What changed in Aflac's 2023 10-K compared to 2022?

Across the narrative sections we track, Aflac (AFL) added 997 paragraphs, removed 897, and edited 542 between the 2022 and 2023 10-K filings. The biggest movers are Item 7A. Quantitative and Qualitative Disclosures About Market Risk (+435/−337), Item 7. Management's Discussion & Analysis (+281/−187), Item 5. Market for Registrant's Common Equity (+72/−157).

Did Aflac add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 96 new/edited paragraphs and 77 removed paragraphs versus the 2022 10-K.

What changed in Aflac's MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 281 new/edited paragraphs and 187 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did Aflac's Legal Proceedings (Item 3) change in 2023?

Item 3 shows 6 added/edited paragraphs and 5 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this AFL 10-K diff come from?

The source filings are Aflac's official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

AflacAFLEarnings & Financial Report

NYSE · Financials · Insurance - Life

Deep Analysis

Aflac Incorporated is an American insurance company and is the largest provider of supplemental insurance in the United States. It was founded in 1955 and is based in Columbus, Georgia. In the U.S., it underwrites a wide range of insurance policies, but is perhaps more known for its payroll deduction insurance coverage, which pays cash benefits when a policyholder has a covered accident or illness. The company states it "provides financial protection to more than 50 million people worldwide".

What changed in Aflac's 10-K — 2022 vs 2023

Top changes in Aflac's 2023 10-K

997 paragraphs added · 897 removed · 542 edited across 8 sections

Item 7A. Quantitative and Qualitative Disclosures About Market Risk+435 / −337 · 233 edited
Item 7. Management's Discussion & Analysis+281 / −187 · 114 edited
Item 5. Market for Registrant's Common Equity+72 / −157 · 47 edited
Item 1. Business+102 / −131 · 83 edited
Item 1A. Risk Factors+96 / −77 · 57 edited

Item 1. Business

Business — how the company describes what it does

83 edited+19 added−48 removed80 unchanged

2022 filing

2023 filing

A person seeking to acquire control, directly or indirectly, of a domestic insurance company or of any person controlling a domestic insurance company (in the case of Aflac, CAIC and TOIC, the Parent Company) must generally file with the NDOI an application for change of control containing certain information required by statute and published regulations and provide a copy to Aflac.

Aflac Re Bermuda is subject to regulation in Bermuda, where the Bermuda Monetary Authority (BMA) has broad administrative powers relating to granting and revoking licenses to transact reinsurance business, approval of specific reinsurance transactions, capital requirements and solvency standards, limitations on dividends to shareholders, the nature of and limitations on investments, and the filing of financial statements in accordance with prescribed or permitted accounting practices.

Aflac Re is subject to regulation in Bermuda, where the Bermuda Monetary Authority (BMA) has broad administrative powers relating to granting and revoking licenses to transact reinsurance business, approval of specific reinsurance transactions, capital requirements and solvency standards, limitations on dividends to shareholders, the nature of and limitations on investments, and the filing of financial statements in accordance with prescribed or permitted accounting practices.

In general, the insurance laws of the various jurisdictions establish supervisory agencies with broad administrative powers relating to, among other things: • granting and revoking licenses to transact business • regulating trade and claims practices • licensing of insurance agents and brokers • approval of policy forms and premium rates • standards of solvency and maintenance of specified policy benefit reserves and minimum loss ratio requirements • capital requirements • limitations on dividends to shareholders • the nature of and limitations on investments • deposits of securities for the benefit of policyholders • filing of financial statements prepared in accordance with statutory insurance accounting practices prescribed or permitted by regulatory authorities • periodic examinations of the market conduct, financial, and other affairs of insurance companies The insurance laws of Nebraska that govern Aflac's activities provide that the acquisition or change of “control” of a domestic insurer or of any person that controls a domestic insurer cannot be consummated without the prior approval of the Nebraska Department of Insurance (NDOI).

In general, the insurance laws of the various jurisdictions establish supervisory agencies with broad administrative powers relating to, among other things: • granting and revoking licenses to transact business • regulating trade and claims practices • licensing of insurance agents and brokers • approval of policy forms and premium rates • standards of solvency and maintenance of specified policy benefit reserves and minimum loss ratio requirements • capital requirements • limitations on dividends to shareholders • the nature of and limitations on investments • deposits of securities for the benefit of policyholders • filing of financial statements prepared in accordance with statutory insurance accounting practices prescribed or permitted by regulatory authorities • periodic examinations of the market conduct, financial, and other affairs of insurance companies The insurance laws of Nebraska that govern the Company's activities provide that the acquisition or change of “control” of a domestic insurer or of any person that controls a domestic insurer cannot be consummated without the prior approval of the Nebraska Department of Insurance (NDOI).

The councils are designed to create avenues in which employees can communicate and appreciate one another’s cultural differences. • Women and people of color comprise approximately 64% of the Parent Company’s board of directors. Employee Engagement and Culture The Company strives to have an engaged employee culture by developing programs including career development support and programs emphasizing work life balance.

The councils are designed to create avenues in which employees can communicate and appreciate one another’s cultural differences. • Women and/or people of color comprise approximately 64% of the Parent Company’s board of directors. Employee Engagement and Culture The Company strives to have an engaged employee culture by developing programs including career development support and programs emphasizing work life balance.

Under the new system, employees have access to descriptions and necessary skills for all job positions across the Company and are able to more proactively design their careers. Aflac U.S. recruiting efforts include partnerships with colleges and universities, including historically black colleges and universities, and civic organizations to attract diverse talent.

Under the system, employees have access to descriptions and necessary skills for all job positions across the Company and are able to more proactively design their careers. Aflac U.S. recruiting efforts include partnerships with colleges and universities, including historically black colleges and universities, and civic organizations to attract diverse talent.

AAM and AAMJ are reported in Corporate and Other; however, the assets that they manage are reported in the respective Aflac Japan and Aflac U.S. segments. In 2022, the Company established Aflac Re Bermuda Ltd. (Aflac Re Bermuda), a Bermuda domiciled insurer that reinsures certain policies issued by ALIJ.

AAM and AAMJ are reported in Corporate and other; however, the assets that they manage are reported in the respective Aflac Japan and Aflac U.S. segments. In 2022, the Company established Aflac Re, a Bermuda domiciled insurer that reinsures certain policies issued by ALIJ.

Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. The levels are company action, regulatory action, authorized control, and mandatory control. See Note 13 of the Notes to the Consolidated Financial Statements and the Liquidity and Capital Resources section of MD&A for additional information on RBC.

Throughout its 67-year history, the Company’s supplemental insurance policies have given policyholders the opportunity to focus on recovery, not financial stress. The Company has continued to develop and expand its product offerings over time. In Japan, the Company is cultivating an innovation-driven culture to meet the rapidly changing customer and societal needs.

Throughout its 68-year history, the Company’s supplemental insurance policies have given policyholders the opportunity to focus on recovery, not financial stress. The Company has continued to develop and expand its product offerings over time. In Japan, the Company is cultivating an innovation-driven culture to meet the rapidly changing customer and societal needs.

Business Banks Consumers in Japan rely on banks to provide not only traditional bank services, but also as one key source to provide insurance solutions and other services. At December 31, 2022, Aflac Japan had agreements with approximately 90% of the total number of banks in Japan to sell its products.

Business Banks Consumers in Japan rely on banks to provide not only traditional bank services, but also as one key source to provide insurance solutions and other services. At December 31, 2023, Aflac Japan had agreements with approximately 90% of the total number of banks in Japan to sell its products.

The Company’s principal business is supplemental health and life insurance products with the goal to provide customers the best value in supplemental insurance products in the United States (U.S.) and Japan. When a policyholder or insured gets sick or hurt, the Company pays cash benefits fairly and promptly for eligible claims.

The Company’s principal business is supplemental health and life insurance products with the goal to provide customers the best value in supplemental insurance products in Japan and the U.S. When a policyholder or insured gets sick or hurt, the Company pays cash benefits fairly and promptly for eligible claims.

Aflac Japan's goal is to further increase the percentage of women in line manager positions by 2025. • As of December 31, 2022, 49% of Aflac U.S. and the Parent Company employees located in the U.S. were people of color and 66% were women.

Aflac Japan's goal is to further increase the percentage of women in line manager positions by 2025. • As of December 31, 2023, 49% of Aflac U.S. and the Parent Company employees located in the U.S. were people of color and 66% were women.

Tillman Executive Vice President, General Counsel, Aflac Incorporated and Aflac, since 2014 58 (1) Unless specifically noted, the respective executive officer has held the occupation(s) set forth in the table for at least the last five years.

Tillman Executive Vice President, General Counsel, Aflac Incorporated and Aflac, since 2014 59 (1) Unless specifically noted, the respective executive officer has held the occupation(s) set forth in the table for at least the last five years.

Health and Wellness, a training and service program works to enhance organizational health, encourage healthy lifestyles among all U.S. employees, provide diverse wellness programs to meet a wide range of personal health needs, recognize employees for participating in healthier lifestyles activities, and support a positive corporate culture that is focused on celebrating and improving the quality of life for all U.S. employees. 10 Item 1.

See the risk factor below entitled, “Any decrease in the Company's financial strength or debt ratings may have an adverse effect on its competitive position and access to liquidity and capital” for more information.

The Company undertakes no obligation to update such forward-looking statements. • expect • anticipate • believe • goal • objective • may • should • estimate • intends • projects • will • assumes • potential • target • outlook The Company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements: • difficult conditions in global capital markets and the economy, including those caused by COVID-19 • defaults and credit downgrades of investments • global fluctuations in interest rates and exposure to significant interest rate risk • concentration of business in Japan • limited availability of acceptable yen-denominated investments • foreign currency fluctuations in the yen/dollar exchange rate • differing interpretations applied to investment valuations • significant valuation judgments in determination of expected credit losses recorded on the Company's investments • decreases in the Company's financial strength or debt ratings • decline in creditworthiness of other financial institutions • concentration of the Company's investments in any particular single-issuer or sector • major public health issues, including COVID-19 and any resulting or coincidental economic effects, on the Company's business and financial results • the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners • deviations in actual experience from pricing and reserving assumptions • ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives • interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems • subsidiaries' ability to pay dividends to the Parent Company • inherent limitations to risk management policies and procedures • operational risks of third party vendors • tax rates applicable to the Company may change • failure to comply with restrictions on policyholder privacy and information security • extensive regulation and changes in law or regulation by governmental authorities • competitive environment and ability to anticipate and respond to market trends • catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics (such as COVID-19), tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, terrorism or other acts of violence, and damage incidental to such events • ability to protect the Aflac brand and the Company's reputation • ability to effectively manage key executive succession • changes in accounting standards • level and outcome of litigation • allegations or determinations of worker misclassification in the United States 1 Item 1.

The Company undertakes no obligation to update such forward-looking statements. • expect • anticipate • believe • goal • objective • may • should • estimate • intends • projects • will • assumes • potential • target • outlook The Company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements: • difficult conditions in global capital markets and the economy, including inflation • defaults and credit downgrades of investments • global fluctuations in interest rates and exposure to significant interest rate risk • concentration of business in Japan • limited availability of acceptable yen-denominated investments • foreign currency fluctuations in the yen/dollar exchange rate • differing interpretations applied to investment valuations • significant valuation judgments in determination of expected credit losses recorded on the Company's investments • decreases in the Company's financial strength or debt ratings • decline in creditworthiness of other financial institutions • the Company's ability to attract and retain qualified sales associates, brokers, employees, and distribution partners • deviations in actual experience from pricing and reserving assumptions • ability to continue to develop and implement improvements in information technology systems and on successful execution of revenue growth and expense management initiatives • interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems • subsidiaries' ability to pay dividends to the Parent Company • inherent limitations to risk management policies and procedures • operational risks of third-party vendors • tax rates applicable to the Company may change • failure to comply with restrictions on policyholder privacy and information security • extensive regulation and changes in law or regulation by governmental authorities • competitive environment and ability to anticipate and respond to market trends • catastrophic events, including, but not limited to, as a result of climate change, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, major public health issues, terrorism or other acts of violence, and damage incidental to such events • ability to protect the Aflac brand and the Company's reputation • ability to effectively manage key executive succession • changes in accounting standards • level and outcome of litigation or regulatory inquiries • allegations or determinations of worker misclassification in the United States 1 Item 1.

The Company needs liquidity to pay its operating expenses, dividends on its common stock, interest on its debt, and liabilities. See the "Liquidity and Capital Resources" Item 7, MD&A, for more information. In the event the Company's current resources do not meet its needs, the Company may need to seek additional financing.

The Company needs liquidity to pay its operating expenses, dividends on its common stock, interest on its debt, and liabilities. See the Liquidity and Capital Resources section of Item 7. MD&A, for additional information. In the event the Company's current resources do not meet its needs, the Company may need to seek additional financing.

Aflac U.S. includes the insurance subsidiaries American Family Life Assurance Company of Columbus (Aflac); Continental American Insurance Company (CAIC), branded as Aflac Group Insurance (AGI); American Family Life Assurance Company of New York (Aflac New York); Tier One Insurance Company (TOIC); and Aflac Benefits Solutions (ABS), formerly Argus Dental & Vision, Inc., which provides a platform for Aflac Dental and Vision in the U.S.

Aflac U.S. includes the insurance subsidiaries American Family Life Assurance Company of Columbus (Aflac); Continental American Insurance Company (CAIC), branded as Aflac Group Insurance (AGI); American Family Life Assurance Company of New York (Aflac New York); Tier One Insurance Company (TOIC); and Aflac Benefits Solutions (ABS), which provides a platform for Aflac Dental and Vision in the U.S.

In the two decades since his U.S. debut, the Aflac Duck has become one of the most familiar advertising icons in the world, appearing in many commercials and countless print ads in both the U.S. and Japan. Today, the Aflac Duck is a helpmate who increases brand knowledge and connection.

In the time since his U.S. debut, the Aflac Duck has become one of the most familiar advertising icons in the world, appearing in many commercials and countless print ads in both the U.S. and Japan. Today, the Aflac Duck is a helpmate who increases brand knowledge and connection.

Human Resources divisions operate as centralized internal compensation functions to provide oversight and input to the respective management teams with the objective of providing compensation that is consistent with job scope, duties and responsibilities. The compensation function evaluates new-hire job offers, promotions and compensation adjustments with the goal of consistent and equitable compensation.

Human Resources divisions operate as centralized internal compensation functions to provide oversight and input to the respective management teams with the objective of providing compensation that is 10 Item 1. Business consistent with job scope, duties and responsibilities. The compensation function evaluates new-hire job offers, promotions and compensation adjustments with the goal of consistent and equitable compensation.

Similar laws apply in New York, the domiciliary jurisdiction of Aflac's New York insurance subsidiary. 7 Item 1. Business State insurance departments conduct periodic examinations of the books and records, financial reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years.

Similar laws apply in New York, the domiciliary jurisdiction of Aflac's New York insurance subsidiary. State insurance departments conduct periodic examinations of the books and records, financial reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years.

In Nebraska, control is generally presumed to exist if any person, directly or indirectly, acquires 10% or more of an insurance company or of any other person or entity controlling the insurance company. The 10% presumption is not conclusive and control may be found to exist at less than 10%.

In Nebraska, control is generally 7 Item 1. Business presumed to exist if any person, directly or indirectly, acquires 10% or more of an insurance company or of any other person or entity controlling the insurance company. The 10% presumption is not conclusive and control may be found to exist at less than 10%.

Examples of these types of legislation include the California Consumer Privacy Act (CCPA), the California Privacy Rights Act (CPRA), the UK General Data Protection Regulation (UK GDPR), the UK Data Protection Act of 2018 (UK DPA) and most recently, going into effect in 2023, the Connecticut Data Privacy Act (CDPA), the Utah Consumer Privacy Act (UCPA), the Virginia Consumer Data Protection Act (VCDPA) and the Colorado Privacy Act (CPA).

Examples of these types of legislation include the California Consumer Privacy Act (CCPA), the California Privacy Rights Act (CPRA), the UK General Data Protection Regulation (UK GDPR), the UK Data Protection Act of 2018 (UK DPA) and most recently, effective in 2023, the Connecticut Data Privacy Act (CDPA), the Utah Consumer Privacy Act (UCPA), the Virginia Consumer Data Protection Act (VCDPA) and the Colorado Privacy Act (CPA).

Examinations are generally carried out in cooperation with the insurance departments of other states under guidelines promulgated by the National Association of Insurance Commissioners (NAIC). In 2020, the NDOI and New York State Department of Financial Services (NYSDFS) conducted full-scope, risk-focused financial examinations on their respective state domiciled insurance entities.

Examinations are generally carried out in cooperation with the insurance departments of other states under guidelines promulgated by the National Association of Insurance Commissioners (NAIC). In 2024, the NDOI and the New York State Department of Financial Services (NYSDFS) will commence full-scope, risk-focused financial examinations on their respective state domiciled insurance entities.

Health and Wellness In 2022, Aflac Japan was certified, for the fifth consecutive year, as one of the top 500 Leading Companies in Health and Productivity Management under the Certified Health & Productivity Management Outstanding Organizations Recognition Program with Japan's Ministry of Economy, Trade and Industry.

Health and Wellness In 2023, Aflac Japan was certified, for the sixth consecutive year, as one of the top 500 Leading Companies in Health and Productivity Management under the Certified Health & Productivity Management Outstanding Organizations Recognition Program with Japan's Ministry of Economy, Trade and Industry.

For information on the Company's results of operations and financial information by segment, see Item 7. MD&A and Note 2 of the Notes to the Consolidated Financial Statements in this report.

For information on the Company's results of operations and financial information by segment, see Item 7. MD&A and Note 2 of the Notes to the Consolidated Financial Statements.

Business Diversity, Equity & Inclusion The Company’s corporate culture reflects its commitment to diversity, equity and inclusion at all levels of the Company. For example: • As of December 31, 2022, women account for 54% of Aflac Japan employees and 33% of those in leadership roles. Women also held 19% of senior management roles.

Diversity, Equity & Inclusion The Company’s corporate culture reflects its commitment to diversity, equity and inclusion at all levels of the Company. For example: • As of December 31, 2023, women account for 54% of Aflac Japan employees and 33% of those in leadership roles. Women also held 20% of senior management roles.

Certain provisions of the ACA have been and may continue to be subject to challenge through litigation, the ultimate effects of which on the ACA are uncertain.

Certain provisions of the ACA have been and may continue to be subject to challenge through litigation, the ultimate effects of which on the ACA are uncertain. See Item 1A.

See the risk factor entitled, "Extensive regulation and changes in legislation can impact profitability and growth" for more information. • Dodd-Frank Act Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) and regulations issued thereunder, in particular rules to require central clearing for certain types of derivatives, may have an impact on the Company's derivative activity, including activity on behalf of Aflac Japan.

Risk Factors for the risk factor entitled, "Extensive regulation and changes in legislation can impact profitability and growth" for additional information. • Dodd-Frank Act Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) and regulations issued thereunder, in particular rules to require central clearing for certain types of derivatives, may have an impact on the Company's derivative activity, including activity on behalf of Aflac Japan. 8 Item 1.

The shares were registered for resale and, pursuant to the Shareholder Agreement, subject to certain exceptions, the Company has agreed that it will not transfer its shares of Trupanion, Inc. common stock during a restricted period ending on November 13, 2023.

The shares were registered for resale and, pursuant to the Shareholder Agreement, subject to certain exceptions, the Company agreed that it would not transfer its shares of Trupanion, Inc. common stock during a restricted period that ended on November 13, 2023.

Aflac Heartful Services has established a barrier-free work environment and provides, among other things, specialized training, specially-trained supervisors and development opportunities to support those with disabilities. Of Aflac Heartful Services’ 154 employees as of December 31, 2022, 124 have a disability.

Aflac Heartful Services has established a barrier-free work environment and provides, among other things, specialized training, specially-trained supervisors and development opportunities to support those with disabilities. Of Aflac Heartful Services’ 152 employees as of December 31, 2023, 120 have a disability.

For additional information regarding Aflac Japan's operations and regulations, see the "Aflac Japan Segment" subsection of the MD&A and Notes 2 and 13 of the Notes to the Consolidated Financial Statements in this report. AFLAC U.S.

For additional information regarding Aflac Japan's operations and regulations, see the Aflac Japan Segment subsection of Item 7. MD&A and Notes 2 and 13 of the Notes to the Consolidated Financial Statements. AFLAC U.S.

Miller President, Aflac U.S., since 2023; Deputy President, Aflac U.S., from 2022 until 2023; Executive Vice President, President of Group and Individual Benefits Division, Aflac U.S., from 2021 until 2022; Executive Vice President, Chief Operating Officer, Aflac U.S., from 2018 until 2021; Senior Vice President, Chief Administrative Officer, Aflac U.S., from 2016 until 2018 54 Albert A.

Aflac Japan was represented by approximately 7,400 sales agencies at the end of 2022, with approximately 110,000 licensed sales associates employed by those agencies, including individual agencies. Dai-ichi Life Aflac Japan's alliance with Dai-ichi Life was launched in 2001, and approximately 40,000 Dai-ichi Life representatives offer Aflac's cancer products.

Aflac Japan was represented by approximately 7,000 sales agencies at the end of 2023, with approximately 113,000 licensed sales associates employed by those agencies, including individual agencies. Dai-ichi Life Aflac Japan's alliance with Dai-ichi Life was launched in 2001, and approximately 37,000 Dai-ichi Life representatives offer Aflac's cancer products.

See the risk factor below entitled, “The Company is exposed to significant interest rate risk, which may adversely affect its results of operations, financial condition and liquidity” for more information. See the “Investments” and “Results of Operations by Segment” sections of Item 7, MD&A, for more information.

See the risk factor below entitled, “The Company is exposed to significant interest rate risk, which may adversely affect its results of operations, financial condition and liquidity” for additional information. See the Investments and Results of Operations by Segment sections of Item 7. MD&A, for additional information.

AAMJ is licensed as a discretionary asset manager under the Japan Financial Instruments and Exchange Act and is subject to rules of the Japan Investment Advisors Association, a self-regulatory organization with mandatory membership for Japan investment managers. Effective January 19, 2021, AAM is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940.

AAMJ is licensed as a discretionary asset manager under the Japan Financial Instruments and Exchange Act and is subject to rules of the Japan Investment Advisors Association, a self- 9 Item 1. Business regulatory organization with mandatory membership for Japan investment managers. AAM is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940.

Over the last several years, processes have developed to support the data subject request process required by CCPA, privacy impact assessments have been implemented as required by CPRA and a dedicated privacy and security center has been added to the Company website to provide consumers with information about the use of and protection of their data.

Amos Chairman, Aflac Incorporated and Aflac, since 2001; Chief Executive Officer, Aflac Incorporated and Aflac, since 1990; President, Aflac, from 2017 until 2018; President, Aflac Incorporated, from 2018 until 2020 71 Steven K.

Amos Chairman, Aflac Incorporated and Aflac, since 2001; Chief Executive Officer, Aflac Incorporated and Aflac, since 1990; President, Aflac Incorporated, since 2024 and from 2018 until 2020 72 Steven K.

Investment and Markets Risk Factors Difficult conditions in global capital markets and the economy, including those caused by COVID-19, could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business.

Investment and Markets Risk Factors Difficult conditions in global capital markets and the economy could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business.

Daido Life In 2013, Aflac Japan and Daido Life Insurance entered into an agreement for Daido to sell Aflac Japan's cancer insurance products specifically to the Hojinkai market, which is an association of small businesses.

MD&A for additional information about this alliance. Daido Life In 2013, Aflac Japan and Daido Life Insurance entered into an agreement for Daido to sell Aflac Japan's cancer insurance products specifically to the Hojinkai market, which is an association of small businesses.

This can include changes in the global economy, the company's assets, strategy, or management, shifts in the dynamics of the industries in which they compete, their access to additional funding, and the overall health of the credit markets.

This can include changes in the global economy, the issuer's assets, strategy, or management, shifts in the dynamics of the industries in which the issuer competes, the issuer's access to additional funding, and the overall health of the credit markets.

While the Company has identified assets impacted or expected to be impacted by rising interest rates and economic contraction, other investments not identified to date may also be impacted. The availability of new investments in certain private market asset classes, such as middle market loans, commercial mortgages and transitional real estate, has been and may continue to be limited.

The Company has identified assets impacted or expected to be impacted by rising interest rates and economic contraction, other investments not identified to date may also be impacted. The availability of new investments in certain private market asset classes has been and may continue to be limited.

For many years, the standard for protection and treatment of that data was benchmarked by privacy and security provisions of the federal Gramm-Leach-Bliley Act of 1999 (GLBA) and in the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Personally identifiable information is used in support of many of the Company's business processes. For many years, the standard for protection and treatment of that data was benchmarked by privacy and security provisions of the federal Gramm-Leach-Bliley Act of 1999 (GLBA) and in the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Women also occupied 50% of leadership roles located in the U.S. and 31% of senior management roles. In 2022, 62% of new hires located in the U.S. were people of color and 69% were women. • Established in 2009, Aflac Heartful Services Co., Ltd. (Aflac Heartful Services), a subsidiary of Aflac Japan, promotes the hiring of employees with disabilities.

Women also occupied 51% of leadership roles located in the U.S. and 37% of senior management roles. In 2023, 57% of new hires located in the U.S. were people of color and 68% were women. • Established in 2009, Aflac Heartful Services Co., Ltd. (Aflac Heartful Services), a subsidiary of Aflac Japan, promotes the hiring of employees with disabilities.

Brodén Executive Vice President, Chief Financial Officer, Aflac Incorporated, since 2020; Executive Vice President, Aflac, since 2020; Treasurer, Aflac, since 2017; Treasurer, Aflac Incorporated from 2017 until 2021; Senior Vice President, Aflac Incorporated and Aflac, from 2017 until 2020 44 Frederick J.

Lake, II President, Aflac International, since 2014; Chairman and Representative Director, Aflac Japan, since 2018; Chairman, Aflac Japan, from 2008 until 2018 61 Virgil R.

Lake II President, Aflac International, since 2014; Chairman and Representative Director, Aflac Japan, since 2018 62 Virgil R.

Risk Factors Japan is the largest market for the Company's insurance products, and the Company owns substantial holdings in Japan Government Bonds (JGBs). Government actions to stimulate the economy affect the value of the Company's existing holdings, its reinvestment rate on new investments in JGBs or other yen-denominated assets, and consumer behavior relative to the Company's suite of insurance products.

Government actions to stimulate the economy affect the value of the Company's existing 13 Item 1A. Risk Factors holdings, its reinvestment rate on new investments in JGBs or other yen-denominated assets, and consumer behavior relative to the Company's suite of insurance products.

Dyslin Executive Vice President, Global Chief Investment Officer, Aflac, since 2023; President, Aflac Asset Management LLC, since 2023; Deputy Global Chief Investment Officer, Aflac, from 2021 until 2023; Senior Managing Director, Global Head of Credit and Strategic Investment Opportunities, Aflac, from 2017 until 2021 57 June Howard Chief Accounting Officer, Aflac Incorporated and Aflac, since 2010; Senior Vice President, Financial Services, Aflac Incorporated and Aflac, since 2010 56 Masatoshi Koide President and Representative Director, Aflac Japan, since 2018; President and Chief Operating Officer, Aflac Japan from 2017 until 2018 62 Charles D.

Two FSA regulations applicable to Aflac Japan are outlined below. ▪ Privacy and Cybersecurity With regard to personal information obtained from policyholders, the insured, or others, Aflac Japan is regulated in Japan by the Act on the Protection of Personal Information (APPI) and guidelines issued by FSA and other governmental authorities. • FSA Solvency Standard The FSA maintains a solvency standard, the solvency margin ratio (SMR), which is used by Japanese regulators to monitor the financial strength of insurance companies.

The Company's results of operations are materially affected by conditions in the global capital markets and the global economy generally, including in its two primary operating markets of the U.S. and Japan. Economies globally experienced significant inflation in 2022, with inflation rates and impact varying by country.

For information on the reporting segments see the Result of Operations by Segment section of Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A). The Company is authorized to conduct insurance business in all 50 states, the District of Columbia, several U.S. territories and Japan. The Company’s website is: www.aflac.com.

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A). The Company is authorized to conduct insurance business in all 50 states, the District of Columbia, several U.S. territories, and Japan. The Company’s website is: www.aflac.com. Information included on the Company’s website is not incorporated by reference into this filing.

Broad economic factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets, inflation, and strain with the U.S. supply chain all affect the business and economic environment and, indirectly, the amount and profitability of the Company's business.

Broad economic factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets and inflation, as well as ongoing central bank responses to these factors, all affect the business and economic environment and, indirectly, the amount and profitability of the Company's business.

The Company may need to adjust its investment strategy and/or be forced to liquidate investments to pay claims. In addition, the increase in the difference between interest rates in the U.S. and Japan contributed to a weakening of the yen over 2022, which had the effect of suppressing the Company's current period results in relation to the comparable prior period.

In addition, the increase in the difference between interest rates in the U.S. and Japan contributed to a weakening of the yen over 2023, which had the effect of suppressing the Company's current period results in relation to the comparable prior period.

These investments are experiencing and may continue to experience higher credit losses, credit rating downgrades and/or defaults and the Company has examined in each case whether a reduction in size of the holding is appropriate. In addition, volatility in oil prices could have a continued adverse impact on issuers in the energy sector.

These investments are experiencing and may continue to experience higher credit losses, credit rating downgrades and/or defaults and a deterioration in the value of collateral in the case of secured investments. The Company has examined in each case whether a reduction in size of the holding is appropriate.

Business ITEM 1. BUSINESS OVERVIEW Aflac Incorporated (the Parent Company) was incorporated in 1973 under the laws of the state of Georgia. The Parent Company and its subsidiaries (collectively, the Company) provide financial protection to more than 50 million people worldwide.

Factors unique to the Company's securities including contractual protections such as financial covenants or relative position in the issuer's capital structure also influence the value of the Company's holdings. Most of the Company's investments carry a rating by one or more of the Nationally Recognized Statistical Rating Organizations (NRSROs or rating agencies).

Market volatility and recessionary pressures could result in significant realized or unrealized losses due to severe price declines driven by increases in interest rates or credit spreads, defaults in payment of principal or interest, or credit rating downgrades. Japan is the largest market for the Company's insurance products, and the Company owns substantial holdings in Japan Government Bonds (JGBs).

CORPORATE AND OTHER The Company's other operations include the Parent Company, Aflac Global Ventures LLC and its subsidiaries, asset management subsidiaries, results of reinsurance activities and a printing subsidiary.

Segment subsection of Item 7. MD&A and Notes 2 and 13 of the Notes to the Consolidated Financial Statements. CORPORATE AND OTHER The Company's other operations include the Parent Company, Aflac Global Ventures LLC and its subsidiaries, asset management subsidiaries, results of reinsurance activities including Aflac Re Bermuda Ltd. (Aflac Re), and a printing subsidiary.

Riggieri Senior Vice President, Global Chief Risk Officer and Chief Actuary, Aflac Incorporated, since 2018; Senior Vice President, Corporate Actuary, Aflac, from 2016 until 2018 67 Audrey B.

Riggieri Senior Vice President, Global Chief Risk Officer, Aflac Incorporated, since 2018; Chief Actuary, Aflac Incorporated, from 2018 until 2023 68 Frederic J.

(Japan Post Co.) selling Aflac Japan's cancer product increased to more than 20,000. Japan Post Insurance Co., Ltd. (Japan Post Insurance) offers Aflac Japan cancer products through its 76 directly managed offices. Additionally, in April 2022, approximately 10,000 employees of Japan Post Co. were transferred to Japan Post Insurance.

(Japan Post Co.) selling Aflac Japan's cancer product increased to more than 20,000. Japan Post Insurance Co., Ltd. (Japan Post Insurance) offers Aflac Japan cancer products through its 76 directly managed offices responsible for corporate sales and 623 service departments in charge of individual sales.

See the Liquidity and Capital Resources section of Item 7. MD&A for additional information on SMR, including a discussion of measures the Company has taken to mitigate the sensitivity of Aflac Japan's SMR. Japan Companies Act Aflac Japan dividend distributions to the Parent Company are subject to permitted dividend capacity under the Japan Companies Act.

Aflac Japan's SMR is sensitive to interest rate, credit spread and foreign exchange rate changes. See the Liquidity and Capital Resources section of Item 7. MD&A for additional information on SMR, including a discussion of measures the Company has taken to mitigate the sensitivity of Aflac Japan's SMR.

Policyholder Protection The Japanese insurance industry has a policyholder protection corporation that provides funds for the policyholders of insolvent insurers. For additional information, see the policyholder protection section of the MD&A.

Japan Companies Act Aflac Japan dividend distributions to the Parent Company are subject to permitted dividend capacity under the Japan Companies Act. Policyholder Protection The Japanese insurance industry has a policyholder protection corporation that provides funds for the policyholders of insolvent insurers. For additional information, see the Policyholder Protection section of Item 7. MD&A.

Credit related losses that are not temporary in nature would also affect the Company's solvency ratios in the U.S. and Japan. Aflac Japan has certain regulatory accounting requirements for realizing impairments that could be triggered by credit-related losses, which may be different from U.S. GAAP and statutory requirements.

Aflac Japan has certain regulatory accounting requirements for realizing impairments that could be triggered by credit-related losses, which may be different from U.S. GAAP and statutory requirements. These impairment losses could negatively impact Aflac Japan's earnings, and the corresponding dividends and capital deployment.

Japan Post Group has informed Aflac Japan that the transferred employees' responsibilities will include sales of Japan Post Insurance products and Aflac Japan cancer products but will not include sales of other financial products. See the "Aflac Japan Segment" subsection of MD&A for more about this alliance.

Additionally, in April 2022, approximately 10,000 employees of Japan Post Co. were transferred to Japan Post Insurance. Japan Post Group has informed Aflac Japan that the transferred employees' responsibilities will include sales of Japan Post Insurance products and Aflac Japan cancer products but will not include sales of other financial products. See the Aflac Japan Segment subsection of Item 7.

On November 10, 2022, the Company and Trupanion announced a joint venture between ALIJ and Trupanion to provide pet insurance in Japan. For additional information on the Company's other operations, see the "Corporate and Other" subsection of the MD&A and Note 8 in the Notes to the Consolidated Financial Statements.

For additional information on the Company's other operations, see the Corporate and other subsection of Item 7. MD&A and Note 8 of the Notes to the Consolidated Financial Statements.

Business independent contractors and are paid commissions based on first-year and renewal premiums from their sales of insurance products. Consumer Markets While Aflac U.S. primarily markets its insurance products at the worksite, Aflac U.S. is also expanding its distribution strategy to directly reach consumers outside of the traditional worksite through digital lead generation.

Consumer Markets While Aflac U.S. primarily markets its insurance products at the worksite, Aflac U.S. is also expanding its distribution strategy to directly reach consumers outside of the traditional worksite through digital lead generation. Competitive Markets Aflac U.S. competes against several supplemental insurance carriers on a national and regional basis.

At the same time, Aflac Japan complements this core business with similarly profitable first sector protection products as outlined below. Third Sector Insurance Products Cancer Cancer Insurance Aflac Japan pioneered the cancer insurance market in Japan in 1974, and remains the number one provider of cancer insurance in Japan today.

Third Sector Insurance Products Cancer Cancer Insurance Aflac Japan pioneered the cancer insurance market in Japan in 1974, and remains the number one provider of cancer insurance in Japan today.

Work Leave Insurance Aflac Japan’s Work Leave Insurance offers benefits for relatively short-term hospitalization and home care associated with work leave of less than a year. It is a product that meets the growing need for leave benefits, especially for employees of small and medium-sized companies.

It is a product that meets the growing need for leave benefits, especially for employees of small and medium-sized companies.

Moreover, Aflac U.S. believes that its products are distinct from competitive offerings given its product focus (including features, benefits and claims service model), distribution capabilities and brand awareness. Since Aflac products provide an additional level of financial protection for policyholders, the Company believes the increased financial exposure some employees may face creates a favorable opportunity for Aflac U.S. products.

Since Aflac products provide an additional level of financial protection for policyholders, the Company believes the increased financial exposure some employees may face creates a favorable opportunity for Aflac U.S. products.

The Company has evaluated its holdings and identified investments in areas such as commercial real estate, including mortgages, consumer discretionary spending, issuers with higher leverage, and emerging markets issuers as the most exposed to rising interest rates, an economic downturn and the continuing effects of the COVID-19 global pandemic.

The Company has evaluated its holdings and identified investments in areas such as commercial real estate and highly leveraged companies as the most exposed to rising interest rates and an economic downturn.

Cybersecurity continues to be an area of evolving focus for legislation and regulatory activity. Industry regulators as well as the federal government have updated existing standards and increased their focus on enforcement. For example, the National Institute of Standards and Technology (NIST) issued enhanced security guidelines of the software supply chain and NYSDFS published increased security guidelines related to ransomware.

Cybersecurity continues to be an area of evolving focus for legislation and regulatory activity. In addition to the information required by Item 1C. Cybersecurity of this report, industry regulators as well as the federal government have updated existing standards and increased their focus on enforcement.

Beaver Senior Vice President, Chief Financial Officer, Aflac U.S., since 2019; Senior Vice President, Financial Planning and Analysis, Aflac Incorporated, from 2018 until 2019; Senior Vice President, Global Strategic Projects, Corporate Financial Planning and Analysis, Aflac Incorporated, from 2017 until 2018 58 Max K.

Beaver Executive Vice President, Chief Financial Officer, Aflac Japan, since 2024; First Senior Vice President, Deputy Chief Financial Officer, Aflac Japan, from 2023 until 2024; Senior Vice President, Chief Financial Officer, Aflac U.S., from 2019 until 2023; Senior Vice President, Financial Planning and Analysis, Aflac Incorporated, from 2018 until 2019 59 Robin L.

The Company also entered into an alliance agreement with Trupanion, Inc. to sell pet insurance in worksites in the U.S., subject to certain exceptions, and to explore on an exclusive basis potential 9 Item 1. Business distribution opportunities for pet insurance in Japan.

The Company also entered into an alliance agreement with Trupanion, Inc. to sell pet insurance in worksites in the U.S., subject to certain exceptions. In December 2023, the Company and Trupanion announced their decision not to pursue joint development of pet insurance in Japan.

The examinations covered the reporting period January 1, 2016 – December 31, 2019. There were no material findings contained in the NDOI or NYSDFS final exam reports. In 2023, the NYSDFS will commence a routine market conduct examination on Aflac New York of the five-year period ended December 31, 2022.

The examinations will cover the reporting period January 1, 2020 – December 31, 2023. In 2023, the NYSDFS commenced a routine market conduct examination on Aflac New York covering the five-year period ended on December 31, 2022 that is currently ongoing.

Any change in the rating agencies' approach to evaluating credit and assigning an opinion could negatively impact the fair value of the Company's portfolio. Any expected or sustained credit deterioration of the Company's investments will negatively impact the Company's net income and capital position through credit impairment and other credit related losses.

Most of the Company's investments carry a rating by one or more of the Nationally Recognized Statistical Rating Organizations (NRSROs or rating agencies). Any change in the rating agencies' approach to evaluating credit and assigning an opinion could negatively impact the fair value of the Company's portfolio.

As a result, more costs have been shifted to Japanese consumers, who in turn have become increasingly interested in insurance products that help them manage those costs. In addition, since 2020, the pandemic has accelerated digitization and significantly heightened customer awareness of potential financial and health care burdens.

As a result, more costs have been shifted to Japanese consumers, who in turn have become increasingly interested in insurance products that help them manage those costs. Aflac Japan has responded to this consumer need by enhancing existing products and developing new products.

The Dodd-Frank Act also established a Federal Insurance Office (FIO) under the U.S. Treasury Department to monitor all aspects of the insurance industry and of lines of business other than certain health insurance, certain long-term care insurance and crop insurance. 8 Item 1.

Department of the Treasury to monitor all aspects of the insurance industry and of lines of business other than certain health insurance, certain long-term care insurance and crop insurance. • Privacy and Cybersecurity In the absence of a comprehensive federal privacy law, states are making a push towards privacy legislation.

Aflac Japan has responded to this consumer need by enhancing existing products and developing new products, such as a nursing care product introduced in 2021 and work leave insurance introduced in 2022. The focus at Aflac Japan remains on maintaining leadership in third sector insurance products that are less interest rate sensitive and have strong and stable margins.

The focus at Aflac Japan remains on maintaining leadership in third sector insurance products that are less interest rate sensitive and have strong and stable margins. At the same time, Aflac Japan complements this core business with similarly profitable first sector protection products as outlined below.

Income Support Insurance Aflac Japan's Income Support Insurance provides fixed-benefit amounts in the event that a policyholder is unable to work due to significant illness or injury. 3 Item 1. Business Other Nursing Care Insurance Aflac Japan's Nursing Care Insurance provides coverage for out-of-pocket costs incurred when receiving public nursing care services.

In September 2023, Aflac Japan launched a new medical insurance product designed to appeal to younger policyholders with basic needs and existing policyholders who desire additional or updated coverage. Income Support Insurance Aflac Japan's Income Support Insurance provides fixed-benefit amounts in the event that a policyholder is unable to work due to significant illness or injury. 3 Item 1.

These impairment losses could negatively impact Aflac Japan's earnings, and the corresponding 14 Item 1A. Risk Factors dividends and capital deployment. The Company is also subject to the risk that any collateral providing credit enhancement to the Company's investments could deteriorate. The Company is also exposed to the general movement in credit market spreads.

The Company is also subject to the risk that any collateral providing credit enhancement to the Company's investments could deteriorate. 14

Although some markets have proven resilient in the face of inflation control measures, continued weakening of global financial markets impacts the creditworthiness and value of the Company's existing investment portfolio, influences opportunities for new investments, and may contribute to generally weak economic fundamentals, which can have a negative impact on its results of operations and financial positions.

Higher interest rates and softer economic conditions could impact the creditworthiness and value of the Company's existing investment portfolio, influence opportunities for new investments and have a negative impact on the Company's results of operations and financial positions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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2022 filing

2023 filing

As indicated in the MD&A, the Company has determined that the unhedged U.S. dollar-denominated investment portfolio acts as a natural economic currency hedge of a portion of the Company’s investment in Aflac Japan against erosion of economic value.

As indicated in MD&A, the Company has determined that the unhedged U.S. dollar-denominated investment portfolio acts as a natural economic currency hedge of a portion of the Company’s investment in Aflac Japan against erosion of economic value.

(ISDA) agreements and other documentation. Most of the ISDA agreements also include Credit Support Annexes (CSAs) provisions, which generally provide for two-way collateral postings at the first dollar of exposure. In addition, a significant portion of the derivative transactions have provisions that give the counterparty the right to terminate the transaction upon a downgrade of Aflac’s financial strength rating.

(ISDA) agreements and other documentation. Most of the ISDA agreements also include Credit Support Annexes (CSAs), which generally provide for two-way collateral postings at the first dollar of exposure. In addition, a significant portion of the derivative transactions have provisions that give the counterparty the right to terminate the transaction upon a downgrade of Aflac’s financial strength rating.

Department of Justice, state attorneys general, the U.S. Commodity Futures Trading Commission, and the U.S. Treasury, including the Internal Revenue Service (IRS), in the U.S.

Department of Justice, state attorneys general, the U.S. Commodity Futures Trading Commission, and the U.S. Department of the Treasury, including the Internal Revenue Service (IRS), in the U.S.

The valuation of the Company's investments and derivatives includes methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may adversely affect the Company's results of operations or financial condition. The Company reports a significant amount of its fixed maturity securities and other financial instruments at fair value.

For more information regarding unhedged U.S. dollar-denominated securities, see the risk factor above entitled, “Lack of availability of acceptable yen-denominated investments could adversely affect the Company’s results of operations, financial position or liquidity”. See the "Currency Risk" subsection of Item 7A, Quantitative and Qualitative Disclosures about Market Risk for more information.

For additional information regarding unhedged U.S. dollar-denominated securities, see the risk factor above entitled, “Lack of availability of acceptable yen-denominated investments could adversely affect the Company’s results of operations, financial position or liquidity”. See the Currency Risk subsection of Item 7A. Quantitative and Qualitative Disclosures about Market Risk for additional information.

Aflac's insurance subsidiaries are subject to complex laws and regulations that are administered and enforced by a number of governmental authorities, that exercise a degree of interpretive latitude, including the FSA and Ministry of Finance (MOF) in Japan, state insurance regulators, the BMA in Bermuda, the SEC, the NAIC, the FIO, the U.S.

The Company's insurance subsidiaries are subject to complex laws and regulations that are administered and enforced by a number of governmental authorities, that exercise a degree of interpretive latitude, including the FSA and Ministry of Finance (MOF) in Japan, state insurance regulators, the BMA in Bermuda, the SEC, the NAIC, the FIO, the U.S.

It is uncertain what long-term effect these developments will have on the Company’s results of operations or financial condition, but any such effects could be material. See the "Aflac Japan Segment" section of Item 7. MD&A for more information.

It is uncertain what long-term effect these developments will have on the Company’s results of operations or financial condition, but any such effects could be material. See the Aflac Japan Segment section of Item 7. MD&A for additional information.

In addition, changes in the overall legal or regulatory environment may, even absent any particular regulator's or enforcement authority's interpretation of an issue changing, cause the Company to change its views regarding the actions it needs to take from a legal or regulatory risk management perspective.

Additionally, changes in the overall legal or regulatory environment may, even absent any particular regulator's or enforcement authority's interpretation of an issue changing, cause the Company to change its views regarding the actions it needs to take from a legal or regulatory risk management perspective.

Changes to accounting standards could have a material adverse effect on the Company's results of operations and financial condition. See Note 1 of the Notes to the Consolidated Financial Statements for more information. The Company faces risks related to litigation, regulatory investigations and inquiry and other matters.

Changes to accounting standards could have a material adverse effect on the Company's results of operations and financial condition. For additional information, see Note 1 of the Notes to the Consolidated Financial Statements. The Company faces risks related to litigation, regulatory investigations and inquiry and other matters.

Allegations or determinations of agent misclassification could adversely affect the Company’s results of operations, financial condition and liquidity. A majority of the Company's U.S. sales force is, and has historically been, comprised of independent agents.

Risk Factors Allegations or determinations of agent misclassification could adversely affect the Company’s results of operations, financial condition and liquidity. A majority of the Company's U.S. sales force is, and has historically been, comprised of independent agents.

If the Company's subsidiaries fail to meet the minimum capital or operational requirements established by its respective regulators, they could be subject to examination or corrective action, or the Company's financial strength ratings could be downgraded, or both.

Risk Factors If the Company's subsidiaries fail to meet the minimum capital or operational requirements established by its respective regulators, they could be subject to examination or corrective action, or the Company's financial strength ratings could be downgraded, or both.

Any decrease in the Company's financial strength or debt ratings may have an adverse effect on its competitive position and access to liquidity and capital.

Risk Factors Any decrease in the Company's financial strength or debt ratings may have an adverse effect on its competitive position and access to liquidity and capital.

Any violations of or deviation from laws, regulations, internal or external codes or standards of normative behavior, or perceptions of such violations or deviations, by the Company's employees or by independent sales agents could adversely impact the Company's reputation and brand value, financial condition and results of operations.

Negative events or developments affecting any one of these counterparties could have an adverse effect on the Company's financial position or results of operations. All of these risks related to exposure to other financial institutions could adversely impact the Company's consolidated results of operations and financial condition.

The exchange rates prevailing at the time of dividend payment may differ from the exchange rates prevailing at the time the yen profits were earned. The Parent Company utilizes forward contracts to accomplish a dual objective of hedging foreign currency exchange rate risk related to dividend payments by Aflac Japan, and reducing enterprise-wide hedge costs.

With regard to personal information obtained from policyholders, the insured, or others, Aflac Japan is regulated in Japan by the APPI and guidelines issued by FSA and other governmental authorities. Various state laws in the U.S. address the unauthorized access and acquisition of personal information and the use and disclosure of individually identifiable health data.

With regard to personal information obtained from policyholders, the insured, or others, Aflac Japan is regulated in Japan by the APPI and guidelines issued by FSA and other governmental authorities. 23 Item 1A. Risk Factors Various state laws in the U.S. address the unauthorized access and acquisition of personal information and the use and disclosure of individually identifiable health data.

Additionally, the Company is exposed to currency risk when yen cash flows are converted into U.S. dollars, resulting in changes in the Company's U.S. dollar-denominated cash flows and earnings when exchange gains or losses, 17 Item 1A. Risk Factors respectively, are realized.

The Company's insurance operations are exposed to the risk of catastrophic events including, but not necessarily limited to, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, and terrorism or other acts of violence.

This may necessitate changes to the Company's practices that may, in some cases, limit its ability to grow or otherwise negatively impact the profitability of the Company's business.

This may necessitate changes to the Company's practices that may, in some cases, limit its ability to grow or otherwise negatively impact the profitability of the Company's business. 24 Item 1A.

The loss of the services of one or more of the Company's senior executives could significantly undermine its management expertise, and the Company's business could be adversely affected. 26 Item 1A. Risk Factors Changes in accounting standards issued by the Financial Accounting Standard Boards (FASB) or other standard-setting bodies may adversely affect the Company's financial statements.

The loss of the services of one or more of the Company's senior executives could significantly undermine its management expertise, and the Company's business could be adversely affected. Changes in accounting standards issued by the Financial Accounting Standard Boards (FASB) or other standard-setting bodies may adversely affect the Company's financial statements.

Compliance with applicable laws and regulations is time consuming and personnel-intensive, and changes in these laws and regulations may materially increase the Company's direct and indirect compliance and other expenses of doing business, thus having a material adverse effect on the Company's financial condition and results of operations. See the “Government Regulation” subsections of Item 1, Business, for more information.

Compliance with applicable laws and regulations is time consuming and personnel-intensive, and changes in these laws and regulations may materially increase the Company's direct and indirect compliance and other expenses of doing business, thus having a material adverse effect on the Company's financial condition and results of operations. For additional information, see the Government Regulation subsections of Item 1. Business.

Risk Factors security laws, requirements, and new regulations may result in cost increases due to necessary systems changes, new limitations or constraints on the Company's business models, the development of new administrative processes, and the effects of potential noncompliance by the Company's business associates.

Compliance with new privacy and security laws, requirements, and new regulations may result in cost increases due to necessary systems changes, new limitations or constraints on the Company's business models, the development of new administrative processes, and the effects of potential noncompliance by the Company's business associates.

The Company’s foreign exchange derivatives are typically shorter-dated than the underlying U.S. dollar-denominated investments being hedged, which creates roll-over risks within the hedging program that could increase the cost of such derivatives.

The settlement of the foreign exchange derivatives is reported in the investing activities section of the Company’s consolidated statements of cash flows in the line item “Settlement of derivatives, net.” See the risk factor entitled “The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate”, the "Hedging Activities" subsection of Item 7, MD&A, and the "Currency Risk" subsection of Item 7A.

The settlement of the foreign exchange derivatives is reported in the investing activities section of the Company’s consolidated statements of cash flows in the line item settlement of derivatives, net. See the risk factor entitled “The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate”, the Hedging Activities subsection of Item 7.

For example, at December 31, 2022, the Company had agreements with 359 banks to market Aflac's products in Japan. Sales through these banks represented 4.0% of Aflac Japan's new annualized premium sales in 2022. Any material adverse effect on these or other financial institutions could also have an adverse effect on the Company's sales.

For example, at December 31, 2023, the Company had agreements with 360 banks to market Aflac's products in Japan. Sales through these banks represented 3.3% of Aflac Japan's new annualized premium sales in 2023. Any material adverse effect on these or other financial institutions could also have an adverse effect on the Company's sales.

Further, regulatory authorities periodically re-examine existing laws and regulations applicable to insurance companies and their products. Changes in these laws and regulations, or in interpretations thereof, could have a material adverse effect on the Company's financial condition and results of operations.

Risk Factors Company depends on those entities for dividends and other payments to generate the funds necessary to meet its debt service and other obligations, to pay dividends on and conduct repurchases of its common stock, and to make investments into its subsidiaries or external opportunities.

Because the Parent Company conducts its operations through its operating subsidiaries, the Parent Company depends on those entities for dividends and other payments to generate the funds necessary to meet its debt service and other obligations, to pay dividends on and conduct repurchases of its common stock, and to make investments into its subsidiaries or external opportunities.

Catastrophic events, including as a result of climate change, could adversely affect the Company's financial condition and results of operations as well as the availability of the Company’s infrastructure and systems.

Catastrophic events, including those as a result of climate change or major public health issues, could adversely affect the Company's financial condition and results of operations as well as the availability of the Company’s infrastructure and systems.

The Company is also developing new and innovative products and enhancing existing products. The Company will continue to incur expenses related to, among other things, investments in digital capabilities and product innovation.

These factors require the Company to anticipate market trends and make changes to differentiate the Company's products and services from those of its competitors. The Company also faces potential 25 Item 1A.

These factors require the Company to anticipate market trends and make changes to differentiate the Company's products and services from those of its competitors.

Congress and many states are considering new privacy and security requirements that would apply to the Company's business. Compliance with new privacy and 24 Item 1A.

Congress and many states are considering new privacy and security requirements that would apply to the Company's business.

Risk Factors prevent and detect this activity may not be effective in all cases. Despite the Company's published Supplier Code of Conduct, due diligence of the Company's alliance partners, and rigorous contracting procedures (including financial, legal, IT security, and risk reviews), there can be no assurance that controls and procedures that the Company employs will be effective.

Despite the Company's published Supplier Code of Conduct, due diligence of the Company's alliance partners, and rigorous contracting procedures (including financial, legal, IT security, AI and risk reviews), there can be no assurance that controls and procedures that the Company employs will be effective.

As the Company's businesses continue to grow and evolve, the number and complexity of models the Company utilizes expands, increasing the Company's exposure to error in the design, implementation or use of models, including the associated input data and assumptions.

Risk Factors complexity of models the Company utilizes expands, increasing the Company's exposure to error in the design, implementation or use of models, including the associated input data and assumptions.

Past or future misconduct by the Company's employees or employees of third parties (suppliers which are cost-based relationships and alliance partners which are revenue-generating relationships) could result in violations of law by the Company, regulatory sanctions and/or serious reputational or financial harm, and the precautions the Company takes to 23 Item 1A.

These models are utilized under a risk management policy approved by the Company's executive risk management committees, however, the models may not operate properly and rely on assumptions and projections that are inherently uncertain.

Quantitative and Qualitative Disclosures about Market Risk for more information. The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate.

MD&A, and the Currency Risk subsection of Item 7A. Quantitative and Qualitative Disclosures about Market Risk for additional information. The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate.

For regulatory accounting purposes for Aflac Japan, there are certain requirements for realizing impairments that could be triggered by rising interest rates, credit-related losses, or changes in foreign exchange, negatively impacting Aflac Japan's earnings and corresponding dividend and capital deployment.

These higher losses would also negatively affect the Company's solvency ratios in the U.S. and Japan . For regulatory accounting purposes for Aflac Japan, there are certain requirements for realizing impairments that could be triggered by rising interest rates, credit-related losses, or changes in foreign exchange, negatively impacting Aflac Japan's earnings and corresponding dividend and capital deployment. 18 Item 1A.

Because insurance products are intangible, the Company's ability to compete for and maintain policyholders relies to a large extent on consumer trust in the Company's business, including its alliance partners, sales associates and other distribution partners.

The Company has made significant investments in the Aflac brand over a long period of time. Because insurance products are intangible, the Company's ability to compete for and maintain policyholders relies to a large extent on consumer trust in the Company's business, including its alliance partners, sales associates and other distribution partners.

Failure to anticipate market trends and/or to differentiate the Company's products and services can affect the Company's ability to retain or grow profitable lines of business. Further, as employers and brokers are increasingly requesting a full suite of products from one insurance provider, a failure to react and adapt to these demands could result in decreased sales or market share.

Further, as employers and brokers are increasingly requesting a full suite of products from one insurance provider, a failure to react and adapt to these demands could result in decreased sales or market share.

Risk Factors competition from existing or new companies in the U.S. and Japan that have not historically been active in the supplemental health insurance industry, but some of which have greater financial, marketing and management resources than the Company. Further, some of these potential competitors could introduce new means of product development and delivery that disrupt the Company’s business model.

The Company also faces potential competition from existing or new companies in the U.S. and Japan that have not historically been active in the supplemental health insurance industry, but some of which have greater financial, marketing and management resources than the Company.

Item 1A. Risk Factors U.S. dollar-denominated investments are associated with existing U.S. dollar-denominated investments that continue to be hedged, previously hedged investments that continue to be held but are no longer hedged, and investments previously hedged that have since been sold, matured or redeemed and may or may not have not been converted to yen.

Cumulative net cash settlements on derivatives hedging currency exposure of Aflac Japan's U.S. dollar-denominated investments are associated with existing U.S. dollar-denominated investments that continue to be hedged, previously hedged investments that continue to be held but are no longer hedged, and investments previously hedged that have since been sold, matured or redeemed and may or may not have not been converted to yen.

While Japan Post Group resumed proactive sales of cancer insurance policies on April 1, 2021 and the Company anticipates a gradual improvement of cancer insurance sales through the Japan Post Group channel over the intermediate term, the Company can provide no assurance regarding the ultimate timing or extent of any recovery in such sales.

Sales of Aflac Japan cancer products in the Japan Post Group channel experienced a material decline beginning in August 2019. While Japan Post Group resumed proactive sales of cancer insurance policies in April 2021, the Company can provide no assurance regarding the ultimate timing or extent of any recovery in such sales.

Although the Company has a global crisis management framework to minimize the business disruption from a catastrophic event, such framework may not be effective to avoid an adverse impact to the Company from such an event. Climate change may increase the frequency and severity of natural disasters such as hurricanes, tornadoes, floods and forest fires.

If the Company's actual experience is different from its assumptions or estimates, the Company's premiums and reserves may prove inadequate.

If the Company's actual experience is different from its assumptions or estimates, the Company's premiums and reserves may prove inadequate. Reserve assumptions are regularly reviewed by the Company and may be revised if future expectations change.

In addition, such events may lead to periods of voluntary or required premium grace periods, which may lead to volatility in lapse rates and related premiums. Additionally, the Company's business operations may be adversely affected by such catastrophic events to the extent they disrupt the Company's physical infrastructure, human resources or systems that support its businesses and customers.

Additionally, the Company's operations, as well as those of its vendors, service providers and counterparties, may be adversely affected by such catastrophic events to the extent they disrupt the Company's physical infrastructure, human resources or systems that support its businesses and customers.

Conversely, the Company may be exposed to an increase in counterparty credit risk for short periods of time while calling collateral from its counterparties.

Conversely, the Company may be exposed to an increase in counterparty credit risk for short periods of time while calling collateral from its counterparties. See the Critical Accounting Estimates section of Item 7. MD&A, and Notes 1, 3, 4, and 5 of the Notes to the Consolidated Financial Statements for additional information.

The pandemic may cause changes to estimates of future earnings, capital deployment and other guidance the Company has provided to the markets in the "2023 Outlook" section of Item 7, MD&A. Policies issued by Aflac Japan and Aflac U.S. are primarily sold and enrolled in person through face-to-face interaction.

These catastrophic events may cause changes to estimates of future earnings, capital deployment and other guidance the Company has provided to the markets in the 2024 Outlook section of Item 7. MD&A.

The Company estimates an expected lifetime credit loss on investments measured at amortized cost including held-to-maturity fixed maturity securities, loan receivables and loan commitments. For the Company’s available-for-sale fixed maturity securities, the Company evaluates estimated credit losses only when the fair value of the available-for-sale fixed maturity security is below its amortized cost basis.

For collateral dependent financial assets, including loans where foreclosure is probable, expected credit losses are based on the fair value of the underlying collateral. For the Company’s available-for-sale fixed maturity securities, the Company evaluates estimated credit losses only when the fair value of the available-for-sale fixed maturity security is below its amortized cost basis.

The Company has entered into significant reinsurance transactions with large, highly rated counterparties, including affiliates. In addition, Aflac Japan has entered into a reinsurance transaction with Aflac Re Bermuda. (For additional 19 Item 1A.

The Company has entered into significant reinsurance transactions with large, highly rated counterparties, including affiliates. In addition, Aflac Japan has entered into reinsurance transactions with Aflac Re. Aflac Re is a newly formed entity with less capital than external counterparties with which the Company has conducted reinsurance transactions in the past.

Due to the evolving nature of the COVID-19 pandemic, the COVID-19 pandemic and any resulting or coincidental economic effects could continue to impact the Company's business, financial condition, results of operations, capital position, liquidity or prospects in a number of ways.

In addition, such events may lead to periods of voluntary or required premium grace periods, which may lead to volatility in lapse rates and related premiums. Any resulting or coincidental economic effects could impact the Company's business, financial condition, results of operations, capital position, liquidity or prospects in a number of ways.

In addition, the costs to address or remediate system interruptions or security threats and vulnerabilities, whether before or after an incident, could be significant. As a holding company, the Parent Company depends on the ability of its subsidiaries to transfer funds to it to meet its debt service and other obligations and to pay dividends on its common stock.

Risk Factors As a holding company, the Parent Company depends on the ability of its subsidiaries to transfer funds to it to meet its debt service and other obligations and to pay dividends on its common stock. The Parent Company is a holding company and has no direct operations, and its most significant assets are the stock of its subsidiaries.

See Note 3 of the Notes to the Consolidated Financial Statements in this report for more information. 18 Item 1A. Risk Factors The Company cannot provide assurance that these evaluations will be accurate and effective.

See Note 3 of the Notes to the Consolidated Financial Statements for additional information. The Company cannot provide assurance that these evaluations will be accurate and effective. If the Company’s estimates of credit losses are not accurate and actual credit losses are higher than the Company’s estimates, the Company’s net income and capital position will be negatively impacted.

Risk Factors For more information on the effects of the COVID-19 pandemic on markets and investments, see the risk factor entitled, “Difficult conditions in global capital markets and the economy, including those caused by COVID-19, could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business.” Sales of the Company's products and services are dependent on its ability to attract, retain and support a network of qualified sales associates, brokers and employees in the U.S. and sales associates and other distribution partners in Japan.

Risk Factors Operational-Related Risk Factors Sales of the Company's products and services are dependent on its ability to attract, retain and support a network of qualified sales associates, brokers and employees in the U.S. and sales associates and other distribution partners in Japan.

See the "Critical Accounting Estimates" section of Item 7, MD&A, and Notes 1, 3, 4, and 5 of the Notes to the Consolidated Financial Statements for more information. The determination of the amount of expected credit losses recorded on the Company's investments is based on significant valuation judgments and could materially impact its results of operations or financial position.

The determination of the amount of expected credit losses recorded on the Company's investments is based on significant valuation judgments and could materially impact its results of operations or financial position. The Company estimates an expected lifetime credit loss on investments measured at amortized cost including held-to-maturity fixed maturity securities, loan receivables and loan commitments.

As a result, the Company would incur a charge to earnings in the period in which it determines such a shortfall exists, which could have a material adverse effect on the Company's business, results of operations and financial condition. 21 Item 1A.

These experience deviations and assumption updates could have a material adverse effect on the Company's business, results of operations and financial condition. 20 Item 1A.

Further, the Company cannot predict the effects that any legal or regulatory changes made in response to climate change concerns would have on the Company’s business. In addition, while assessment of risks related to climate change are part of the Company's credit review process, climate change-related risks may adversely impact the value of the securities that the Company holds.

While the assessment of risks related to climate change are part of the Company's credit review process, climate change-related risks may adversely impact the value of the securities that the Company holds. Climate change may increase the frequency and severity of natural disasters such as hurricanes, tornadoes, floods and forest fires.

To the extent the Company has concentrated positions, it could have an adverse effect on the Company's results of operations and financial position. See the "Investments" section of Item 7, MD&A, and the "Credit Risk" section of Item 7A, Quantitative and Qualitative Disclosures about Market Risk, for more information.

A tightening of credit spreads could reduce the net investment income available to the Company on new credit investments. Increased market volatility also makes it difficult to value certain of the Company's investment holdings. For additional information, see the Critical Accounting Estimates section of Item 7. MD&A, and the Credit Risk subsection of Item 7A.

Removed

Where valuation and interest rates are based on USD LIBOR, the upcoming cessation of USD LIBOR as an interest rate benchmark may create uncertainty in valuation of USD LIBOR-based loans, derivatives and other financial contracts in the pricing of such assets in markets for their sale and disposition.

Added

Item 1A. Risk Factors The Company is also exposed to the general movement in credit market spreads. A widening of credit spreads could reduce the value of the Company's existing portfolio, create unrealized losses on its investment portfolio, and reduce the Company's adjusted capital position and/or the dividend capacity of the Company's insurance subsidiaries.

Removed

If the Company’s estimates of credit losses are not accurate and actual credit losses are higher than the Company’s estimates, the Company’s net income and capital position will be negatively impacted. These higher losses would also negatively affect the Company's solvency ratios in the U.S. and Japan .

Added

Quantitative and Qualitative Disclosures about Market Risk. The Company is exposed to significant interest rate risk, which may adversely affect its results of operations, financial condition and liquidity. The Company has substantial investment portfolios that support its policy liabilities.

Removed

Risk Factors information on this transaction, see Note 16 of the Notes to the Consolidated Financial Statements.) Aflac Re Bermuda is a newly formed entity with less capital than external counterparties with which the Company has conducted reinsurance transactions in the past.

Added

Interest rate risk is an inherent portfolio, business and capital risk for the Company, and significant changes in interest rates could have a material adverse effect on the Company's consolidated results of operations, financial condition or cash flows through realized losses, impairments, changes in unrealized positions, and liquidity.

Removed

The concentration of the Company's investment portfolios in any particular single-issuer or sector of the economy may have an adverse effect on the Company's financial position or results of operations.

Added

Changes in interest rates could also result in the Company having to recognize gains or losses because the Company disposes of some or all of its investments prior to their maturity.

Removed

Negative events or developments affecting any particular single issuer, industry, group of related industries, asset class or geographic sector may have an adverse impact on a particular holding or set of holdings, which may increase risk of loss from defaults due to non-payment of interest or principal.

Added

The Company's exposure to interest rate risk relates primarily to the ability to invest future cash flows to support the interest rate assumption made at the time of the establishment of the Company's product pricing and reserving.

Removed

Operational-Related Risk Factors Major public health issues, including COVID-19 and any resulting or coincidental economic effects, could have an adverse impact on the Company's financial condition and results of operations and other aspects of its business.

Added

Low levels of interest rates on investments experienced in Japan and the U.S. over the last decade have also reduced the level of investment income earned by the Company.

Removed

Likewise, recruiting of new agents and brokers largely occurs through in-person contact.

Added

While interest rates have increased in the U.S. and other regions, interest rates in Japan remain lower than in the U.S., and the Company's overall level of investment income will continue to be negatively impacted from Japan’s low interest rates and from investments made prior to the start of recent rate increases.

Removed

The ability of individual agents and agencies, strategic alliance partners, brokers and other distribution partners to make sales in Japan and the U.S. and the ability to conduct agent and broker recruiting has been reduced by efforts to mitigate the effects of the pandemic, and by cultural and workplace changes that were caused by or are coincidental with the pandemic and may be long-term in nature, including social distancing techniques and remote working by employees.

Added

While the Company generally seeks to maintain a diversified portfolio of fixed-income investments that reflects the cash flow and duration characteristics of the liabilities it supports, the Company may not be able to fully mitigate the interest rate risk of its assets relative to its liabilities.

Removed

These efforts and changes may hinder sales of the Company’s products in Japan and the U.S. The Company cannot predict with certainty the continuing impact of these events on its distribution channels and financial results, but the impact to date has varied between Aflac Japan and Aflac U.S.

Added

Prolonged periods of low interest rates also heighten the risk associated with future increases in interest rates because an increasing proportion of the Company's investment portfolio include investments that bear lower rates of return than the embedded book yield of the investment portfolio.

Removed

For example, most Aflac U.S. business customers, and most of the independent agents in its agency channel, are small businesses who may lack the financial resources to weather an economic downturn and may be disproportionately negatively impacted by the economic uncertainty surrounding COVID-19. These factors may continue to negatively impact sales beyond 2022.

Added

A sustained decline in interest rates could hinder the Company's ability to earn the returns assumed in the pricing and the reserving for its insurance products at the time of sale and issue and may also influence the Company's ability to develop and price attractive new products and could impact its overall sales levels.

Removed

See the risk factors entitled “Sales of the Company's products and services are dependent on its ability to attract, retain and support a network of qualified sales associates, brokers and employees in the U.S. and sales associates and other distribution partners in Japan” and “Difficult conditions in global capital markets and the economy, including those caused by COVID-19, could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business” for more information.

Added

The Company's first sector products are more interest rate sensitive than third sector products. As discussed in Item 1. Business, beginning in November 2022, Aflac Japan refreshed its first sector savings-type products WAYS and Child Endowment and began to actively promote sales of those products, which had been curtailed since 2013 due to persistent low interest rates in Japan.

Removed

Further, the Company's operations, as well as those of its vendors, service providers and counterparties, may also be adversely affected by the COVID-19 pandemic or the mitigation efforts and cultural and workplace changes outlined above.

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Item 2. Properties

Properties — owned and leased real estate

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The Company leases other administrative office space throughout the U.S., Puerto Rico and the United Kingdom. The Company believes its properties are adequate and suitable for its business as currently conducted and are adequately maintained.

The Company leases other administrative office space throughout the U.S., Puerto Rico, the United Kingdom, and Bermuda. The Company believes its properties are adequate and suitable for its business as currently conducted and are adequately maintained.

Item 2. Properties In the U.S., the Company owns land and buildings that comprise two primary campuses located in Columbus, Georgia. These campuses include buildings that serve as the Company's worldwide headquarters and house administrative support and information technology functions for U.S. operations.

These campuses include buildings that serve as the Company's worldwide headquarters and house administrative support and information technology functions for U.S. operations.

Added

ITEM 2. PROPERTIES In Tokyo, Japan, the Company has two primary campuses. The first campus includes a building, owned by the Company, for the customer call center, the claims department, the information technology departments, and training facility. This campus also includes a leased property, which houses Aflac Japan's policy administration and customer service departments.

Added

The second campus comprises leased office space, which serves as Aflac Japan's headquarters and houses administrative and investment support functions. The Company also leases additional office space in Tokyo, along with regional offices located throughout the country. In the U.S., the Company owns land and buildings that comprise two primary campuses located in Columbus, Georgia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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2023 filing

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Performance Graph The following graph compares the five-year performance of the Company's common stock to the Standard & Poor's 500 Index (S&P 500) and the Standard & Poor's Life and Health Insurance Index (S&P Life and Health).

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Performance Graph The following graph compares the five-year performance of the Company's common stock to the Standard & Poor's 500 (S&P 500) Index and the Standard & Poor's 500 Life and Health Insurance (S&P 500 Life and Health Insurance) Index.

Holders As of February 16, 2023, there were 84,297 holders of record of the Company's common stock. Dividends For a summary of dividends paid to shareholders in 2022 and 2021 and potential restrictions on the Company's ability to pay future dividends, see the Liquidity and Capital Resources section of Item 7. MD&A. 29 Item 5.

Holders As of February 15, 2024, there were 81,925 holders of record of the Company's common stock. Dividends For a summary of dividends paid to shareholders in 2023 and 2022 and potential restrictions on the Company's ability to pay future dividends, see the Liquidity and Capital Resources section of Item 7. MD&A. 29 Item 5.

ITEM 3. LEGAL PROCEEDINGS The Company is a defendant in various lawsuits considered to be in the normal course of business. Members of the Company's senior legal and financial management teams review litigation on a quarterly and annual basis. The final results of any litigation cannot be predicted with certainty.

ITEM 3. LEGAL PROCEEDINGS The Company is a defendant in various lawsuits and receives various regulatory inquiries considered to be in the normal course of business. Members of the Company's senior legal and financial management teams review litigation and regulatory inquiries on a quarterly and annual basis.

The Standard & Poor's Life and Health Insurance Index includes: Aflac Incorporated, Globe Life Inc., Lincoln National Corporation, MetLife Inc., Principal Financial Group Inc. and Prudential Financial Inc.

The S&P 500 Life and Health Insurance Index includes: Aflac Incorporated, Globe Life Inc., MetLife Inc., Principal Financial Group Inc. and Prudential Financial Inc.

Performance Graphic Index December 31, 2017 2018 2019 2020 2021 2022 Aflac Incorporated 100.00 106.21 125.92 108.82 146.43 185.03 S&P 500 100.00 95.62 125.72 148.85 191.58 156.89 S&P Life & Health Insurance 100.00 79.23 97.60 88.35 120.76 133.25 Copyright © 2023 Standard & Poor’s, a division of S&P Global. All rights reserved. 30

Performance Graphic Index December 31, 2018 2019 2020 2021 2022 2023 Aflac Incorporated 100.00 118.56 102.46 137.87 174.21 204.50 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 S&P 500 Life & Health Insurance 100.00 123.18 111.51 152.41 168.18 176.00 Copyright © 2024 Standard & Poor’s, a division of S&P Global. All rights reserved. 30

Added

The final results of any litigation or regulatory inquiries cannot be predicted with certainty.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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GAAP financial measure for adjusted return on equity excluding foreign currency impact is ROE as determined using net earnings and average total shareholders’ equity. • U.S. dollar-denominated investment income excluding foreign currency impact represents amounts excluding foreign currency impact on U.S. dollar-denominated investment income using the average foreign currency exchange rate for the comparable prior year period.

GAAP financial measure for adjusted return on equity excluding foreign currency impact is return on average equity (ROE) as determined using net earnings and average total shareholders’ equity. • U.S. dollar-denominated investment income excluding foreign currency impact represents amounts excluding foreign currency impact on U.S. dollar-denominated investment income using the average foreign currency exchange rate for the comparable prior year period.

Additional performance measures used to evaluate the financial condition and performance of the Company's segments are listed below. • Operating Ratios • New Annualized Premium Sales • New Money Yield • Return on Average Invested Assets • Average Weekly Producer For additional information on the Company’s performance measures included in this MD&A, see the Glossary of Selected Terms found directly following Part IV.

Additional performance measures used to evaluate the financial condition and performance of the Company's segments are listed below. • Operating Ratios • New Annualized Premium Sales • New Money Yield • Return on Average Invested Assets • Average Weekly Producer • Premium Persistency For additional information on the Company’s performance measures included in this MD&A, see the Glossary of Selected Terms found directly following Part IV.

Competitive Markets for a discussion of the competitive environment and the basis on which the Company competes in each of its segments. 2023 OUTLOOK The Company’s strategy to drive long-term shareholder value is to pursue growth through product development and distribution expansion and to achieve efficiencies by modernizing its technology and streamlining its operations.

Competitive Markets for a discussion of the competitive environment and the basis on which the Company competes in each of its segments. 2024 OUTLOOK The Company’s strategy to drive long-term shareholder value is to pursue growth through product development and distribution expansion and to achieve efficiencies by modernizing its technology and streamlining its operations.

The functional currency of the DST for U.S. tax purposes was historically the Japanese yen. In 2022, the Company requested a change in tax accounting method through the Internal Revenue Service's automatic consent procedures to change its functional currency on the DST for U.S. tax purposes to the U.S. dollar.

The functional currency of the DST for U.S. tax purposes was historically the Japanese yen. In 2022, the Company requested a change in tax accounting method through the Internal Revenue Service's automatic consent procedures to change the functional currency of the DST for U.S. tax purposes to the U.S. dollar.

In 2022, the combined effective tax rate differs from the U.S. statutory rate primarily due to the impact of the tax accounting method change discussed below, as well as historic and solar tax credits. In 2021, the combined effective tax rate differs from the U.S. statutory rate primarily due to historic and solar tax credits.

In 2022, the combined effective tax rate differed from the U.S. statutory rate primarily due to the impact of the tax accounting method change discussed below, as well as historic and solar tax credits. In 2021, the combined effective tax rate differed from the U.S. statutory rate primarily due to historic and solar tax credits.

The Company's objectives in 2023 are to maintain strong pre-tax margins with increased sales production through product refreshment in its Aflac Japan segment and to begin realizing benefits from its buy to build initiatives and other platform investments, manage expenses and strengthen the number of career agents for Aflac U.S.

The Company's objectives in 2024 are to maintain strong pretax margins with increased sales production through product refreshment in its Aflac Japan segment and to begin realizing benefits from its buy to build initiatives and other platform investments, manage expenses and strengthen the number of career agents for Aflac U.S.

Reconciling Items Net Investment Gains and Losses Reconciliation of Net Investment (Gains) Losses to Adjusted Net Investment (Gains) Losses (In millions) 2022 2021 Net investment (gains) losses $ (363) $ (468) Items impacting net investment (gains) losses: Amortized hedge costs (112) (76) Amortized hedge income 68 57 Net interest cash flows from derivatives associated with certain investment strategies (90) (30) Interest rate component of the change in fair value of foreign currency swaps on notes payable 50 55 Adjusted net investment (gains) losses $ (447) $ (462) The Company's investment strategy is to invest primarily in fixed maturity securities to provide a reliable stream of investment income, which is one of the drivers of the Company’s profitability.

Reconciliation of Net Investment (Gains) Losses to Adjusted Net Investment (Gains) Losses (In millions) 2023 2022 2021 Net investment (gains) losses $ (590) $ (363) $ (468) Items impacting net investment (gains) losses: Amortized hedge costs (157) (112) (76) Amortized hedge income 121 68 57 Net interest cash flows from derivatives associated with certain investment strategies (328) (90) (30) Interest rate component of the change in fair value of foreign currency swaps on notes payable 41 50 55 Adjusted net investment (gains) losses $ (914) $ (447) $ (462) The Company's investment strategy is to invest primarily in fixed maturity securities to provide a reliable stream of investment income, which is one of the drivers of the Company’s profitability.

Total income taxes were $403 million in 2022 and $997 million in 2021. Japanese income taxes on Aflac Japan's results account for most of the Company's consolidated income tax expense. Aflac Japan holds certain U.S. dollar-denominated assets in a Delaware Statutory Trust (DST). These assets are mostly comprised of various U.S. dollar-denominated commercial mortgage loans.

Total income taxes were $603 million in 2023, $451 million in 2022 and $977 million in 2021. Japanese income taxes on Aflac Japan's results account for most of the Company's consolidated income tax expense. Aflac Japan holds certain U.S. dollar-denominated assets in a Delaware Statutory Trust (DST). These assets are mostly comprised of various U.S. dollar-denominated commercial mortgage loans.

Segment Customer demographics continue to evolve and new opportunities present themselves in different customer segments such as the millennial and multicultural markets. Customer expectations and preferences are changing. Trends indicate existing customers and potential customers seek cost-effective solutions that are easily understood and can be accessed through technology-enabled devices.

Japan’s existing customers and potential customers seek products that are easily understood, cost-effective and can be accessed through technology-enabled devices. Aflac U.S. Segment Customer demographics continue to evolve and new opportunities present themselves in different customer segments such as the millennial and multicultural markets. Customer expectations and preferences are changing.

Further, the Company expects the charges associated with the excise tax to be recognized in equity consistent with other costs related to treasury stock. For additional information, see Note 10 of the Notes to the Consolidated Financial Statements and the Critical Accounting Estimates - Income Taxes section of this MD&A.

Effective January 1, 2023, charges associated with the excise tax are recognized in equity consistent with other costs related to treasury stock. For additional information, see Note 10 of the Notes to the Consolidated Financial Statements and the Critical Accounting Estimates - Income Taxes section of this MD&A.

Shareholders’ equity at December 31, 2022 also included an unrealized foreign currency translation loss of $3.6 billion, compared with an unrealized foreign currency translation loss of $2.0 billion at December 31, 2021. The annualized return on average shareholders’ equity in 2022 was 15.1%.

Shareholders’ equity at December 31, 2023 also included an unrealized foreign currency translation loss of $4.1 billion, compared with an unrealized foreign currency translation loss of $3.6 billion at December 31, 2022. The annualized return on average shareholders’ equity in 2023 was 22.1%.

Management's Discussion and Analysis of Financial Condition and Results of Operations Consistent with U.S. GAAP guidance for segment reporting, pretax adjusted earnings is the Company's U.S. GAAP measure of segment performance. The Company believes that a presentation of this measure is vitally important to an understanding of the underlying profitability drivers and trends of its business.

GAAP guidance for segment reporting, pretax adjusted earnings is the Company's U.S. GAAP measure of segment performance. The Company believes that a presentation of this measure is vitally important to an understanding of the underlying profitability drivers and trends of its business.

Certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements can be found in the “Risk Factors” and “Forward-Looking Statements” sections herein.

The Company’s actual results may differ, possibly materially, from expectations or estimates reflected in such forward-looking statements. Certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements can be found in the Risk Factors and Forward-Looking Information sections herein.

Management's Discussion and Analysis of Financial Condition and Results of Operations located in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 , filed on February 23, 2022, for reference to discussion of the year ended December 31, 2020, the earliest of the three years presented.

Management's Discussion and Analysis of Financial Condition and Results of Operations located in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 , filed on February 24, 2023, for reference to discussions of the year ended December 31, 2021, the earliest of the three years presented, that have not been adjusted for the adoption of LDTI.

(2) The total remaining shares available for purchase at December 31, 2022, consisted of 16,641,823 shares related to a 100,000,000 share repurchase authorization by the board of directors announced in August 2020 and 100,000,000 shares related to a 100,000,000 share repurchase authorization by the board of directors announced in November 2022. ITEM 6. [RESERVED] 31 Item 7.

(2) The total remaining shares available for purchase at December 31, 2023, consisted of shares related to a 100,000,000 share repurchase authorization by the board of directors announced in November 2022. ITEM 6. [RESERVED] 31 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ITEM 7.

The average yen/dollar exchange rate (1) in 2022 was 130.17, or 15.7% weaker than the rate of 109.79 in 2021. Adjusted earnings (2) for the full year of 2022 were $3.4 billion, or $5.33 per diluted share, compared with $4.0 billion, or $5.94 per diluted share, in 2021.

The average yen/dollar exchange rate (1) in 2023 was 140.57, or 7.4% weaker than the rate of 130.17 in 2022. Adjusted earnings (2) for the full year of 2023 were $3.7 billion, or $6.23 per diluted share, compared with $3.6 billion, or $5.67 per diluted share, in 2022.

Net investment gains in 2022 included an increase in credit loss allowances of $36 million; $273 million of net gains from certain derivative and foreign currency gains or losses; $341 million of net losses on equity securities; and $467 million of net gains from sales and redemptions.

Net investment gains in 2023 included an increase in credit loss allowances of $139 million; $441 million of net gains from certain derivative and foreign currency gains or losses; $88 million of net gains on equity securities; and $200 million of net gains from sales and redemptions.

The Company announced a 5.0% increase in the first quarter 2023 dividend compared to the prior quarter, and it intends to maintain strong capital ratios in Aflac Japan and Aflac U.S. in support of its commitment to shareholder dividends while remaining tactical in its deployment of capital in the form of share repurchases and opportunistic investments.

The Company intends to maintain strong capital ratios in Aflac Japan and Aflac U.S. in support of its commitment to shareholder dividends while remaining tactical in its deployment of capital in the form of share repurchases and opportunistic investments.

In addition, the Parent Company, other business units that are not individually reportable, and business activities, including reinsurance retrocession activities, not included in Aflac Japan or Aflac U.S. are included in Corporate and other. See the Item 1. Business section of this Form 10-K for a summary of each segment's products and distribution channels. 39 Item 7.

Aflac Japan is the principal contributor to consolidated earnings. In addition, the Parent Company, other business units that are not individually reportable, and business activities, including reinsurance activities, not included in Aflac Japan or Aflac U.S. are included in Corporate and other. See Item 1. Business for a summary of each segment's products and distribution channels. Consistent with U.S.

Aflac Japan Segment For Aflac Japan, the Company anticipates that the shift in premiums over the last several years from first sector savings products to third sector cancer and medical products and first sector protection products, will continue to result in moderately lower benefit ratios in the Aflac Japan segment.

Aflac Japan Segment For Aflac Japan, the Company anticipates that favorable morbidity experience and the shift in premiums over the last several years from first sector savings products to third sector cancer and medical products and first sector protection products will result in stable benefit ratios in the Aflac Japan segment, while expense reduction efforts are expected to reduce expense ratios.

Shareholders’ equity excluding accumulated other comprehensive income (AOCI) (adjusted book value) (2) was $26.8 billion, or $43.51 per share at December 31, 2022, compared with $25.9 billion, or $39.65 per share, at December 31, 2021. The annualized adjusted return on equity excluding foreign currency impact (2) in 2022 was 13.7%.

Shareholders’ equity excluding accumulated other comprehensive income (AOCI) (2) (adjusted book value) was $27.5 billion, or $47.55 per share at December 31, 2023, compared with $26.6 billion, or $43.18 per share, at December 31, 2022. The annualized adjusted return on equity excluding foreign currency impact (2) in 2023 was 14.2%.

The Company historically recorded a deferred tax liability for foreign currency translation gains on the DST assets, which was released in the third quarter of 2022 as a result of the functional currency change and subsequently adjusted for foreign currency impacts in the fourth quarter of 2022.

As a result, foreign currency translation gains or losses on assets held in the DST are no longer recognized for U.S. tax purposes. The Company historically recorded a deferred tax liability for foreign currency translation gains on the DST assets, which was released in the third quarter of 2022 as a result of the functional currency change.

Reconciliation of Net Earnings to Adjusted Earnings In Millions Per Diluted Share 2022 2021 2022 2021 Net earnings $ 4,201 $ 4,325 $ 6.59 $ 6.39 Items impacting net earnings: Adjusted net investment (gains) losses (1) (447) (462) (.70) (.68) Other and non-recurring (income) loss (1) 73 .00 .11 Income tax (benefit) expense on items excluded from adjusted earnings (2) (357) 83 (.56) .12 Adjusted earnings 3,397 4,019 5.33 5.94 Current period foreign currency impact (3) 215 N/A .34 N/A Adjusted earnings excluding current period foreign currency impact $ 3,613 $ 4,019 $ 5.67 $ 5.94 (1) See reconciliation of net investment (gains) losses to adjusted net investment (gains) losses below.

Reconciliation of Net Earnings to Adjusted Earnings In Millions Per Diluted Share 2023 2022 2021 2023 2022 2021 Net earnings $ 4,659 $ 4,418 $ 4,231 $ 7.78 $ 6.93 $ 6.25 Items impacting net earnings: Adjusted net investment (gains) losses (1) (914) (447) (462) (1.53) (.70) (.68) Other and non-recurring (income) loss (39) (1) 73 (.07) .00 .11 Income tax (benefit) expense on items excluded from adjusted earnings (2) 26 (357) 83 .04 (.56) .12 Adjusted earnings 3,733 3,614 3,925 6.23 5.67 5.80 Current period foreign currency impact (3) 113 N/A N/A .19 N/A N/A Adjusted earnings excluding current period foreign currency impact $ 3,847 $ 3,614 $ 3,925 $ 6.43 $ 5.67 $ 5.80 (1) See reconciliation of net investment (gains) losses to adjusted net investment (gains) losses below.

The Company expects that its adjusted effective tax rate for future periods will be approximately 20%. The effective tax rate continues to be subject to future tax law changes both in the U.S. and in foreign jurisdictions. See the risk factor entitled "Tax rates applicable to the Company may change" in Part I, Item 1A. Risk Factors for more information.

The Company expects that its effective tax rate on adjusted earnings for future periods will be approximately 20%. The effective tax rate continues to be subject to future tax law changes both in the U.S. and in foreign jurisdictions. See the 39 Item 7.

Additionally, income protection and the health needs of retiring baby boomers are continuing to shape the insurance industry. Regulatory Environment See Item 1. Business - Aflac Japan Government Regulation and Aflac U.S. Government Regulation for a discussion of regulatory developments that may impact the Company and the associated risks. Competitive Environment See Item 1.

Government Regulation for a discussion of regulatory developments that may impact the Company and the associated risks. Competitive Environment See Item 1. Business - Aflac Japan Competitive Markets and Aflac U.S.

Management's Discussion and Analysis of Financial Condition and Results of Operations ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements included in this section constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements included in this section constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon the Company.

Furthermore, the Company is required to report a measure of segment profit or loss, certain revenue and expense items, and segment assets. The Company's insurance business consists of two segments: Aflac Japan and Aflac U.S. Aflac Japan is the principal contributor to consolidated earnings.

GAAP financial reporting requires that a company report financial and descriptive information about operating segments in its annual and interim period financial statements. Furthermore, the Company is required to report a measure of segment profit or loss, certain revenue and expense items, and segment assets. The Company's insurance business consists of two segments: Aflac Japan and Aflac U.S.

Management's Discussion and Analysis of Financial Condition and Results of Operations • Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest cash flows from derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses.

GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively. • Adjusted net investment gains and losses are net investment gains and losses adjusted for i) amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity, ii) net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are both reclassified to net investment income, and iii) the impact of interest cash flows from 35 Item 7.

(2) Includes release of $452 in deferred taxes in 2022. (3) Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.

(2) Includes release of $452 in deferred taxes in 2022. (3) Prior period foreign currency impact reflected as “N/A” to isolate change for current period only. Prior-year amounts have been adjusted for the adoption of accounting guidance on January 1, 2023 related to accounting for long-duration insurance contracts.

In 2022, Aflac Incorporated repurchased $2.4 billion, or 39.2 million of its common shares. At December 31, 2022, the Company had 116.6 million remaining shares authorized for repurchase. Shareholders’ equity was $22.4 billion, or $36.35 per share, at December 31, 2022, compared with $33.3 billion, or $50.99 per share, at December 31, 2021.

In 2023, Aflac Incorporated repurchased $2.8 billion, or 38.9 million of its common shares. At December 31, 2023, the Company had 77.7 million remaining shares authorized for repurchase. Shareholders’ equity was $22.0 billion, or $38.00 per share, at December 31, 2023, compared with $20.1 billion, or $32.73 per share, at December 31, 2022.

Shareholders’ equity at December 31, 2022 included a net unrealized loss on investment securities and derivatives of $729 million, compared with a net unrealized gain of $9.6 billion at December 31, 2021.

Shareholders’ equity at December 31, 2023 included a cumulative decrease of $2.6 billion from the effect of changes in discount rate assumptions on insurance contracts, compared with a corresponding cumulative decrease of $2.1 billion at December 31, 2022, and a net unrealized gain on investment securities and derivatives of $1.1 billion, compared with a net unrealized loss of $729 million at December 31, 2022.

Business, the Risk Factors identified in Item 1A. and this Item 7. MD&A. RESULTS OF OPERATIONS The Company earns its revenues principally from insurance premiums and investments. The Company’s operating expenses primarily consist of insurance benefits provided and reserves established for anticipated future insurance benefits, general business expenses, commissions and other costs of selling and servicing its products.

The Company’s operating expenses primarily consist of insurance benefits provided and reserves established for anticipated future insurance benefits, general business expenses, commissions and other costs of selling and servicing its products.

The Company expects that benefit and expense ratios will continue to experience some level of revenue pressure due to the impact of paid up policies and reduced sales compared to years prior to the COVID-19 pandemic.

The Company expects that benefit and expense ratios will continue to experience some level of revenue pressure due to the impact of paid up policies and internal reinsurance transactions. For 2024, the Company expects Aflac Japan to generate a benefit ratio in the range of 66% to 68% and an expense ratio in the range of 19% to 21%.

See Note 2 of the Notes to the Consolidated Financial Statements for the reconciliation of segment results to the Company's consolidated U.S. GAAP results and additional information. AFLAC JAPAN SEGMENT Aflac Japan Pretax Adjusted Earnings Changes in Aflac Japan's pretax adjusted earnings and profit margins are primarily affected by morbidity, mortality, expenses, persistency and investment yields.

See Note 2 of the Notes to the Consolidated Financial Statements for the reconciliation of segment results to the Company's consolidated U.S. GAAP results and additional information. 41

Foreign Currency Translation Aflac Japan’s premiums and a significant portion of its investment income are received in yen, and its claims and most expenses are paid in yen. Aflac Japan purchases yen-denominated assets and U.S. dollar-denominated assets, which may be hedged to yen, to support yen-denominated policy liabilities.

Aflac Japan purchases yen-denominated assets and U.S. dollar-denominated assets, which may be hedged to yen, to support yen-denominated policy liabilities.

Management's Discussion and Analysis of Financial Condition and Results of Operations Other items excluded from adjusted earnings included integration costs related to the Company's acquisition of Zurich North America's U.S. Corporate Life and Pensions business; these costs primarily consist of expenditures for legal, accounting, consulting, integration of systems and processes and other similar services.

Corporate Life and Pensions business; these costs primarily consisted of expenditures for legal, accounting, consulting, integration of systems and processes and other similar services. These integration costs were excluded from adjusted earnings for one year following the acquisition and amounted to $26 million for the year ended December 31, 2021.

Management's Discussion and Analysis of Financial Condition and Results of Operations COVID-19, could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business." Demographics Aflac Japan Segment With Japan’s aging population and the rise in healthcare costs, supplemental health care insurance products remain attractive.

Management's Discussion and Analysis of Financial Condition and Results of Operations Demographics Aflac Japan Segment With Japan’s aging population and the rise in healthcare costs, supplemental health care insurance products remain attractive. However, due to the aging population and decline in birthrate, new opportunities for customer demographics are not as readily available.

Risk Factors for the risk factor entitled, "Difficult conditions in global capital markets and the economy, including those caused by 33 Item 7.

Risk Factors for the risk factor entitled, "Difficult conditions in global capital markets and the economy could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business." 33 Item 7.

For the 2023 through 2024 period, the Company expects Aflac U.S. net earned premium growth of 3% to 5% on a compound annual growth rate basis, with a benefit ratio in the range of 47% to 50% and an expense ratio in the range of 37% to 40%.

For 2024, the Company expects Aflac U.S. to generate a benefit ratio in the range of 45% to 47% and an expense ratio in the range of 38% to 40%. 34 Item 7.

Net earnings were $4.2 billion, or $6.59 per diluted share, for the full year of 2022, compared with $4.3 billion, or $6.39 per diluted share, for the full year of 2021, reflecting an income tax benefit of $452 million from the release of a deferred tax liability.

Net earnings were $4.7 billion, or $7.78 per diluted share, for the full year of 2023, compared with $4.4 billion, or $6.93 per diluted share, for the full year of 2022.

These integration costs are excluded from adjusted earnings for one year following the acquisition and amounted to $26 million for the year ended December 31, 2021. Income Taxes The Company's combined U.S. and Japanese effective income tax rate on pretax earnings was 8.8% in 2022 and 18.7% in 2021.

Income Taxes The Company's combined U.S. and Japanese effective income tax rate on pretax earnings was 11.5% in 2023, 9.3% in 2022 and 18.7% in 2021.

This change in functional currency resulted in the Company recognizing an income tax benefit of $452 million ($0.71 per basic and diluted share, respectively) in 2022. In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into U.S. law.

The release of the deferred tax liability resulted in the Company recognizing an income tax benefit of $174 million in 2023 and $452 million in 2022. In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into U.S. law, which among other things, imposed a 1% excise tax on the Company’s repurchases of its common stock.

This MD&A is divided into the following sections: Page Executive Summary 33 Industry Trends 33 Outlook 34 Results of Operations 35 Investments 49 Hedging Activities 53 Policy Liabilities 56 Benefit Plans 57 Policyholder Protection 57 Liquidity and Capital Resources 57 Critical Accounting Estimates 64 The Company elected to omit discussion on the earliest of the three years covered by the consolidated financial statements presented in Item 8.

This MD&A is divided into the following sections: Page Executive Summary 33 Industry Trends 33 Outlook 34 Results of Operations 35 Investments 54 Hedging Activities 59 Policy Liabilities 62 Benefit Plans 63 Policyholder Protection 63 Liquidity and Capital Resources 63 Critical Accounting Estimates 71 All relevant prior-year amounts have been adjusted for the adoption of Accounting Standards Update (ASU) 2018-12 Financial Services - Insurance: Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI) on January 1, 2023.

Yen-denominated balance sheet accounts are translated to U.S. dollars using the spot Japanese yen/U.S. dollar foreign exchange rate at the end of the reporting period. RESULTS OF OPERATIONS BY SEGMENT U.S. GAAP financial reporting requires that a company report financial and descriptive information about operating segments in its annual and interim period financial statements.

Yen-denominated balance sheet accounts are translated to U.S. dollars using the spot Japanese yen/U.S. dollar foreign exchange rate at the end of the reporting period. Reconciliation of Book Value to Adjusted Book Value The following table is a reconciliation of items impacting adjusted book value and adjusted book value per diluted share to the most directly comparable U.S.

Corporate and other The Company expects Corporate and other results to reflect stable net investment income in 2023 compared to 2022, assuming that U.S. interest rates remain stable. For important disclosures applicable to statements made in this 2023 Outlook, please see the statement on Forward-Looking Information at the beginning of Item 1.

For important disclosures applicable to statements made in this 2024 Outlook, please see the statement on Forward-Looking Information at the beginning of Item 1. Business, the Risk Factors identified in Item 1A. and this Item 7. MD&A. RESULTS OF OPERATIONS The Company earns its revenues principally from insurance premiums and investments.

For additional information see the Result of Operations by Segment section of this MD&A. Performance Highlights For the full year of 2022, total revenues were down 11.8% to $19.5 billion, compared with $22.1 billion for the full year of 2021.

Amounts reported in this MD&A may not foot due to rounding. 32 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations EXECUTIVE SUMMARY Performance Highlights For the full year of 2023, total revenues were down 2.3% to $18.7 billion, compared with $19.1 billion for the full year of 2022.

Segment For Aflac U.S., the Company expects benefit ratios to normalize in 2023 and for expense ratios to decline over the next five years as the Company begins to realize the benefits from investments into U.S. platforms, continues to scale its acquisitions, and focuses on earned premium growth.

Aflac U.S. Segment For Aflac U.S., the Company expects growth in life and disability as well as dental and vision to increase benefit ratios and decrease expense ratios over time.

Removed

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Issuer Purchases of Equity Securities During the year ended December 31, 2022, the Parent Company repurchased shares of its common stock as follows: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs January 1 - January 31 1,933,400 $ 61.87 1,933,400 53,895,617 February 1 - February 28 3,183,212 63.58 2,845,206 51,050,411 March 1 - March 31 3,233,866 61.93 3,228,600 47,821,811 April 1 - April 30 2,592,239 62.98 2,589,500 45,232,311 May 1 - May 31 4,284,400 57.22 4,284,400 40,947,911 June 1 - June 30 4,315,931 56.12 4,310,888 36,637,023 July 1 - July 31 3,670,800 55.40 3,670,800 32,966,223 August 1 - August 31 3,983,200 61.37 3,983,200 28,983,023 September 1 - September 30 3,406,571 59.47 3,403,200 25,579,823 October 1 - October 31 2,817,100 60.01 2,817,100 22,762,723 November 1 - November 30 2,867,949 69.91 2,856,100 119,906,623 December 1 - December 31 3,268,609 70.89 3,264,800 116,641,823 Total 39,557,277 (1) $ 61.29 39,187,194 116,641,823 (2) (1) During the year ended December 31, 2022, 370,083 shares were purchased in connection with income tax withholding obligations related to the vesting of restricted-share-based awards during the period.

Added

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Issuer Purchases of Equity Securities During the year ended December 31, 2023, the Parent Company repurchased shares of its common stock as follows: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs January 1 - January 31 2,440,300 $ 72.15 2,440,300 114,201,523 February 1 - February 28 3,542,907 69.48 3,200,100 111,001,423 March 1 - March 31 4,711,768 64.20 4,707,900 106,293,523 April 1 - April 30 2,608,037 66.00 2,607,869 103,685,654 May 1 - May 31 4,322,919 66.50 4,321,165 99,364,489 June 1 - June 30 3,537,309 68.15 3,531,796 95,832,693 July 1 - July 31 2,478,733 71.10 2,478,733 93,353,960 August 1 - August 31 3,700,973 75.48 3,700,973 89,652,987 September 1 - September 30 3,215,602 76.19 3,209,947 86,443,040 October 1 - October 31 3,275,099 78.29 3,275,099 83,167,941 November 1 - November 30 2,833,510 81.54 2,832,717 80,335,224 December 1 - December 31 2,593,669 82.14 2,589,843 77,745,381 Total 39,260,826 (1) $ 71.99 38,896,442 77,745,381 (2) (1) During the year ended December 31, 2023, 364,384 shares were purchased in connection with income tax withholding obligations related to the vesting of restricted-share-based awards during the period.

Removed

Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon the Company. The Company’s actual results may differ, possibly materially, from expectations or estimates reflected in such forward-looking statements.

Added

See Note 1 of the Notes to the Consolidated Financial Statements for additional information. The Company has elected to omit certain elements of discussion of the year ended December 31, 2021 in this MD&A. Readers should refer to Item 7.

Removed

Financial Statements and Supplementary Data. Readers should refer to Item 7.

Added

Net earnings for 2023 included an after-tax loss of $119 million, or $.20 per diluted share, related to novation of a reinsurance treaty with a third party that had been ceded back to the Company as of year end. Net earnings in 2023 included net investment gains of $590 million, compared with net investment gains of $363 million in 2022.

Removed

Amounts reported in this MD&A may not foot due to rounding. 32 Item 7.

Added

The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.19. Adjusted earnings for 2023 included an after-tax loss of $119 million, or $.20 per diluted share, related to novation of a reinsurance treaty with a third party that had been ceded back to the Company as of year end.

Removed

Management's Discussion and Analysis of Financial Condition and Results of Operations EXECUTIVE SUMMARY Market Conditions The impact of the COVID-19 global pandemic on the Company continues to evolve and the continued path of the global economic recovery remains uncertain given the potential longer-term impacts that have resulted from or are coincidental with the pandemic.

Added

Trends indicate existing customers and potential customers seek cost-effective solutions that are easily understood and can be accessed through technology-enabled devices. Additionally, income protection and the health needs of retiring baby boomers are continuing to shape the insurance industry. Regulatory Environment See Item 1. Business - Aflac Japan Government Regulation and Aflac U.S.

Removed

For example, economic conditions have acted as headwinds to sales and earned premiums in 2022. Further, continued widening of the differential between U.S. and Japan interest rates has contributed to a weakening of the yen, which has the effect of suppressing the Company's current period results in relation to the comparable prior period.

Added

In November 2023, the board of directors announced a 19.0% increase in the quarterly cash dividend, effective with the first quarter of 2024.

Removed

Results for 2022 included pretax net investment gains of $363 million, compared with net investment gains of $468 million in 2021.

Added

Management's Discussion and Analysis of Financial Condition and Results of Operations Corporate and other The Company expects Corporate and other results to reflect stable net investment income in 2024, as compared with 2023, assuming that U.S. interest rates remain stable and excluding the impact of tax credit investments, as tax benefits are recognized in a corresponding lower income tax expense.

Removed

The weaker yen/dollar exchange rate negatively impacted adjusted earnings per diluted share by $.34. Total investments and cash at December 31, 2022 were $117.4 billion, compared with $143.0 billion at December 31, 2021. The decline in the portfolio was principally driven by the weaker yen and higher interest rates.

Added

Management's Discussion and Analysis of Financial Condition and Results of Operations derivatives associated with notes payable, which is reclassified to interest expense as a component of total adjusted expenses.

Removed

However, due to the aging population and decline in birthrate, new opportunities for customer demographics are not as readily available. Japan’s existing customers and potential customers seek products that are easily understood, cost-effective and can be accessed through technology-enabled devices. Aflac U.S.

Added

Reconciling Items Net Investment Gains and Losses The following table is a reconciliation of items impacting adjusted net investment (gains) losses to the most directly comparable U.S. GAAP financial measures of net investment (gains) losses for the years ended December 31.

Removed

Business - Aflac Japan Competitive Markets and Aflac U.S.

Added

Management's Discussion and Analysis of Financial Condition and Results of Operations In June 2023, the Company amended the U.S. defined benefit plan to freeze future benefits under the plan for all participants effective January 1, 2024, which resulted in the Company recognizing a curtailment gain of approximately $49 million in 2023.

Removed

For the 2023 through 2024 period, the Company expects a decline in Aflac Japan net earned premiums in the low single digit range after adjusting for the impact of deferred profit liability reclassification and an expected new internal reinsurance program, with a benefit ratio in the range of 66% to 68% and an expense ratio in the range of 20% to 22%. 34 Item 7.

Added

The curtailment gain is both unusual and non-recurring and is unrelated to other recurring benefit costs associated with the plan; therefore, the Company has excluded the curtailment gain from adjusted earnings.

Removed

Management's Discussion and Analysis of Financial Condition and Results of Operations Aflac U.S.

Added

In 2023, other items excluded from adjusted earnings included an impairment for certain finite-lived intangible assets of approximately $11 million as a result of the Company exiting the third-party administration business acquired in connection with the purchase of Aflac Benefit Solutions, Inc. in 2019.

Removed

GAAP financial measures for adjusted earnings and adjusted earnings per share (basic or diluted) are net earnings and net earnings per share, respectively. 35 Item 7.

Added

The impairment of these intangible assets are not related to the ongoing operations of the business and occur infrequently; therefore, the Company has excluded the impairment from adjusted earnings. In 2021, other items excluded from adjusted earnings included integration costs related to the Company's acquisition of Zurich North America's U.S.

Removed

As a result, foreign currency translation gains or losses on assets held in the DST will no longer be recognized for U.S. tax purposes.

Added

In 2023, the combined effective tax rate differed from the U.S. statutory rate primarily due to historic and solar tax credits and the exclusion of foreign currency translation gains and losses held in the Delaware Statutory Trust.

Removed

Effective January 1, 2023, the law imposes a 15% corporate alternative minimum tax rate and a 1% excise tax on the Company’s repurchases of its common stock. The Company does not anticipate any impacts from the new corporate minimum tax rate since its current tax rate is above the 15% minimum rate.

Added

Management's Discussion and Analysis of Financial Condition and Results of Operations risk factor entitled "Tax rates applicable to the Company may change" in Part I, Item 1A. Risk Factors for additional information. Foreign Currency Translation Aflac Japan’s premiums and a significant portion of its investment income are received in yen, and its claims and most expenses are paid in yen.

Removed

The following table presents a summary of operating results for Aflac Japan for the years ended December 31.

Added

GAAP financial measures of book value and book value per diluted share, respectively, for the years ended December 31. (In millions, except for share and per-share amounts) 2023 2022 U.S. GAAP book value $ 21,985 $ 20,140 Items impacting U.S.

Removed

Aflac Japan Summary of Operating Results (In millions) 2022 2021 Net earned premiums $ 9,548 $ 11,853 Net investment income: (1) Yen-denominated investment income 1,140 1,262 U.S. dollar-denominated investment income 1,641 1,845 Net investment income 2,782 3,107 Amortized hedge costs related to certain foreign currency exposure management strategies 112 76 Adjusted net investment income 2,669 3,031 Other income (loss) 35 41 Total adjusted revenues 12,252 14,925 Benefits and claims, net 6,565 7,963 Adjusted expenses: Amortization of deferred policy acquisition costs 547 653 Insurance commissions 563 706 Insurance and other expenses 1,520 1,849 Total adjusted expenses 2,630 3,208 Total benefits and adjusted expenses 9,195 11,171 Pretax adjusted earnings $ 3,056 $ 3,754 Weighted-average yen/dollar exchange rate 130.17 109.79 In Dollars In Yen Percentage change over previous period: 2022 2021 2022 2021 Net earned premiums (19.4) % (6.4) % (4.2) % (3.9) % Adjusted net investment income (11.9) 14.0 5.5 17.6 Total adjusted revenues (17.9) (2.9) (2.2) (.2) Pretax adjusted earnings (18.6) 15.0 (3.1) 18.5 (1) Net interest cash flows from derivatives associated with certain investment strategies of $(86) and $(33) in 2022 and 2021, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income. 40 Item 7.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 70 Item 8. Financial Statements and Supplementary Data 78 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 176 Item 9A. Controls and Procedures 176

Item 6. [Reserved] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 74 Item 8. Financial Statements and Supplementary Data 81 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 187 Item 9A. Controls and Procedures 187 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

114 edited+167 added−73 removed79 unchanged

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Additionally, as discussed in detail in the Risk Factors section titled “Lack of availability of acceptable yen-denominated investments could adversely affect the Company's results of operations, financial position or liquidity,” there is a risk that losses realized on derivative settlements during periods of weakening yen may not be recouped through realization of the corresponding holding currency gains on the hedged U.S. dollar-denominated investments if these investments are not ultimately sold and converted to yen.

Additionally, as discussed in detail in the Risk Factors section titled “Lack of availability of acceptable yen-denominated investments could adversely affect the Company's results of operations, financial position or liquidity,” there is a risk that losses realized on derivative settlements during periods of yen weakening may not be recouped through realization of the corresponding holding currency gains on the hedged U.S. dollar-denominated investments if these investments are not ultimately sold and converted to yen.

Aflac U.S. A life insurance company’s statutory capital and surplus is determined according to rules prescribed by the NAIC, as modified by the insurance department in the insurance company’s state of domicile. Statutory accounting rules are different from U.S. GAAP and are intended to emphasize policyholder protection and company solvency.

A life insurance company’s statutory capital and surplus is determined according to rules prescribed by the NAIC, as modified by the insurance department in the insurance company’s state of domicile. Statutory accounting rules are different from U.S. GAAP and are intended to emphasize policyholder protection and company solvency.

See Note 4 of the Notes to the Consolidated Financial Statements for: • A description of the Company's derivatives, hedging strategies and underlying risk exposure. • Information about the notional amount and fair market value of the Company's derivatives. • The unrealized and realized gains and losses impact on adjusted earnings of derivatives in cash flow, fair value, net investments in foreign operations, or non-qualifying hedging relationships. 53 Item 7.

From time to time, Aflac Japan also maintains a collar program on a portion of its U.S. Dollar Program to mitigate against more extreme moves in foreign exchange and therefore support SMR. As of December 31, 2022, there were no collars in Aflac Japan, and none of the Company's foreign currency options hedging Aflac Japan's U.S. dollar-denominated assets were in-the-money.

From time to time, Aflac Japan also maintains a collar program on a portion of its U.S. Dollar Program to mitigate against more extreme moves in foreign exchange and therefore support SMR. As of December 31, 2023, there were no collars in Aflac Japan, and none of the Company's foreign currency options hedging Aflac Japan's U.S. dollar-denominated assets were in-the-money.

Aflac Japan recognized an expense of ¥.9 billion and ¥1.8 billion for LIPPC assessments in the years ended December 31, 2022 and 2021, respectively.

Aflac Japan recognized an expense of ¥.9 billion and ¥1.8 billion for LIPPC assessments for the years ended December 31, 2022 and 2021, respectively.

The primary uses of cash by the Parent Company are shareholder dividends, the repurchase of its common stock, interest on its outstanding indebtedness and operating expenses. 57 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table presents the amounts provided to the Parent Company for the years ended December 31.

The primary uses of cash by the Parent Company are shareholder dividends, the repurchase of its common stock, interest on its outstanding indebtedness and operating expenses. 63 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table presents the amounts provided to the Parent Company for the years ended December 31.

The Company may use a portion of the yen dividend and management fee payments to service Aflac Incorporated's yen-denominated notes payable with the remainder converted into U.S. dollars. In addition to yen payments and the reinsurance retrocessions, certain investment activities for Aflac Japan expose the Company to economic currency risk when yen are converted into U.S. dollars.

The Company may use a portion of the yen dividend and management fee payments to service Aflac Incorporated's yen-denominated notes payable with the remainder converted into U.S. dollars. In addition to yen payments and internal reinsurance, certain investment activities for Aflac Japan expose the Company to economic currency risk when yen are converted into U.S. dollars.

The Company's ability to sell either type of security is a function of overall market liquidity which is impacted by, among other things, the amount of outstanding securities of a particular issuer or issuance, trading history of the issue or issuer, overall market conditions, and idiosyncratic events affecting the specific issue or issuer. 52 Item 7.

In years when the yen weakens, translating yen into dollars causes fewer dollars to be reported. When the yen strengthens, translating yen into dollars causes more dollars to be reported. 59 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes consolidated cash flows by activity for the years ended December 31.

In years when the yen weakens, translating yen into dollars causes fewer dollars to be reported. When the yen strengthens, translating yen into dollars causes more dollars to be reported. 65 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes consolidated cash flows by activity for the years ended December 31.

(In millions) 2022 2021 Net cash inflows (outflows) $ (757) $ 66 Enterprise Corporate Hedging Program The Company has designated certain yen-denominated liabilities and foreign currency forwards and options of the Parent Company as accounting hedges of its net investment in Aflac Japan.

(In millions) 2023 2022 2021 Net cash inflows (outflows) $ (598) $ (757) $ 66 Enterprise Corporate Hedging Program The Company has designated certain yen-denominated liabilities and foreign currency forwards and options of the Parent Company as accounting hedges of its net investment in Aflac Japan.

These cash outflows are undiscounted with respect to interest and, as a result, the sum of the cash outflows exceeds the corresponding liability amount. Due to the significance of the assumptions used, actual cash outflow amounts and timing will differ, possibly materially, from these estimates.

Therefore, the sum of the cash outflows exceeds the corresponding liability amount. Due to the significance of the assumptions used, actual cash outflow amounts and timing will differ, possibly materially, from these estimates. (3) These cash outflows are undiscounted with respect to interest and, as a result, the sum of the cash outflows exceeds the corresponding liability amount.

Quantitative and Qualitative Disclosures About Market Risk for more information about market risk and the Company’s use of derivatives. Derivatives are designed to reduce risk on an economic basis while minimizing the impact on financial results. The Company’s derivatives programs vary depending on the type of risk being hedged.

Quantitative and Qualitative Disclosures About Market Risk for additional information about market risk and the Company’s use of derivatives. Derivatives are designed to reduce risk on an economic basis while minimizing the impact on financial results. The Company’s derivatives programs vary depending on the type of risk being hedged.

The estimates that the Company deems to be most critical to an understanding of its results of operations and financial condition are those related to the valuation of investments and derivatives, DAC, liabilities for future policy benefits and unpaid policy claims, and income taxes.

The functional currency of the DST for U.S. tax purposes was historically the Japanese yen. In 2022, the Company requested a change in tax accounting method through the Internal Revenue Service's automatic consent procedures to change the functional currency of the DST for U.S. tax purposes to the U.S. dollar.

The Company's net investment hedge was effective during the years ended December 31, 2022 and 2021, respectively. For additional information on the Company's net investment hedging strategy, see Note 4 of the Notes to the Consolidated Financial Statements.

The Company's net investment hedge was effective during the years ended December 31, 2023 and 2022, respectively. For additional information on the Company's net investment hedging strategy, see Note 4 of the Notes to the Consolidated Financial Statements.

The Company's cash and cash equivalents include unrestricted cash on hand, money market instruments, and other debt instruments with a maturity of 90 days or less when purchased, all of which has minimal market, settlement or other risk exposure.

The Company's cash and cash equivalents include unrestricted cash on hand, money market instruments, and other debt instruments with a maturity of 90 days or less when purchased, all of which have minimal market, settlement or other risk exposure.

The Company calculates its combined RBC ratio to include all U.S. regulated life insurance entities as if a single combined U.S. RBC entity net of intercompany items related to capital resources and risk. The Company intends to maintain a target combined RBC over time of approximately 400% for Aflac U.S., consistent with the Company's risk management practices.

Aflac Japan Remittances (In millions of dollars and billions of yen) 2022 2021 Aflac Japan management fees paid to Parent Company $ 61 $ 59 Aflac Japan dividends declared or paid to Parent Company (in dollars) 2,412 2,138 Aflac Japan dividends declared or paid to Parent Company (in yen) ¥ 324.2 ¥ 236.7 The Company intends to maintain higher than historical levels of liquidity and capital at the Parent Company for stress conditions and with the goals of addressing the Company’s hedge costs and related potential need for collateral and mitigating against long-term weakening of the Japanese yen.

Aflac Japan Remittances (In millions of dollars and billions of yen) 2023 2022 2021 Aflac Japan management fees paid to Parent Company $ 67 $ 61 $ 59 Aflac Japan dividends declared or paid to Parent Company (in dollars) 2,623 2,412 2,138 Aflac Japan dividends declared or paid to Parent Company (in yen) ¥ 374.7 ¥ 324.2 ¥ 236.7 The Company intends to maintain higher than historical levels of liquidity and capital at the Parent Company for stress conditions and with the goals of addressing the Company’s hedge costs and related potential need for collateral and mitigating against long-term weakening of the Japanese yen.

Liquidity Provided by Subsidiaries to Parent Company (In millions) 2022 2021 Management fees paid by subsidiaries $ 136 $ 130 Dividends declared or paid by subsidiaries 3,006 2,791 The following table details Aflac Japan remittances, which are included in the totals above, for the years ended December 31.

Liquidity Provided by Subsidiaries to Parent Company (In millions) 2023 2022 2021 Management fees paid by subsidiaries $ 151 $ 136 $ 130 Dividends declared or paid by subsidiaries 3,516 3,006 2,791 The following table details Aflac Japan remittances, which are included in the totals above, for the years ended December 31.

This occurs when yen-denominated funds are paid as dividends and management fees from Aflac Japan to the Parent Company and with quarterly settlements of its reinsurance retrocession transactions. The exchange rates prevailing at the time of yen payments will differ from the exchange rates prevailing at the time the yen profits were earned.

This occurs when yen-denominated funds are paid as dividends and management fees from Aflac Japan to the Parent Company and with quarterly settlements of internal reinsurance transactions. The exchange rates prevailing at the time of yen payments will differ from the exchange rates prevailing at the time the yen profits were earned.

In September 2022, the Parent Company issued four series of senior notes totaling ¥73.0 billion through a public debt offering under its U.S. shelf registration statement. The first series, which totaled ¥33.4 billion, bears interest at a fixed rate of 1.075% per annum, payable semi-annually, and will mature in September 2029. The second series, which totaled 60 Item 7.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed primarily to the following types of market risks: currency risk, interest rate risk, credit risk and equity risk. Fluctuations in these factors could impact the Company’s consolidated results of operations or financial 70 Item 7A. Quantitative and Qualitative Disclosures About Market Risk condition.

Investments are included in equity securities or the other investments line in the consolidated balance sheets. As part of an arrangement with Federal Home Loan Bank of Atlanta (FHLB), Aflac U.S. obtains low-cost funding from FHLB supported by acceptable forms of collateral pledged by Aflac U.S. In 2022, Aflac U.S. borrowed and repaid $599 million under this program.

Investments are included in equity securities or the other investments line in the consolidated balance sheets. As part of an arrangement with Federal Home Loan Bank of Atlanta (FHLB), Aflac U.S. obtains low-cost funding from FHLB supported by acceptable forms of collateral pledged by Aflac U.S. In 2023, Aflac U.S. borrowed and repaid $223 million under this program.

Below-Investment-Grade Securities The Company's portfolio of below-investment-grade securities includes debt securities purchased while the issuer was rated investment grade plus other loans and bonds purchased as part of an allocation to that segment of the market. The following is the Company's below-investment-grade exposure at December 31.

See Notes 1, 3, and 4 of the Notes to the Consolidated Financial Statements for more information on the Company's securities lending and derivative activities.

See Notes 1, 3, and 4 of the Notes to the Consolidated Financial Statements for additional information on the Company's securities lending and derivative activities.

See Notes 3, 4 and 8 of the Notes to the Consolidated Financial Statements for additional information on the Company's investment strategies, hedging activities, and reinsurance, respectively. Aflac Japan's SMR ratio remains high and reflects a strong capital and surplus position. As of December 31, 2022, Aflac Japan's SMR was 878%, compared with 1,012% at December 31, 2021.

See Notes 3, 4 and 8 of the Notes to the Consolidated Financial Statements for additional information on the Company's investment strategies, hedging activities, and reinsurance, respectively. Aflac Japan's SMR remains high and reflects a strong capital and surplus position. As of December 31, 2023, Aflac Japan's SMR was 1,219%, compared with 878% at December 31, 2022.

The RBC formula quantifies insurance risk, business risk, asset risk and interest rate risk by weighing the types and mixtures of risks inherent in the insurer’s operations. The combined RBC ratio for Aflac U.S. as of December 31, 2022 was 732%, compared with 659% as of December 31, 2021.

The RBC formula quantifies insurance risk, business risk, asset risk and interest rate risk by weighing the types and mixtures of risks inherent in the insurer’s operations. The combined RBC ratio for Aflac U.S. as of December 31, 2023 was 710%, compared with 732% as of December 31, 2022.

Dividends Paid to Shareholders (In millions) 2022 2021 Dividends paid in cash $ 979 $ 855 Dividends through issuance of treasury shares 37 32 Total dividends to shareholders $ 1,016 $ 887 In November 2022, the board of directors announced a 5.0% increase in the quarterly cash dividend, effective with the first quarter of 2023.

Dividends Paid to Shareholders (In millions) 2023 2022 2021 Dividends paid in cash $ 966 $ 979 $ 855 Dividends through issuance of treasury shares 37 37 32 Total dividends to shareholders $ 1,003 $ 1,016 $ 887 In November 2023, the board of directors announced a 19.0% increase in the quarterly cash dividend, effective with the first quarter of 2024.

(In millions) 2022 2021 Operating activities $ 3,879 $ 5,051 Investing activities (1,540) (2,378) Financing activities (3,551) (2,739) Exchange effect on cash and cash equivalents 104 (24) Net change in cash and cash equivalents $ (1,108) $ (90) Operating Activities The principal cash inflows for the Company's insurance activities come from insurance premiums and investment income.

(In millions) 2023 2022 2021 Operating activities $ 3,190 $ 3,879 $ 5,051 Investing activities 817 (1,540) (2,378) Financing activities (3,723) (3,551) (2,739) Exchange effect on cash and cash equivalents 79 104 (24) Net change in cash and cash equivalents $ 363 $ (1,108) $ (90) Operating Activities The principal cash inflows for the Company's insurance activities come from insurance premiums and investment income.

For additional discussion of the risks associated with the foreign currency exposure refer to the Currency Risk section in Item 7A., Quantitative and Qualitative Disclosures about Market Risk, and Item 1A, specifically to the Risk Factors titled “The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate“ and “Lack of availability of acceptable yen-denominated investments could adversely affect the Company's results of operations, financial position or liquidity." See Note 4 of the Notes to the Consolidated Financial Statements for additional information on the Company's hedging activities.

Quantitative and Qualitative Disclosures about Market Risk, and Item 1A. specifically to the Risk Factors titled “The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate“ and “Lack of availability of acceptable yen-denominated investments could adversely affect the Company's results of operations, financial position or liquidity." See Note 4 of the Notes to the Consolidated Financial Statements for additional information on the Company's hedging activities.

Treasury Stock Purchased (In millions of dollars and thousands of shares) 2022 2021 Treasury stock purchases $ 2,401 $ 2,301 Number of shares purchased: Share repurchase program 39,187 43,327 Other 370 437 Total shares purchased 39,557 43,764 Treasury Stock Issued (In millions of dollars and thousands of shares) 2022 2021 Stock issued from treasury: Cash financing $ 17 $ 26 Noncash financing 57 55 Total stock issued from treasury $ 74 $ 81 Number of shares issued 1,341 1,721 In November 2022, the Company's board of directors authorized the purchase of an additional 100 million shares of its common stock.

Treasury Stock Purchased (In millions of dollars and thousands of shares) 2023 2022 2021 Treasury stock purchases $ 2,801 $ 2,401 $ 2,301 Number of shares purchased: Share repurchase program 38,896 39,187 43,327 Other 364 370 437 Total shares purchased 39,260 39,557 43,764 Treasury Stock Issued (In millions of dollars and thousands of shares) 2023 2022 2021 Stock issued from treasury: Cash financing $ 17 $ 17 $ 26 Noncash financing 59 57 55 Total stock issued from treasury $ 76 $ 74 $ 81 Number of shares issued 1,164 1,341 1,721 In November 2022, the Company's board of directors authorized the purchase of an additional 100 million shares of its common stock.

The target minimum amount for the Parent Company’s cash and cash equivalents is approximately $1.8 billion to provide a capital buffer and liquidity support at the holding company.

The target minimum amount for the Parent Company’s cash and cash equivalents is approximately $1.8 billion to provide a capital buffer and liquidity support at the holding company. The Company remains committed to prudent liquidity and capital management.

At December 31, 2022, the Company held $3.9 billion in cash and cash equivalents for stress conditions, which includes the Parent Company's target minimum amount of $1.8 billion.

At December 31, 2023, the Company held $4.3 billion in cash and cash equivalents for stress conditions, which includes the Parent Company's target minimum amount of $1.8 billion.

Deferred Policy Acquisition Costs and Policy Liabilities Insurance premiums for most of the Company's health and life policies, including cancer, accident, hospital, critical illness, dental, vision, term life, whole life, long-term care and disability, are recognized as earned premiums over the premium-paying periods of the contracts when due from policyholders.

Insurance premiums for most of the Company's health and life policies, including cancer, accident, hospital, critical illness, supplemental dental and vision, term life, whole life, long-term care and disability, are recognized as earned premiums over the premium-paying periods of the contracts when due from policyholders.

See the Results of Operations section of this MD&A for the Company's definition of amortized hedge costs/income. 2022 2021 Aflac Japan: FX Forwards FX forward (sell USD, buy yen) notional at end of period (in billions) (1) $4.1 $6.4 Weighted average remaining tenor (in months) (2) .7 2.6 Amortized hedge income (cost) for period (in millions) $(44) $(55) FX Options FX option notional at the end of period (in billions) (1) $13.5 $11.6 Weighted average remaining tenor (in months) (2) 6.4 6.0 Amortized hedge income (cost) for period (in millions) $(68) $(22) Corporate and other (Parent Company): FX Forwards FX forward (buy USD, sell yen) notional at end of period (in billions) (1) $5.0 $5.0 Weighted average remaining tenor (in months) (2) 10.8 11.5 Amortized hedge income (cost) for period (in millions) $71 $62 FX Options FX option notional at the end of period (in billions) (1) $2.6 $1.9 Weighted average remaining tenor (in months) (2) 9.0 7.3 Amortized hedge income (cost) for period (in millions) $(3) $(5) (1) Notional is reported net of any offsetting positions within Aflac Japan or the Parent Company, respectively.

See the Results of Operations section of this MD&A for the Company's definition of amortized hedge costs/income. 2023 2022 2021 Aflac Japan: FX Forwards FX forward (sell USD, buy yen) notional at end of period (in billions) (1) $0.0 $4.1 $6.4 Amortized hedge income (cost) for period (in millions) $(88) $(44) $(55) FX Options FX option notional at the end of period (in billions) (1) $24.7 $13.5 $11.6 Amortized hedge income (cost) for period (in millions) $(69) $(68) $(22) Corporate and other (Parent Company): FX Forwards FX forward (buy USD, sell yen) notional at end of period (in billions) (1) $2.6 $5.0 $5.0 Amortized hedge income (cost) for period (in millions) $126 $71 $62 FX Options FX option notional at the end of period (in billions) (1) $0.5 $2.6 $1.9 Amortized hedge income (cost) for period (in millions) $(5) $(3) $(5) (1) Notional is reported net of any offsetting positions within Aflac Japan or the Parent Company, respectively.

Reverse-Dual Currency Securities (1) (Amortized cost, in millions) 2022 2021 Privately issued reverse-dual currency securities $ 4,049 $ 4,784 Publicly issued collateral structured as reverse-dual currency securities 1,383 1,596 Total reverse-dual currency securities $ 5,432 $ 6,380 Reverse-dual currency securities as a percentage of total investment securities 5.7 % 5.9 % (1) Principal payments in yen and interest payments in dollars Aflac Japan has a portfolio of privately issued securities to better match liability characteristics and secure higher yields than those available on Japanese government or other public corporate bonds.

Reverse-Dual Currency Securities (1) (Amortized cost, in millions) 2023 2022 Privately issued reverse-dual currency securities $ 3,740 $ 4,049 Publicly issued collateral structured as reverse-dual currency securities 1,232 1,383 Total reverse-dual currency securities $ 4,972 $ 5,432 Reverse-dual currency securities as a percentage of total investment securities 5.5 % 5.7 % (1) Principal payments in yen and interest payments in dollars Aflac Japan has a portfolio of privately issued securities to better match liability characteristics and secure higher yields than those available on Japanese government or other public corporate bonds.

As of December 31, 2022, the fair value of Aflac Japan's unhedged U.S. dollar-denominated portfolio was $10.3 billion (excluding certain U.S. dollar-denominated assets shown in the table above as a result of consolidation that have been economically converted to yen using derivatives).

As of December 31, 2023, the fair value of Aflac Japan's unhedged U.S. dollar-denominated portfolio was $484 million (excluding certain U.S. dollar-denominated assets shown in the table above as a result of consolidation that have been economically converted to yen using derivatives).

In the event of a rapid change in market risk conditions causing SMR to decline, the Company has one senior unsecured revolving credit facility in the amount of ¥100 billion and a committed reinsurance facility in the amount of approximately ¥120 billion as a capital contingency plan.

In the event of a rapid change in market risk conditions causing SMR to decline, the Company has a senior unsecured revolving credit facility in the amount of ¥100 billion as a capital contingency plan.

See Note 7 of the Notes to the Consolidated Financial Statements for additional information on the Company's policy liabilities. 56 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations BENEFIT PLANS Aflac Japan and Aflac U.S. have various benefit plans.

Management's Discussion and Analysis of Financial Condition and Results of Operations BENEFIT PLANS Aflac Japan and Aflac U.S. have various benefit plans. For additional information on the Company's Japanese and U.S. plans, see Note 14 of the Notes to the Consolidated Financial Statements.

As part of its overall corporate strategy, the Company has committed $400 million to Aflac Ventures, LLC (Aflac Ventures), as opportunities emerge. Aflac Ventures is a subsidiary of Aflac Global Ventures, LLC (Aflac Global Ventures) which is reported in Corporate and other.

As part of its overall corporate strategy, the Company has committed $400 million to Aflac Ventures, LLC (Aflac Ventures), as opportunities emerge. As of December 31, 2023, of the $400 million committed, approximately $281 million has been deployed. Aflac Ventures is a subsidiary of Aflac Global Ventures, LLC (Aflac Global Ventures) which is reported in Corporate and other.

Management's Discussion and Analysis of Financial Condition and Results of Operations ¥21.1 billion, bears interest at a fixed rate of 1.320% per annum, payable semi-annually, and will mature in December 2032. The third series, which totaled ¥6.5 billion, bears interest at a fixed rate of 1.594% per annum, payable semi-annually, and will mature in September 2037.

The second series, which totaled ¥21.1 billion, bears interest at a fixed rate of 1.320% per annum, payable semi-annually, and will mature in December 2032. The third series, which totaled ¥6.5 billion, bears interest at a fixed rate of 1.594% per annum, payable semi-annually, and will mature in September 2037.

The Company's consolidated yen-denominated net asset position was partially hedged at $11.6 billion as of December 31, 2022, with hedging instruments comprised of $4.0 billion of yen-denominated debt and $7.6 billion of foreign currency forwards and options, compared with $10.2 billion as of December 31, 2021, with hedging instruments comprised of $3.3 billion of yen-denominated debt and $6.9 billion of foreign currency forwards and options. 55 Item 7.

The Company's consolidated yen-denominated net asset position was partially hedged at $6.8 billion as of December 31, 2023, with hedging instruments comprised of $3.7 billion of yen-denominated debt and $3.1 billion of foreign currency forwards and options, compared with $11.6 billion as of December 31, 2022, with hedging instruments comprised of $4.0 billion of yen-denominated debt and $7.6 billion of foreign currency forwards and options.

For additional information on income tax, see Note 10 of the Notes to the Consolidated Financial Statements presented in this report. 68 Item 7.

For additional information on income taxes, see Note 10 of the Notes to the Consolidated Financial Statements presented in this report.

Therefore, future policy benefit reserves are accumulated in the early years of a policy and are designed to help fund future claims payments. The Company expects its future cash flows from premiums and investment portfolios to be sufficient to meet its cash needs for benefits and expenses. Consolidated cash flow from operations decreased 23.2% in 2022, compared with 2021.

See additional discussion in the Risk Factors section titled "The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate." The Parent Company The Company is exposed to currency risk as an economic event when yen funds are actually converted into U.S. dollars.

See Part I, Item 1A. Risk Factors for the risk factor titled "The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate" for additional information. The Parent Company The Company is exposed to currency risk as an economic event when yen funds are actually converted into U.S. dollars.

The primary criterion relates to maintaining the duration of designated assets and liabilities within a specified tolerance range. If the duration difference is not maintained within the specified range without rebalancing, then a certain portion of the assets must be re-classified as available for sale and held at fair value with any associated unrealized gain or loss recorded in surplus.

If the duration difference is not maintained within the specified range without rebalancing, then a certain portion of the assets must be reclassified as available-for-sale and held at fair value with any associated unrealized gain or loss recorded in surplus.

See Note 9 of the Notes to the Consolidated Financial Statements for further information on the debt issuances discussed above. 61 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Cash returned to shareholders through treasury stock purchases and dividends was $3.4 billion in 2022, compared with $3.2 billion in 2021.

See Note 9 of the Notes to the Consolidated Financial Statements for further information on the debt issuances discussed above. Cash returned to shareholders through treasury stock purchases and dividends was $3.8 billion in 2023, compared with $3.4 billion in 2022 and $3.2 billion in 2021.

By buying U.S. dollars and selling yen, the Parent Company is effectively lowering its overall economic exposure to the yen, while Aflac Japan's U.S. dollar exposure remains reduced as a result of Aflac Japan's U.S. Dollar Program that economically creates yen assets.

Management's Discussion and Analysis of Financial Condition and Results of Operations selling yen, the Parent Company is effectively lowering its overall economic exposure to the yen, while Aflac Japan's U.S. dollar exposure remains reduced as a result of Aflac Japan's U.S. Dollar Program that economically creates yen assets.

The amount of the guaranty fund assessment that an insurer is assessed is based on its proportionate share of premiums in that state. See Note 15 of the Notes to the Consolidated Financial Statements for further information on guaranty fund assessments.

Under these criteria, dividend capacity at the Japan subsidiary is basically defined as total equity excluding common stock, accumulated other comprehensive income amounts, capital reserves (representing statutorily required amounts in Japan) but reduced for net after-tax unrealized losses on available-for-sale securities. These dividend capacity requirements are generally aligned with the SMR.

Under these criteria, dividend capacity at the Japan subsidiary is basically defined as total equity excluding common stock and capital reserves (representing statutorily required amounts in Japan) but reduced for net after-tax unrealized losses on available-for-sale securities. These dividend capacity requirements are generally aligned with the SMR. Japan's FSA maintains its own solvency standard which is quantified through the SMR.

In order to economically mitigate risks associated with the enterprise-wide exposure to the yen and the level and volatility of hedge costs, the Parent Company enters into foreign exchange forward and option contracts.

As of December 31, 2022, the Company had no material letters of credit, standby letters of credit, guarantees or standby repurchase obligations. The Company has not entered into transactions involving the transfer of financial assets with an obligation to repurchase financial assets that have been accounted for as a sale under applicable accounting standards, including securities lending transactions.

The Company has not entered into transactions involving the transfer of financial assets with an obligation to repurchase financial assets that have been accounted for as a sale under applicable accounting standards, including securities lending transactions.

In addition to a security, or an asset class, or an issuer-specific credit fundamentals, it considers past events, current economic conditions and forecasts of future economic conditions. The Company's estimates are revised as conditions change and new information becomes available. See the tabular disclosure entitled "Sensitivity of Fair Values of Financial Instruments to Interest Rate Change" in Item 7A.

See the Hedging Activity subsection of this MD&A for more information.

See the Hedging Activities subsection of this MD&A for additional information.

Additionally, to manage interest rate risk associated with its U.S. dollar-denominated investments held by Aflac Japan, from time to time the Company utilizes interest rate swaptions.

In 2022, the Company expanded the use of interest rate swaps for this hedging strategy. Additionally, to manage interest rate risk associated with its U.S. dollar-denominated investments held by Aflac Japan, from time to time the Company utilizes interest rate swaptions.

It is possible that the financial and other information the Company posts there could be deemed to be material information. The information on the Company's website is not part of this document. Further, the Company's references to website URLs are intended to be inactive textual references only. CRITICAL ACCOUNTING ESTIMATES The Company prepares its financial statements in accordance with U.S.

The FSA is currently conducting field testing with insurance companies in Japan for the purpose of investigating the impact of the introduction of regulations. The FSA published provisional specifications in June 2022. Final specifications are expected to be decided in 2024, and a new capital regime to replace the current solvency regime is expected to be introduced in 2025.

The FSA continues to conduct field testing with insurance companies in Japan for the purpose of investigating the impact of the introduction of such regulations. Final specifications are expected to be decided in 2024, and a new capital regime to replace the current solvency regime is expected to be introduced in Aflac Japan's 2025 fiscal year. Aflac U.S.

Dollar Program 27,212 27,885 28,913 31,946 Available-for-sale securities: Fixed maturity securities - economically converted to yen 2,209 2,795 2,236 3,328 Total U.S. dollar-denominated investments in Aflac Japan $ 29,421 $ 30,680 $ 31,149 $ 35,274 (1) Net of allowance for credit losses The U.S.

Dollar Program 23,384 25,254 27,212 27,885 Available-for-sale securities: Fixed maturity securities - economically converted to yen 2,081 2,902 2,209 2,795 Total U.S. dollar-denominated investments in Aflac Japan $ 25,465 $ 28,156 $ 29,421 $ 30,680 (1) Net of allowance for credit losses The U.S.

The Company believes these issuers have the ability to continue making timely payments of principal and interest. See the Unrealized Investment Gains and Losses section in Note 3 of the Notes to the Consolidated Financial Statements for further discussions of unrealized losses related to financial institutions and other corporate investments.

See the Unrealized Investment Gains and Losses section in Note 3 of the Notes to the Consolidated Financial Statements for further discussions of unrealized losses related to financial institutions and other corporate investments.

Investing Activities The Company's investment objectives provide for liquidity primarily through the purchase of publicly traded investment-grade debt securities. Prudent portfolio management dictates that the Company attempts to match the duration of its assets with the duration of its liabilities.

Consolidated cash flow from operations decreased 17.8% in 2023, compared with 2022, and decreased 23.2% in 2022, compared with 2021. Investing Activities The Company's investment objectives provide for liquidity primarily through the purchase of publicly traded investment-grade debt securities. Prudent portfolio management dictates that the Company attempts to match the duration of its assets with the duration of its liabilities.

For publicly issued securities, the Company determines the fair values from quoted market prices readily available from public exchange markets and price quotes and valuations from third party pricing vendors.

Valuation of Investments, Including Derivatives The Company's investments, primarily consisting of debt and equity securities, include both publicly issued and privately issued securities. For publicly issued securities, the Company determines the fair values from quoted market prices readily available from public exchange markets and price quotes and valuations from third-party pricing vendors.

For the majority of privately issued securities and derivatives associated with VIEs within the Company's investment portfolio, a third party pricing vendor has developed valuation models that the Company utilizes to determine fair values. Starting in June 2021 and July 2022, respectively, these models and associated processes and controls were transitioned to and executed by Company personnel.

For the majority of privately issued securities and derivatives associated with VIEs within the Company's investment portfolio, a third-party pricing vendor has developed valuation models that the Company utilizes to determine fair values. These models and associated processes and controls are executed by Company personnel. For the remaining privately issued securities, the Company uses non-binding price quotes from outside brokers.

Income Taxes Income tax provisions are generally based on pretax earnings reported for financial statement purposes, which differ from those amounts used in preparing the Company's income tax returns.

For additional information on future policy benefits, see Note 7 of the Notes to the Consolidated Financial Statements. Income Taxes Income tax provisions are generally based on pretax earnings reported for financial statement purposes, which differ from those amounts used in preparing the Company's income tax returns.

For example, the Company employs policy reserve matching (PRM) investment strategies, which is a Japan-specific accounting treatment that reduces SMR interest rate sensitivity since PRM-designated investments are carried at amortized cost consistent with corresponding liabilities. In order for a PRM-designated asset to be held at amortized cost, there are certain criteria that must be maintained.

The Company has already undertaken various measures to mitigate the sensitivity of Aflac Japan's SMR. For example, the Company employs policy reserve matching (PRM) investment strategies, which is a Japan-specific accounting treatment that reduces SMR interest rate sensitivity since PRM-designated investments are carried at amortized cost consistent with corresponding liabilities.

For the remaining privately issued securities, the Company uses non-binding price quotes from outside brokers. The Company has refined its valuation model for private placements to explicitly incorporate currency basis swap adjustments (market observable data) to assumed interest rate curves where appropriate. The Company estimates the fair values of its securities on a monthly basis.

The Company's valuation model for private placements explicitly incorporates currency basis swap adjustments (market observable data) to assumed interest rate curves where appropriate. The Company estimates the fair values of its securities on a monthly basis.

(2) Tenor based on period reporting date to settlement date Amortized hedge costs/income can fluctuate based upon many factors, including the derivative notional amount, the length of time of the derivative contract, changes in both U.S. and Japan interest rates, and supply and demand for dollar funding.

Amortized hedge costs/income can fluctuate based upon many factors, including the derivative notional amount, the length of time of the derivative contract, changes in both U.S. and Japan interest rates, and supply and demand for dollar funding. Amortized hedge costs/income have fluctuated in recent periods due to changes in the previously mentioned factors. Aflac Japan’s U.S. Dollar-Denominated Hedge Program (U.S.

Management's Discussion and Analysis of Financial Condition and Results of Operations application of these critical accounting estimates determines the values at which 93% of the Company's assets and 80% of its liabilities are reported as of December 31, 2022, and thus has a direct effect on net earnings and shareholders' equity.

The application of these critical accounting estimates determines the values at which 93% of the Company's assets and 80% of its liabilities are reported as of December 31, 2023, and thus has a direct effect on net earnings and shareholders' equity. Subsequent experience or use of other assumptions could produce significantly different results.

Additionally, the Company could take action to enter into derivatives on unhedged U.S. dollar-denominated investments with foreign currency options or forwards. See Notes 8 and 9 of the Notes to the Consolidated Financial Statements for additional information. The Company has already undertaken various measures to mitigate the sensitivity of Aflac Japan's SMR.

Additionally, subject to market conditions, the Company expects that it could take action to enter into derivatives on unhedged U.S. dollar-denominated investments with foreign currency options or forwards or execute additional internal reinsurance transactions with Aflac Re. See Notes 8 and 9 of the Notes to the Consolidated Financial Statements for additional information.

The Company translated its yen-denominated obligations using the December 31, 2022, exchange rate. Actual future payments as reported in dollars will fluctuate with changes in the yen/dollar exchange rate.

Actual future payments as reported in dollars will fluctuate with changes in the yen/dollar exchange rate.

Premiums for these products are recognized as earned premiums over the premium-paying periods of the contracts when due from policyholders. Any gross premium in excess of the net premium is deferred and recorded in earnings, such that profits are recognized in a constant relationship with insurance in force. Benefits are recorded as an expense when they are incurred.

Any gross premium in excess of the net premium is deferred and recorded as a deferred profit liability, a component of the LFPB, which is subsequently amortized in net earned premiums such that profits are recognized in a constant relationship with insurance in force. Benefits are recorded as an expense when they are incurred.

Investment Securities by Type of Issuance 2022 2021 (In millions) Amortized Cost (1) Fair Value Amortized Cost (1) Fair Value Publicly issued securities: Fixed maturity securities $ 77,176 $ 79,090 $ 88,552 $ 103,034 Equity securities 882 882 950 950 Total publicly issued 78,058 79,972 89,502 103,984 Privately issued securities: (2) Fixed maturity securities (3) 17,349 17,861 18,817 22,531 Equity securities 209 209 653 653 Total privately issued 17,558 18,070 19,470 23,184 Total investment securities $ 95,616 $ 98,042 $ 108,972 $ 127,168 (1) Net of allowance for credit losses (2) Primarily consists of securities owned by Aflac Japan (3) Excludes Rule 144A securities The following table details the Company's reverse-dual currency securities as of December 31.

Investment Securities by Type of Issuance 2023 2022 (In millions) Amortized Cost (1) Fair Value Amortized Cost (1) Fair Value Publicly issued securities: Fixed maturity securities $ 72,218 $ 75,622 $ 77,176 $ 79,090 Equity securities 838 838 882 882 Total publicly issued 73,056 76,460 78,058 79,972 Privately issued securities: (2) Fixed maturity securities (3) 16,290 17,325 17,349 17,861 Equity securities 250 250 209 209 Total privately issued 16,540 17,575 17,558 18,070 Total investment securities $ 89,596 $ 94,035 $ 95,616 $ 98,042 (1) Net of allowance for credit losses (2) Primarily consists of securities owned by Aflac Japan (3) Excludes Rule 144A securities The following table details the Company's reverse-dual currency securities as of December 31.

Management's Discussion and Analysis of Financial Condition and Results of Operations The Company makes its accounting designation of net investment hedge at the beginning of each quarter.

The Company makes its accounting designation of net investment hedge at the beginning of each quarter.

GAAP. These principles are established primarily by the FASB. In this MD&A, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification™ (ASC). The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations.

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations.

As of December 31, 2022, a remaining balance of 116.6 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors. See Note 11 of the Notes to the Consolidated Financial Statements for additional information. In August 2022, the IRA was signed into U.S. law.

As of December 31, 2023, a remaining balance of 77.7 million shares of the Company's common stock was available for purchase under share repurchase authorizations by its board of directors. See Note 11 of the Notes to the Consolidated Financial Statements for additional information. Cash dividends paid to shareholders in 2023 of $1.68 per share increased 5.0% over 2022.

All investments in this program must have a minimum rating at purchase of low BB using the Company's above described rating methodology and are managed by the Company's internal credit portfolio management team. Fixed Maturity Securities by Sector The Company maintains diversification in investments by sector to avoid concentrations to any one sector, thus managing exposure risk.

As of December 31, 2022, Aflac U.S. had outstanding borrowings of $609 million reported in its balance sheet. See Note 3 of the Notes to the Consolidated Financial Statements for details on certain investment commitments. Financing Activities Cash flows from financing activities consist primarily of share repurchases, dividends to shareholders and from time to time debt issuances and redemptions.

As of December 31, 2023, Aflac U.S. had outstanding borrowings of $505 million reported in its balance sheet. See Note 3 of the Notes to the Consolidated Financial Statements for details on certain investment commitments.

The objectives of this program include enhancing the yield on invested assets, achieving further diversification of credit risk, and mitigating the risk of rising interest rates and hedge costs through the acquisition of floating rate assets. The Company maintains an allocation to higher yielding corporate bonds within the Aflac Japan and Aflac U.S. portfolios.

The preparation and evaluation of these critical accounting estimates involve the use of various assumptions developed from management’s analyses and judgments. The 64 Item 7.

The preparation and evaluation of these critical accounting estimates involve the use of various assumptions developed from management’s analyses and judgments. Calculations of DAC and the LFPB require the use of estimates based on actuarial valuation techniques.

This change in functional currency resulted in the Company recognizing an income tax benefit of $452 million ($0.71 per basic and diluted share, respectively) in 2022. An increase or decrease in the Company's effective tax rate by one percentage point would have resulted in an increase or decrease in the Company's 2022 income tax expense of $42 million.

The release of the deferred tax liability resulted in the Company recognizing an income tax benefit of $174 million in 2023 and $452 million in 2022. An increase or decrease in the Company's effective tax rate by one percentage point would have resulted in an increase or decrease in the Company's 2023 income tax expense of $43 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

233 edited+202 added−104 removed125 unchanged

2022 filing

2023 filing

We involved valuation professionals with specialized skills and knowledge to assist in assessing the estimated fair values of such securities, which included • Evaluating the Company's valuation methodology for compliance with U.S. generally accepted accounting principles. • Assessing the Company's model developed by a third party to estimate the fair value of privately issued securities by determining that differences in fair value between that model and the internally developed model above pre-established tolerances, if any, were investigated by the Company. • Evaluating, for a selection of privately issued securities, the comparable securities used to develop an issuer-specific credit curve by assessing whether the determination of comparable securities was reasonable based on the Company’s methodology and our knowledge of the securities and the markets for such securities. • Developing an independent estimate of fair value for a selection of privately issued securities based on independently developed valuation models and assumptions, as applicable, using market data sources and comparing our independent estimate to the Company's fair value.

We involved valuation professionals with specialized skills and knowledge to assist in assessing the estimated fair values of such securities, which included • Evaluating the Company's valuation methodology for compliance with U.S. generally accepted accounting principles • Assessing the Company's model developed by a third party to estimate the fair values of privately issued securities by determining that differences in fair values between that model and an internally developed model above pre-established tolerances, if any, were investigated by the Company • Evaluating, for a selection of privately issued securities, the comparable securities used to develop an issuer-specific credit curve by assessing whether the determination of comparable securities was reasonable based on the Company’s methodology and our knowledge of the securities and the markets for such securities • Developing an independent estimate of fair value for a selection of privately issued securities based on independently developed valuation models and assumptions, as applicable, using market data sources and comparing our independent estimate to the Company's fair value.

Commercial mortgage and other loans include transitional real estate loans (TREs), commercial mortgage loans (CMLs) and middle market loans (MMLs). The Company's investments in TREs, CMLs, and MMLs are accounted for as loan receivables and are recorded at amortized cost on the acquisition date.

Commercial mortgage and other loans include transitional real estate loans (TREs), commercial mortgage loans (CMLs), middle market loans (MMLs), and other loans. The Company's investments in TREs, CMLs, MMLs, and other loans are accounted for as loan receivables and are recorded at amortized cost on the acquisition date.

For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company uses various estimation techniques consistent with the fair value guidance in ASC 820, which include, but are not limited to: (i) for tenors where there is less observable market data and/or the observable market data is available for similar instruments, estimating tenor-specific single-A credit spreads and applying them to risk-free government rates; (ii) for tenors where there is very limited or no observable single-A or similar market data, interpolation and extrapolation techniques.

For the discount rates applicable to tenors for which the single-A debt market is not liquid or there is little or no observable market data, the Company uses various estimation techniques consistent with the fair value guidance in ASC 820 - Fair Value Measurement, which include, but are not limited to: (i) for tenors where there is less observable market data and/or the observable market data is available for similar instruments, estimating tenor-specific single-A credit spreads and applying them to risk-free government rates; (ii) for tenors where there is very limited or no observable single-A or similar market data, interpolation and extrapolation techniques.

DERIVATIVE INSTRUMENTS The Company's freestanding derivative financial instruments have historically consisted of: • foreign currency forwards and options used in hedging foreign exchange risk on U.S. dollar-denominated investments in Aflac Japan's portfolio, with options used on a standalone basis and/or in a collar strategy; • foreign currency forwards and options used to economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's long term exposure to a weakening yen; • cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with certain senior notes and subordinated debentures; • foreign currency swaps that are associated with VIE bond purchase commitments, and investments in special-purpose entities, including VIEs where the Company is the primary beneficiary; • interest rate swaps used to economically hedge interest rate fluctuations in certain variable-rate investments; • interest rate swaptions used to hedge changes in the fair value associated with interest rate fluctuations for certain U.S. dollar-denominated available-for-sale fixed-maturity securities; and • bond purchase commitments at the inception of investments in consolidated VIEs. 122 Item 8.

These arrangements are not designated as accounting hedges, as the foreign currency remeasurement of the loan receivables impacts current period earnings, and substantially offsets gains and losses from foreign exchange forwards within net investment gains (losses). The Company also has certain foreign exchange forwards on U.S. dollar-denominated available-for-sale securities where hedge accounting is not being applied.

These arrangements are not designated as accounting hedges, as the foreign currency remeasurement of the loan receivables impacts current period earnings, and substantially offsets gains and losses from foreign currency forwards within net investment gains (losses). The Company also has certain foreign currency forwards on U.S. dollar-denominated available-for-sale securities where hedge accounting is not being applied.

Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Insurance premiums for most of the Company's health and life policies, including cancer, accident, hospital, critical illness, dental, vision, term life, whole life, long-term care and disability, are recognized as earned premiums over the premium-paying periods of the contracts when due from policyholders.

The amount of gain or loss recognized in earnings for the Company's VIEs is attributable to the derivatives in those investment structures. While the change in value of the swaps is recorded through current period earnings, the change in value of the available-for-sale fixed maturity securities associated with these swaps is recorded through other comprehensive income.

The amount of gain or loss recognized in earnings for the Company's VIEs is attributable to the derivatives in those investment structures. While the change in value of the swaps is recorded in current period earnings, the change in value of the available-for-sale fixed maturity securities associated with these swaps is recorded in other comprehensive income.

DSCR is the most recently available operating income of the underlying property compared to the required debt service of the loan. For MMLs and held-to-maturity fixed maturity securities, the Company’s key credit quality indicator is credit ratings.

DSCR is the most recently available net operating income of the underlying property compared to the required debt service of the loan. For MMLs and held-to-maturity fixed maturity securities, the Company’s key credit quality indicator is credit ratings.

Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Aflac Incorporated: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Aflac Incorporated and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of earnings, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2022, and the related notes and financial statement schedules II, III, and IV (collectively, the consolidated financial statements).

Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Aflac Incorporated: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Aflac Incorporated and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2023, and the related notes and financial statement schedules II, III, and IV (collectively, the consolidated financial statements).

The Company also considers ratings from Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security it owns including seniority in the issuer's capital structure, covenant protections, or other relevant features. From these reviews, the Company evaluates the issuers' continued ability to service the Company's investment through payment of interest and principal. 114 Item 8.

Diluted EPS is computed by dividing net earnings by the weighted-average number of shares outstanding for the period plus the shares representing the dilutive effect of share-based awards. Reclassifications: Certain reclassifications have been made to prior-year amounts to conform to current-year reporting classifications. These reclassifications had no impact on net earnings or total shareholders' equity. 95 Item 8.

The Company's security lending policy requires that the fair value of the securities received as collateral be 102% or more of the fair value of the loaned securities and that unrestricted cash received as collateral be 100% or more of the fair value of the loaned securities.

The Company's securities lending policy requires that the fair value of the securities received as collateral be 102% or more of the fair value of the loaned securities and that unrestricted cash received as collateral be 100% or more of the fair value of the loaned securities.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of December 31, 2022 and 2021, respectively. Certain fixed maturity securities can be pledged as collateral as part of derivative transactions, or pledged to support state deposit requirements on certain investment programs. For additional information regarding pledged securities related to derivative transactions, see Note 4.

The Company did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of December 31, 2023 and 2022, respectively. Certain fixed maturity securities can be pledged as collateral as part of derivative transactions, or pledged to support state deposit requirements on certain investment programs. For additional information regarding pledged securities related to derivative transactions, see Note 4.

The Company's net investment hedge was effective during the years ended December 31, 2022, 2021 and 2020. Non-qualifying Strategies For the Company's derivative instruments in consolidated VIEs that do not qualify for hedge accounting treatment, all changes in their fair value are reported in current period earnings within net investment gains (losses).

The Company's net investment hedge was effective during the years ended December 31, 2023, 2022 and 2021. Non-qualifying Strategies For the Company's derivative instruments in consolidated VIEs that do not qualify for hedge accounting treatment, all changes in their fair value are reported in current period earnings within net investment gains (losses).

GAAP accounting guidance for segment reporting, the Company evaluates and manages its business segments using a financial performance measure called pretax adjusted earnings. Adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control. Adjusted revenues are U.S.

GAAP accounting guidance for segment reporting, the Company evaluates and manages its business segments using a financial performance measure called pretax adjusted earnings. • Pretax adjusted earnings are adjusted revenues less benefits and adjusted expenses. The adjustments to both revenues and expenses account for certain items that cannot be predicted or that are outside management’s control.

It also includes the change in the fair value of the interest rate swaptions related to the time value of the swaptions which is recognized as a component of other comprehensive income (loss). (2) Gains and losses on foreign currency forwards and options and related hedged items are reported in the consolidated statement of earnings as net investment gains (losses).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

The most significant items on the Company's balance sheet that involve a greater degree of accounting estimates and actuarial determinations subject to changes in the future are the valuation of investments and derivatives, deferred policy acquisition costs (DAC), liabilities for future policy benefits and unpaid policy claims, and income taxes.

For additional information regarding the Company's Aflac Japan net investment hedge, see the Hedging Activities subsection of MD&A. Interest Rate Risk The Company's primary interest rate exposure is to the impact of changes in interest rates on the fair value of its investments in debt securities.

For additional information regarding the Company's Aflac Japan net investment hedge, see the Hedging Activities subsection of Item 7. MD&A. Interest Rate Risk The Company's primary interest rate exposure is to the impact of changes in interest rates on the fair value of its investments in debt securities.

Comparison of Interest Rates for Future Policy Benefits and Investment Yields (Net of Investment Expenses) 2022 2021 U.S. Japan U.S.

Comparison of Interest Rates for Future Policy Benefits and Investment Yields (Net of Investment Expenses) 2023 2022 2021 U.S. Japan U.S. Japan U.S.

When the issuer is a special financing vehicle or a branch or subsidiary of a global company, then the Company considers any guarantees and/or legal, regulatory and corporate relationships of the issuer relative to its ultimate parent in determining the proper assignment of country risk. 76 Item 7A.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls, with the assistance of valuation professionals, over the Company’s process to estimate the fair value of certain privately issued securities.

For internal replacement transactions where the resulting contract is substantially unchanged, unamortized deferred acquisition costs from the original policy continue to be amortized over the expected life of the new policy, and the costs of replacing the policy are accounted for as policy maintenance costs and expensed as incurred.

For internal replacement transactions where the resulting contract is substantially unchanged, unamortized deferred acquisition costs from the original policy continue to be amortized over the expected life of the cohort, and the costs of replacing the policy are accounted for as policy maintenance costs and expensed as incurred.

The remaining maximum length of time for which these cash flows are hedged is approximately four years. The derivatives in the Company's consolidated VIEs that are not designated as accounting hedges are discussed in the "non-qualifying strategies" section of this note.

The remaining maximum length of time for which these cash flows are hedged is approximately three years. The derivatives in the Company's consolidated VIEs that are not designated as accounting hedges are discussed in the Non-qualifying Strategies section of this note.

For discontinued cash flow hedges, including those where the derivative is sold, terminated or exercised, amounts previously deferred in other comprehensive income (loss) are reclassified into earnings when earnings are impacted by the cash flow of the hedged item.

In addition, the Parent Company, other operating business units that are not individually reportable, and business activities, including reinsurance activities, not included in Aflac Japan or Aflac U.S. are included in Corporate and other. The Company does not allocate corporate overhead expenses to business segments. Consistent with U.S.

In addition, the Parent Company, other operating business units that are not individually reportable, business activities, including reinsurance activities, not included in Aflac Japan or Aflac U.S. and intercompany eliminations are included in Corporate and other. The Company does not allocate corporate overhead expenses to business segments. Consistent with U.S.

Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Aflac Incorporated: Opinion on Internal Control Over Financial Reporting We have audited Aflac Incorporated and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Aflac Incorporated: Opinion on Internal Control Over Financial Reporting We have audited Aflac Incorporated and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of earnings, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes and financial statement schedules II, III, and IV (collectively, the consolidated financial statements), and our report dated February 23, 2023 expressed an unqualified opinion on those consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedules II, III, and IV (collectively, the consolidated financial statements), and our report dated February 22, 2024 expressed an unqualified opinion on those consolidated financial statements.

The Company’s methodology for estimating credit losses for available-for-sale fixed maturity securities utilizes the discounted cash flow model, based on past events, current market conditions and future economic conditions, as well as industry analysis and credit ratings of the fixed maturity securities.

The Company’s methodology for estimating credit losses for available-for-sale securities utilizes the discounted cash flow model, based on past events, current market conditions and future economic conditions, as well as industry analysis and credit ratings of the securities.

This included controls over the Company’s determination of comparable securities, when appropriate, to develop an issuer- specific credit curve to be used in the valuation models to estimate fair value.

This included controls over the Company’s determination of comparable securities, when appropriate, to develop an issuer-specific credit curve to be used in the valuation models to estimate fair values.

If the fair value is higher than the amortized cost for debt securities, the excess is an unrealized gain, and if lower than cost, the difference is an unrealized loss. The net unrealized gains and losses on securities available for sale, less related deferred income taxes, are recorded through other comprehensive income and included in accumulated other comprehensive income.

If the fair value is higher than the amortized cost for debt securities, the excess is an unrealized gain, and if lower than cost, the difference is an unrealized loss. The net unrealized gains and losses on securities available-for-sale, less related deferred income taxes, are recorded through other comprehensive income and included in accumulated other comprehensive income. 93 Item 8.

If collateral posting agreements are not in place, the counterparty risk associated with foreign currency forwards and foreign currency options is the risk that at expiry of the contract, the counterparty is unable to deliver the agreed upon amount of yen at the agreed upon price or delivery date, thus exposing the Company to additional unhedged exposure to U.S. dollars in the Aflac Japan investment portfolio.

If collateral posting agreements are not in place or the counterparty defaults on its collateral posting obligations, the counterparty risk associated with foreign currency forwards and foreign currency options is the risk that at expiry of the contract, the counterparty is unable to deliver the agreed upon amount of yen at the agreed upon price or delivery date, thus exposing the Company to additional unhedged exposure to U.S. dollars in the Aflac Japan investment portfolio.

For loans where the Company receives as collateral securities that the Company is not permitted to sell or repledge, the collateral is not reflected on the consolidated financial statements. 121 Item 8.

See Note 4 of the accompanying Notes to the Consolidated Financial Statements for more information. Equity Risk Market prices for equity securities are subject to fluctuation and consequently the amount realized in the subsequent sale of an investment may significantly differ from the reported market value.

See Note 4 of the Notes to the Consolidated Financial Statements for additional information. Equity Risk Market prices for equity securities are subject to fluctuation and consequently the amount realized in the subsequent sale of an investment may significantly differ from the reported market value.

Based on the Company's evaluation under this framework, management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2022.

Based on the Company's evaluation under this framework, management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2023.

Fair value of certain privately issued securities As discussed in Note 5 to the consolidated financial statements, the Company invests in certain privately issued securities that require significant judgment in the estimation of fair value.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the portion of the hedging instrument included in the assessment of effectiveness is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

For derivative instruments that are designated in cash flow hedge relationships, the gain or loss on the portion of the hedging instrument included in the assessment of effectiveness is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $6.8 billion at December 31, 2022 and 2021, respectively, which may not be sold or re-pledged, unless the counterparty is in default. Such securities collateral is not reflected on the consolidated financial statements.

In connection with securities lending, in addition to cash collateral received, the Company received from counterparties securities collateral of $4.3 billion and $6.8 billion at December 31, 2023, and 2022, respectively, which may not be sold or re-pledged, unless the counterparty is in default. Such securities collateral is not reflected on the consolidated financial statements.

At December 31, 2022, debt securities with a fair value of $15 million were on deposit with regulatory authorities in the U.S. (including U.S. territories). The Company retains ownership of all securities on deposit and receives the related investment income. For general information regarding the Company's investment accounting policies, see Note 1. 4.

At December 31, 2023, debt securities with a fair value of $20 million were on deposit with regulatory authorities in the U.S. (including U.S. territories). The Company retains ownership of all securities on deposit and receives the related investment income. For general information regarding the Company's investment accounting policies, see Note 1. 4.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 23, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

KPMG LLP (PCAOB Firm ID 185), an independent registered public accounting firm, has issued an attestation report from the firm's location in Atlanta, Georgia on the effectiveness of internal control over the Company's financial reporting as of December 31, 2022, which is included herein. 78 Item 8.

The fair value of privately issued securities are estimated using discounted cash flow valuation models, developed by a third-party pricing vendor, and take into consideration unique characteristics of the securities and other market information to determine an issuer-specific credit curve to estimate expected cash flows.

The fair values of privately issued securities are estimated using a discounted cash flow valuation model, developed by a third-party pricing vendor, and take into consideration unique characteristics of the securities and other market information to determine an issuer-specific credit curve to estimate expected cash flows.

The Company has investments in variable interest entities (VIEs). Criteria for evaluating VIEs for consolidation focuses on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity.

Criteria for evaluating VIEs for consolidation focuses on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity.

Reinsurance premiums and benefits paid or provided are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums, benefits and DAC are reported net of insurance ceded.

In these Notes to the Consolidated Financial Statements, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification TM (ASC). The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations.

GAAP issued by the FASB are derived from the FASB Accounting Standards Codification TM (ASC). The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates based on currently available information when recording transactions resulting from business operations.

Credit loss changes are recorded as a component of net investment gains and losses for the Company’s held-to-maturity and available-for-sale securities, loan receivables, loan commitments and reinsurance recoverables, whereas credit losses on premium receivables are recorded in net earned premiums in the consolidated statement of earnings.

Credit loss changes are recorded as a component of net investment gains (losses) for the Company’s held-to-maturity and available-for-sale securities, loan receivables, including collateral dependent assets, loan commitments and reinsurance recoverables, whereas credit losses on premium receivables are recorded in net earned premiums in the consolidated statement of earnings.

The Company's debt impairment model focuses on the ultimate collection of the cash flows from its investments and whether the Company has the intent to sell or if it is more likely than not the Company would be required to sell the security prior to recovery of its amortized cost.

The Company's available-for-sale impairment model focuses on the ultimate collection of the cash flows from its investments and whether the Company has the intent to sell or if it is more likely than not the Company would be required to sell the security prior to recovery of its amortized cost.

As of December 31, 2022, the Parent Company had $1.9 billion notional amount of cross-currency interest rate swap agreements related to certain of its U.S. dollar-denominated senior notes to effectively convert a portion of the interest on the notes from U.S dollar to Japanese yen. Changes in the values of these swaps are recorded through current period earnings.

As of December 31, 2023, the Parent Company had $1.2 billion notional amount of cross-currency interest rate swap agreements related to certain of its U.S. dollar-denominated senior notes to effectively convert a portion of the interest on the notes from U.S. dollar to Japanese yen. Changes in the values of these swaps are recorded in current period earnings.

(In years) 2022 2021 Dollar-denominated debt securities 7 8 Policy benefits and related expenses to be paid in future years 8 8 Premiums to be received in future years on policies in force 7 7 The following table shows a comparison of average required interest rates for future policy benefits and investment yields, based on amortized cost, for the years ended December 31.

(In years) 2023 2022 U.S. dollar-denominated debt securities 7 7 Policy benefits and related expenses to be paid in future years 8 8 Premiums to be received in future years on policies in force 6 7 The following table shows a comparison of average required interest rates for future policy benefits and investment yields, based on amortized cost, for the years ended December 31.

VIEs - Not Consolidated The table below reflects the amortized cost, fair value and balance sheet caption in which the Company's investment in VIEs not consolidated are reported as of December 31. 120 Item 8.

VIEs - Not Consolidated The table below reflects the amortized cost, fair value and balance sheet caption in which the Company's investment in VIEs not consolidated are reported as of December 31.

These investments are classified as limited partnerships and included in other investments in the consolidated balance sheet. The change in value of each investment is recorded as a reduction to net investment income. Tax credits generated by these investments are recorded as an income tax benefit in the consolidated statement of earnings.

These investments are classified as limited partnerships and included in other investments in the consolidated balance sheets. The change in value of each investment is recorded as a reduction to net investment income. Tax credits generated by these investments are recorded as an income tax benefit in the consolidated statements of earnings.

The combination of a U.S. dollar-denominated investment and cross-currency swap economically creates a yen-denominated investment and has no impact on the Company's net investment hedge position. 72 Item 7A.

The combination of a U.S. dollar-denominated investment and cross-currency swap economically creates a yen-denominated investment and has no impact on the Company's net investment hedge position.

Qualitative methods may include the comparison of critical terms of the derivative to the hedged item, and quantitative methods may include regression, dollar offset, or other statistical analysis of changes in fair value or cash flows associated with the hedge relationship.

Hedge effectiveness is assessed using qualitative and quantitative methods. Qualitative methods may include the comparison of critical terms of the derivative to the hedged item, and quantitative methods may include regression, dollar offset, or other statistical analysis of changes in fair value or cash flows associated with the hedge relationship.

For additional information on unrealized losses on debt securities, see Note 3 of the Notes to the Consolidated Financial Statements. The Company attempts to match the duration of its assets with the duration of its liabilities. The following table presents the approximate duration of Aflac Japan's yen-denominated assets and liabilities, along with premiums, as of December 31. 73 Item 7A.

For additional information on unrealized losses on debt securities, see Note 3 of the Notes to the Consolidated Financial Statements. The Company attempts to match the duration of its assets with the duration of its liabilities. The following table presents the approximate duration of yen-denominated assets and liabilities of Aflac Japan, along with premiums, as of December 31.

Tax credits on these investments of $83 in 2022 and $115 in 2021 have been recorded as an income tax benefit in the consolidated statement of earnings.

Tax credits on these investments of $334, $83, and $115 in 2023, 2022, and 2021, respectively, have been recorded as an income tax benefit in the consolidated statement of earnings.

When assessing the effectiveness of the Company's fair value hedges, the Company excludes the changes in fair value related to the difference between the spot and the forward rate on its foreign currency forwards, the fair value not resulting from fluctuations in spot currency rates on the final notional exchange on cross currency swaps, and the time value of money of foreign exchange options and interest rate swaptions.

When assessing the effectiveness of the Company's fair value hedges, the Company excludes the changes in fair value related to the difference between the spot and forward rates on its foreign currency forwards, the change in fair value of cross-currency swaps not resulting from fluctuations in spot currency rates, and the time value component of foreign exchange options and interest rate swaptions.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported within other gains (losses), which is a component of net investment gains (losses).

Financial Statements and Supplementary Data If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported within other gains (losses), which is a component of net investment gains (losses).

Premiums from the Company's products with limited-pay features, including cancer, medical and nursing care, term life, whole life, WAYS, and child endowment, are collected over a significantly shorter period than the period over which benefits are provided. Premiums for these products are recognized as earned premiums over the premium-paying periods of the contracts when due from policyholders.

Premiums from the Company's products with limited-pay features, including cancer, medical and nursing care, term life, whole life, WAYS, and child endowment, are collected over a significantly shorter period than the contract term (i.e., the period during which benefits are provided). Premiums for these products are recognized as earned premiums over the premium-paying periods when due from policyholders.

Derivative Balance Sheet Classification The table below summarizes the balance sheet classification of the Company's derivative fair value amounts, as well as the gross asset and liability fair value amounts, at December 31. The fair value amounts presented do not include income accruals.

Financial Statements and Supplementary Data Derivative Balance Sheet Classification The table below summarizes the balance sheet classification of the Company's derivative fair value amounts, as well as the gross asset and liability fair value amounts, at December 31. The fair value amounts presented do not include income accruals.

For any of its fixed maturity securities with significant declines in fair value, the Company performs detailed analyses to identify whether the drivers of the declines are due to general market drivers, such as the recent rise in interest rates, or due to credit-related factors.

For any available-for-sale securities with significant declines in fair value, the Company performs detailed analyses to identify whether the drivers of the declines are due to general market drivers, such as the recent rise in interest rates, or due to credit-related factors.

Fair Value Hedging Relationships (In millions) Hedging Derivatives Hedged Items Hedging Derivatives Hedged Items Total Gains (Losses) Gains (Losses) Excluded from Effectiveness Testing (1) Gains (Losses) Included in Effectiveness Testing (2) Gains (Losses) (2) Net Investment Gains (Losses) Recognized for Fair Value Hedge 2022: Foreign currency options Fixed maturity securities $ (18) $ (18) $ 0 $ 0 $ 0 Total gains (losses) $ (18) $ (18) $ 0 $ 0 $ 0 2021: Foreign currency forwards Fixed maturity securities $ (7) $ 0 $ (7) $ 6 $ (1) Foreign currency options Fixed maturity securities (26) (25) (1) 4 3 Total gains (losses) $ (33) $ (25) $ (8) $ 10 $ 2 2020: Foreign currency forwards Fixed maturity securities $ (14) $ (8) $ (6) $ 7 $ 1 Foreign currency options Fixed maturity securities (9) (8) (1) 1 0 Total gains (losses) $ (23) $ (16) $ (7) $ 8 $ 1 (1) Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statement of earnings as net investment gains (losses).

Fair Value Hedging Relationships (In millions) Hedging Derivatives Hedged Items Hedging Derivatives Hedged Items Total Gains (Losses) Gains (Losses) Excluded from Effectiveness Testing (1) Gains (Losses) Included in Effectiveness Testing (2) Gains (Losses) (2) Net Investment Gains (Losses) Recognized for Fair Value Hedge 2023: Foreign currency options Fixed maturity securities $ (65) $ (65) $ 0 $ 0 $ 0 Total gains (losses) $ (65) $ (65) $ 0 $ 0 $ 0 2022: Foreign currency options Fixed maturity securities $ (18) $ (18) $ 0 $ 0 $ 0 Total gains (losses) $ (18) $ (18) $ 0 $ 0 $ 0 2021: Foreign currency forwards Fixed maturity securities $ (7) $ 0 $ (7) $ 6 $ (1) Foreign currency options Fixed maturity securities (26) (25) (1) 4 3 Total gains (losses) $ (33) $ (25) $ (8) $ 10 $ 2 (1) Gains (losses) excluded from effectiveness testing includes the forward point on foreign currency forwards and time value change on foreign currency options which are reported in the consolidated statements of earnings as net investment gains (losses).

Quantitative and Qualitative Disclosures About Market Risk Similarly, the combination of the U.S. corporate bonds and the foreign currency forwards and options that the Company has entered into, as discussed in the Aflac Japan Investment subsection of MD&A, economically creates a yen-denominated investment that qualifies for inclusion as a component of the Company's investment in Aflac Japan for net investment hedge purposes.

Similarly, the combination of the U.S. corporate bonds and the foreign currency forwards and options that the Company has entered into, as discussed in the Aflac Japan Investment subsection of MD&A, economically creates a yen-denominated investment that qualifies for inclusion as a component of the Company's investment in Aflac Japan for net investment hedge purposes.

Significant increases in interest rates could cause declines in the values of the Company's investment portfolio which will also have a secondary impact on the Company's overall evaluation of its deferred tax asset position.

Significant increases in interest rates cause declines in the values of the Company's investment portfolio which also has a secondary impact on the Company's overall evaluation of its deferred tax asset position.

For additional information on interest rate derivatives, see the Hedging Activities subsection of MD&A and Note 4 of the accompanying Notes to the Consolidated Financial Statements. 74 Item 7A.

For additional information on interest rate derivatives, see the Hedging Activities subsection of Item 7. MD&A and Note 4 of the Notes to the Consolidated Financial Statements. 77 Item 7A.

For derivative instruments that are designated and qualify as fair value hedges, the gain or loss on the hedged item and the portion of the hedging instrument included in the assessment of effectiveness are recorded in the line item of the consolidated statements of earnings in which gain or loss on the hedged item is recorded.

For derivative instruments that are designated in fair value hedge relationships, the gain or loss on the hedged item and the portion of the hedging instrument included in the assessment of effectiveness are recorded in the line item of the consolidated statements of earnings in which gain or loss on the hedged item is recorded.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Atlanta, Georgia February 23, 2023 79 Item 8.

Under the equity method of accounting, the Company reports its proportionate share of the investee's 91 Item 8. Financial Statements and Supplementary Data earnings or losses as a component of net investment income in its consolidated statements of earnings. The underlying investments held by the Company’s limited partnerships primarily consist of private equity and real estate.

Under the equity method of accounting, the Company reports its proportionate share of the investee's earnings or losses as a component of net investment income in its consolidated statements of earnings. The underlying investments held by the Company’s limited partnerships primarily consist of private equity and real estate.

The carrying value for MMLs included $28 million and $11 million for a short term credit facility that is reflected in other liabilities on the consolidated balance sheets, as of December 31, 2022, and 2021, respectively. As of December 31, 2022, the Company had commitments of approximately $771 million to fund future MMLs.

The carrying value for MMLs included $24 million and $28 million for a short-term credit facility that is reflected in other liabilities on the consolidated balance sheets, as of December 31, 2023, and 2022, respectively. As of December 31, 2023, the Company had commitments of approximately $820 million to fund future MMLs.

The Company monitors the credit ratings periodically, but not less frequently than quarterly. 116 Item 8. Financial Statements and Supplementary Data The following tables present as of December 31, 2022 the amortized cost basis of TREs, CMLs and MMLs by year of origination and credit quality indicator .

The Company monitors the credit ratings periodically, but not less frequently than quarterly. 118 Item 8. Financial Statements and Supplementary Data The following tables present as of December 31, 2023 the amortized cost basis of TREs, CMLs, MMLs, and other loans by year of origination and credit quality indicator .

If the Company deems that the embedded derivative's terms are not clearly and closely related to the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the derivative is separated from that contract, held at fair value, and reported with the host instrument in the consolidated balance sheet, with changes in fair value reported in earnings.

If the Company determines that the embedded derivative is not clearly and closely related to the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is separated from that contract, held at fair value, and reported with the host instrument in the consolidated balance sheets, with changes in fair value reported in earnings.

Upon adoption, opening equity will be adjusted for the Transition Date impacts to AOCI and retained earnings and prior periods presented (years 2021 and 2022) will be restated following the updated standard.

Upon adoption, the Company adjusted opening equity for the Transition Date impacts to AOCI and retained earnings and adjusted prior periods presented (years 2021 and 2022) following the updated standard.

The Company’s held-to-maturity portfolio is composed of investment grade securities that are senior unsecured instruments, while its MMLs generally have below-investment-grade ratings but are typically senior secured instruments. The Company monitors the credit ratings periodically, but not less frequently than quarterly.

For interest rate swaptions and cross-currency interest rate swaps designated under fair value hedges of interest rate risk, the change in the time value of money is recognized in other comprehensive income (loss) and amortized into earnings (net investment income) over its legal term.

For interest rate swaptions and cross-currency interest rate swaps designated in fair value hedges of interest rate risk, the excluded component is recognized in other comprehensive income (loss) and amortized into earnings (net investment income) over its legal term.

This loan portfolio is generally considered higher quality investment grade loans. Middle Market Loans MMLs are typically first lien senior secured cash flow loans to small to mid-size companies for working capital, refinancing, acquisition, and recapitalization. These loans are generally considered to be below investment grade.

Middle Market Loans MMLs are typically first lien senior secured cash flow loans to small to mid-size companies for working capital, refinancing, acquisition, and recapitalization. These loans are generally considered to be below investment grade.

These accounting estimates and actuarial determinations are sensitive to market conditions, investment yields, mortality, morbidity, commission and other acquisition expenses, and terminations by policyholders. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised and reflected in operating results.

These accounting estimates and actuarial determinations are sensitive to market conditions, investment yields, interest rates, mortality, morbidity, commission and other acquisition expenses and terminations by policyholders. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised and reflected in the consolidated financial statements.

See the accompanying Notes to the Consolidated Financial Statements. 83 Item 8.

See the accompanying Notes to the Consolidated Financial Statements. 88 Item 8.

Judgment is required to determine the inputs and assumptions used in the valuation models, including the determination of the most appropriate comparable securities to develop an issuer-specific credit curve when it cannot be developed from the specific security features.

Judgment is required to determine the inputs and assumptions used in the valuation models, including the determination of the most appropriate comparable securities to develop an issuer- 83 Item 8. Financial Statements and Supplementary Data specific credit curve when it cannot be developed from the specific security features.

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Top changes in Aflac's 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

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