Aflac Incorporated
Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. It operates in two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers cancer, medical, nursing care, whole life, and GIFT insurance products, as well as WAYS and child endowment, and Tsumitasu insurance products in Japan. Its Aflac U.S. segment provides accident, disability, cancer, critical illness, hospital indemnity, dental, vision, and life insurance products in the United States. The company also provides hearing, final expense, pet, Medicare supplement, supplemental dental and vision, short-term disability, and absence management insurance products, as well as cafeteria plans. It sells its products to individuals, families, and business owners through individual, independent corporate, and affiliated corporate agencies; banks; independent associates/career agents; and brokers. Aflac Incorporated was founded in 1955 and is headquartered in Columbus, Georgia.
What does it do?
Aflac sells supplemental insurance — think of it as a financial safety net that pays you cash when you get sick or injured, on top of whatever your regular health insurance covers. If you break your arm and miss two weeks of work, Aflac cuts you a check to help cover rent, groceries, and bills your normal insurance won't touch. They're best known for their duck mascot, but the real business is selling policies for cancer, accidents, hospital stays, and disabilities. They operate mainly in two places: the United States and Japan, where they're actually one of the biggest life insurers in the entire country.
Aflac sits in a sweet spot right now — as healthcare costs rise and traditional insurance gaps widen, more people and employers are looking for exactly the kind of supplemental coverage Aflac specializes in. With a $60 billion market cap and consistent profits, it's one of the most financially stable insurers in the world, making it a go-to name for investors who want steady, boring reliability. Japan's aging population also creates a long-term structural tailwind, since older people tend to buy more healthcare-related insurance.
How does it make money?
Aflac makes money by collecting insurance premiums — the regular payments customers make to keep their policies active — and investing that cash pool until claims need to be paid out. In Japan, which is their biggest market, they generate the majority of their roughly $17.5 billion in annual revenue, primarily through cancer and medical insurance products sold to millions of Japanese households. The U.S. business, while smaller, sells heavily through employers as a workplace benefit, meaning companies help Aflac reach employees directly. Net income hit $3.6 billion last year, meaning for every dollar of revenue, they kept about 20 cents as profit — a solid margin for an insurer.
Why do investors care?
Investors like Aflac because it's a dividend growth machine — the company has raised its dividend every single year for over 40 years, putting it in an elite club called Dividend Aristocrats, which signals long-term financial discipline. The Japan business is massive and deeply entrenched, making it hard for competitors to displace them. In the U.S., there's real runway to grow as more small and mid-size employers add supplemental benefits to attract workers. The big thing that has to go right is currency: because so much revenue comes from Japan, a weak Japanese yen versus the U.S. dollar can shrink profits when converted back to dollars.
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