AM Best Upgrades Issuer Credit Ratings of Aflac Incorporated and Its Subsidiaries

AM Best has upgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “aa” (Superior) from “aa-” (Superior) and affirmed the Financial Strength Rating (FSR) of A+ (Superior) of Aflac Life Insurance Japan, Ltd. (Aflac Japan), American Family Life Assurance Company of Columbus (Omaha, NE), American Family Life Assurance Company of New York (Albany, NY) and Continental American Insurance Company (Omaha, NE). The outlook of the Long-Term ICR has been revised to stable from positive while the outlook of the FSR is stable. These companies represent the life/health insurance subsidiaries of Aflac Incorporated (Aflac) (Columbus, GA) [NYSE: AFL] and are collectively referred to as Aflac Incorporated Group. Concurrently, AM Best has upgraded the Long-Term ICR to “a” (Excellent) from “a-” (Excellent) and all Long-Term Issue Credit Ratings (Long-Term IRs) of Aflac. The outlook of the Long-Term ICR and Long-Term IRs has been revised to stable from positive. (See below for a detailed listing of the Long-Term IRs and shelf registration).

The Credit Ratings (ratings) reflect Aflac Incorporated Group’s balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, favorable business profile and very strong enterprise risk management (ERM).

The upgrade of Aflac’s Long-Term ICRs is driven by the strength of its ERM program, which is deeply embedded in the organization’s strategy and decision making, and has impacted its balance sheet strength, operational performance and business profile positively. AM Best’s assesses ERM program as very strong, a description of a program that demonstrates robust processes within its framework that are effective in identifying potential risks early, managing those risks and mitigating them. Aflac has established clear risk appetite and tolerances with a program that is structured to control and manage those identified risks effectively. The organization for years has built a risk culture that spans vertically throughout each of its levels. AM Best’s assessment also includes an evaluation of the program’s risk defense capabilities of multiple exposures and has determined that most are managed with very high capabilities. Aflac’s ERM capabilities allowed it to develop diligent analysis and assessment of the Long Duration Target Improvement (LDTI) accounting change. The company implemented various proactive measures to ensure the balance sheet and financial flexibility remain robust following LDTI GAAP accounting changes in 2023.