AFL
Aflac
Insurance / BV
★ Quality 31/100Price today
$117.21
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What this business is made of
The business
Sells peace of mind to Japanese employees and collects before it pays.
Aflac sells supplemental health and life insurance —cancer, accident, disability— mostly in Japan and the U.S. It makes money two ways: underwriting with discipline (with a loss ratio —claims over premiums— near 54%, it pays out barely half of what it collects) and investing the float —the cash from premiums not yet used to pay claims— in bonds.
Decades of selling in the Japanese workplace give it distribution and a brand a rival can't buy with a check. The duck's recognition and corporate-channel loyalty are hard to replicate.
Revenue history
From $21.6B to $17.2B in 4 years. Sales are shrinking — the engine is losing steam.
Where each $100 of sales goes
Revenue $17.2B · FY2025
Of every $100 in sales, $79 goes to costs and operations; $21 is left as net profit (21% margin).
Catalysts and risks
54% loss ratio: very disciplined underwriting that leaves ample margin for the float.
Sustained 12% ROE, solid for a supplemental-products insurer.
Steady buybacks that raise book value per share over time.
Revenue falling from $21.6B (2021) to $17.2B (2025): the business is shrinking in dollars.
Yen exposure: much of the premiums are collected in a currency weak against the dollar.
Interest rates and credit: the float's yield depends on its bond portfolio.
Charlie's note
“Real quality with a 12% ROE, but paying 1.2x book for a shrinking business is no gift. Reasonable, no more.”
Analysis · June 2026
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