newsfilter
← Latest News
Business Wire·

AM Best Affirms Credit Ratings of Aflac Incorporated and Its Subsidiaries

AFL
  • AM Best affirmed the A+ Financial Strength Rating and "aa" Long-Term Issuer Credit Rating for Aflac Life Insurance Japan, Ltd., American Family Life Assurance Company of Columbus, American Family Life Assurance Company of New York, and Continental American Insurance Company.
  • The Long-Term Issuer Credit Rating for Aflac Incorporated was affirmed at "a" (Excellent) with a stable outlook across all listed entities.
  • Ratings reflect Aflac's strongest balance sheet strength, strong operating performance, favorable business profile, and very strong enterprise risk management capabilities.
  • Risk-adjusted capitalization remains at the strongest level with a BCAR rating, supported by strong U.S. risk-based capital and excellent Japanese solvency ratios.
  • Financial leverage stood at 22.2% at year-end 2025 with strong interest coverage exceeding 20 times.
  • Operating leverage via security lending and Federal Home Loan Bank funding agreements remained below 10% at year-end 2025.
  • The company maintains strong financial flexibility with multiple credit lines including $100 million on a 364-day facility, JPY100 billion on a five-year unsecured revolver, $1 billion on a five-year revolver, and $2 billion available through a Pre-Capitalized Securities Trust established in 2025.
  • Commercial transitional real estate delinquencies increased in prior years causing a rise in company-owned real estate but saw no additional delinquencies through the second quarter of 2026.
  • Commercial mortgage exposure performed well with virtually no delinquencies, foreclosures, or restructured loans over recent years.
  • Five-year average Return on Equity was 17.2% at year-end 2025, exceeding 10% annually for five years, while Return on Revenue averaged 30.5% over the same period.
  • Earnings are supported by lower benefits utilization in the U.S. and strong cancer product sales in Japan, partially offset by higher administrative expenses.
  • Aflac faces challenges in reversing premium decline trends due to market competition but continues to focus on client retention, product enhancements, and operational capabilities.
  • Aflac announced its first external reinsurance transaction in 2026 via Aflac Re Bermuda with Japan Post Insurance Company Ltd. for a block of whole life annuities.
  • The company remains a market leader in Japanese medical/cancer insurance and U.S. worksite supplemental medical insurance with a robust distribution model.
  • AM Best affirmed stable outlooks on numerous senior unsecured notes and subordinated debentures ranging from 2026 to 2052 in both USD and JPY denominations.