'll see what we can do going forward, but it's going to be difficult to have the same level of impact that we've had so far. Next question comes from Pablo Simpson of Morgan Stanley. Please go ahead. Hi. Good morning. Appreciate the details on the assumption review. The question is, given the favorable update overall, would you expect an ongoing positive impact on the benefit ratios in Japan and the U.S.? Pablo, I'm sorry. Could you repeat that? Yep. So just given the favorable assumption update, would you expect an ongoing positive impact on the benefit ratios in Japan and in the U.S.? Yes, Pablo. So with this unlock, we are lowering the future net premium ratios. And that means that there will be an ongoing future impact to the benefit ratios in the respective segments. So for Japan, we lowered the net premium ratio by 70 basis points. So we would expect all things being equal that as it relates to the in-force business, that in- force business will have roughly a 70 basis point lower benefit ratio going into the fourth quarter and going forward. For the U.S., that same number is 60 basis points, and for Aflac ReBermuda, it is 320 basis points. Thanks, Max. And then second question, my understanding is that three third-quarter sales in Japan were disrupted by the cyber incident. So just any update there? Are operations back to normal? and do you see some potential benefit from sales getting deferred into the next quarter? Go ahead, Yoshizumi, take that question. I hear the slides. Hi, Yoshimizu. This is Yoshizume speaking. Let me comment from a sales perspective. As Dan stated last quarter, we expect Affleck Japan sales to exceed 2025 sales as Afflec Japan continues to execute its strategy of meeting the needs of its customers based on which stage of life they are in. As mentioned earlier, upon this incident, we have been prioritizing our customers' support. And to prioritize our customers, we've been suspending several initiatives, including direct mail customer outbound calls however in september we have resumed all these activities and since the entry to the fourth quarter our sales has recovered and is now back to normal and october sales is as we have been expected We will continue to leverage our diverse distribution channel, which is one of our core competitive advantages, and promote all three product lines simultaneously to drive 2026 sales in excess of 2025. Thank you. The next question comes from Joseph Mularo of Jefferies. Please go ahead. Joseph M. Hi. Thanks for the question. A lot of good color and commentary on Japan sales. I was hoping you could give some color and commentary on the U.S. Virgilio M. Yeah, thank you. Hey, this is Virgil. So first let me just tell you that overall I'm pleased with the quarter for the U-S. for the U.S., you saw positive momentum. We were up 3.5% on new sales, 3.2% for our overall earned premium. When you look underneath the new sales though, as we've talked about it before, that we invested in these buy the bills. Our life absence and disability business, our consumer markets platform, and our dental and vision. Just to give you a little bit more detail underneath behind the scenes, those three platforms for the U.S. made up a 15% growth in the quarter. And we're very pleased with the recovery that we've seen with our Dental and Vision platform. And that is up 67% for the quarter, so. And remember this, as part of our strategy, and I should have noted this earlier, with our dental and vision and with our group life and absence disability products, we're really looking to sell those alongside our voluntary benefit products and when you look at the dental envision platform for the quarter we were selling 90 cent to the dollar which basically means that for every dental product that we sell 90 cent-to-the-dollar that is also sold with a voluntary benefit product that is the strategy that we had going in that strategy is working and pleased with the overall performance of that. Any additional comments for Ed? Well, no. I guess the thing I would say on earned premium is we grew 3.3%. If you look at the group platform, we grew 17%. As Virgil said, we actually grew 29% for the quarter on earned premium, D&D 55%, which is very strong, and voluntary benefits, 7.5%. At the same time, the individual platform shrunk about 1.5%, And so we are working on that. So back to you. Yeah, just one more comment to close out. You can see the momentum we have. If you look at the historical trends for the U.S., fourth quarter is normally our highest activity and our highest performance. I'm expecting that momentum to go in. But there's the way we count our business. I do want to note, though, that in the fourth quarter, we will have an extra week of productivity. activity. So that will count toward this year's sales number. But either way, I'm expecting us to be better than what we were last year. So I do want to note that as we go into that fourth quarter. Thank you. Great. Thanks so much for that. One quick question on remeasurement gains. We've continued to see them come in pretty strong over time, and now we have this favorable assumption review. What's the outlook? Is there a possibility for future normal course remeasurement gains moving forward? Thank you for the question. Every third quarter, we do a deep dive into our future actuarial assumptions, and we true them up, and we set the assumptions to the best that we can. And that is what we have now applied into this unlock. And the same thing relates to when we true up our experience in each quarter as well, that we try to get it dialed in to the best estimate going forward. And that's how we ultimately both set assumptions and that's what is driving our reserves. Now, I do recognize that over time, we have had favorable re-measurement gains, and that is simply a function of the very favorable experience that our underlying reserves have generated, and we're very pleased and we are very fortunate for that. But that is the main driver of obviously the very good experience that we had. If you dive into this unlock in this quarter, the main drive specifically in Japan has actually been mortality where we've seen a mortality increase of non-cancer related and mortality that have hit our first sector life insurance in a business where we actually saw reserves move up and while and so we had a rematchment loss on the first sector but if you then turn to the third sector which is predominantly our cancer insurance block and with very significant re-measurement gains because of the non-cancer-related mortality that, when you run that through our block of business, is very favorable for us. Thanks for the call, Ian. This concludes our question and answer session. I'd like to turn the call over to David Young for any closing remarks. Thank you, Andrea, and thank you all for joining us today. want to remind you that we will be hosting our financial analyst briefing at the New York Stock Exchange on December 3rd. And if you would like to attend, please reach out to Investor and Rating Agency Relations. We look forward to seeing you or talking to you then. And thank you for your time today. Have a great rest of your week. The conference has now concluded. Thank you for attending today's presentation.