

~~Standard~~	~~Description~~	~~Date of Adoption~~	~~Effect on Financial Statements or Other Significant Matters~~
ASU 2017-04 Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment			In January 2017, the FASB issued amendments simplifying the subsequent measurement of goodwill. An entity, under this update, is no longer required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, the entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.	January 1, 2020	The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
ASU 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments as clarified and amended by: ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, ASU 2019-05, Financial Instruments - Credit Losses (Topic 326), Targeted Transition Relief and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments- Credit Losses			In June 2016, the FASB issued amendments that require a financial asset (or a group of financial assets) measured at amortized cost to be presented net of an allowance for credit losses (Credit Losses ASU) in order to reflect the amount expected to be collected on the financial asset(s). The measurement of expected credit losses is amended by replacing the incurred loss impairment methodology ~~in current U.S. GAAP~~ with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information. Credit losses on available-for-sale debt securities ~~will be~~is measured in a manner similar to ~~current~~prior U.S. GAAP; however, the amendments require that credit losses be presented as an allowance rather than as a write-down. Other amendments include changes to the balance sheet presentation and interest income recognition of purchased financial assets with a more-than-insignificant credit deterioration since origination (PCD financial assets).	January 1, 2020	The Company recorded a cumulative effect adjustment with a decrease to beginning 2020 retained earnings of $56 million, net of taxes. See Note 3 of the Notes to the Consolidated Financial Statements for credit loss disclosures. The following line items in the consolidated balance sheets were most significantly impacted by the adoption of the new accounting standard: • Fixed maturity securities held to maturity, at amortized cost • Commercial mortgage and other loans • Reinsurance recoverable, included within Other assets

Accounting Pronouncements Pending Adoption



Standard	Description	Effect on Financial Statements or Other Significant Matters
~~ASU 2020-04~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~	In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU only apply to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.	~~The Company is thoroughly evaluating the adoption of this guidance and the impact on the Company’s financial position, results of operations, and disclosures.~~
ASU 2020-01 Clarifying the interactions between Topic 321, Topic 323, and Topic 815	In January 2020, the FASB issued amendments clarifying that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, the amendments clarify that for the purpose of applying certain derivative guidance in Topic 815, an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. An entity also would evaluate the remaining characteristics in Topic 815 to determine the accounting for those forward contracts and purchased options. The amendments are effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted.	The adoption of this guidance is not expected to have a significant impact on the Company's financial position, results of operations, or disclosures.
ASU 2018-12 Financial Services - Insurance, Targeted Improvements to the Accounting for Long-Duration Contracts as clarified and amended by: ASU 2019-09 Financial Services - Insurance (Topic 944): Effective Date	In August 2018, the FASB issued amendments that will significantly change how insurers account for long-duration contracts. The amendments will change existing recognition, measurement, presentation, and disclosure requirements. Issues addressed in the new guidance include: 1) a requirement to review and, if there is a change, update assumptions for the liability for future policy benefits at least annually, and to update the discount rate assumption quarterly, 2) accounting for market risk benefits at fair value, 3) simplified amortization for deferred acquisition costs, and 4) enhanced financial statement presentation and disclosures. ~~The amendments are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.~~ In November 2019, the FASB issued an amendment extending the effective date for public business entities that meet the definition of an SEC filer, excluding entities eligible to be small reporting companies as defined by the SEC, by one year. The amendments are now effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early application of the amendments is permitted. In September 2020, the FASB Board voted in favor of providing an additional year deferral for all insurance entities due to the impact of COVID-19. It is expected that this Update will be finalized in the fourth quarter of 2020 which would result in an effective date for Aflac of January 1, 2023.	The Company is thoroughly evaluating the impact of adoption and expects that the adoption will have a significant impact on the Company’s financial position, results of operations, and disclosures. The Company anticipates that the requirement to update assumptions for liability for future policy benefits will have a significant impact on its results of operations, systems, processes and controls while the requirement to update the discount rate will have a significant impact on its equity. The Company has no products with market risk benefits. The Company does not expect to early adopt the updated standard and has ~~tentatively~~ selected a modified retrospective transition method.

Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to the Company's business.

For additional information on new accounting pronouncements and recent accounting guidance and their impact, if any, on the Company's financial position, results of operations or disclosures, see Note 1 of the Notes to the Consolidated Financial Statements in the 2019 Annual Report.


2.	~~BUSINESS SEGMENT INFORMATION~~

2. BUSINESS SEGMENT INFORMATION

The Company consists of 2 reportable insurance business segments: Aflac Japan and Aflac U.S., both of which sell supplemental health and life insurance. In addition, operating 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.

The Company does not allocate corporate overhead expenses to business segments. Consistent with 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. 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 total revenues excluding net investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect Aflac’s underlying business performance. The Company excludes income taxes related to operations to arrive at pretax adjusted earnings. Information regarding operations by reportable segment and Corporate and other, follows:


	Three Months Ended March 31,						Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2020			2019		(In millions)	2020		2019		2020		2019
Revenues:						Revenues:
Aflac Japan:						Aflac Japan:
Net earned premiums	$	3,150		$	3,180	Net earned premiums	$	3,168	$	3,241	$	9,476	$	9,593
Adjusted net investment income ^(1),(2)	642			610		Adjusted net investment income (1),(2)	663		659		1,939		1,878
Other income	11			12		Other income	11		12		32		34
Total adjusted revenue Aflac Japan	3,803			3,802		Total adjusted revenue Aflac Japan	3,842		3,912		11,447		11,505
Aflac U.S.:						Aflac U.S.:
Net earned premiums	1,483			1,461		Net earned premiums	1,407		1,445		4,348		4,365
Net investment income	177			177
Net investment income (3)						Net investment income (3)	175		183		523		540
Other income	27			2		Other income	24		2		78		6
Total adjusted revenue Aflac U.S.	1,687			1,640		Total adjusted revenue Aflac U.S.	1,606		1,630		4,949		4,911
Corporate and other ⁽³⁾	104			95
Corporate and other (4)						Corporate and other (4)	87		97		292		287
Total adjusted revenues	5,594			5,537		Total adjusted revenues	5,535		5,639		16,688		16,703
Net investment gains (losses) ^(1),(2),(3)	(432		)	120
Net investment gains (losses) (1),(2),(3),(4)						Net investment gains (losses) (1),(2),(3),(4)	130		(103)		(454)		1
Total revenues	$	5,162		$	5,657	Total revenues	$	5,665	$	5,536	$	16,234	$	16,704

⁽¹⁾Amortized hedge costs of ~~$55~~$51 and ~~$62~~$66 for the three-month periods and $155 and $191 for the nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations.

⁽²⁾ Net interest cash flows from derivatives associated with certain investment strategies of ~~$(6)~~$6 and ~~$(7)~~$(4) for the three-month periods and $5 and $(18) for the nine-month periods ended ~~March 31,~~September 30, 2020 and 2019, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

⁽³⁾ Net interest cash flows from derivatives associated with certain investment strategies of $1 for the three-month period and $2 for the nine-month period ended September 30, 2020, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

(4) Amortized hedge income of ~~$29~~$22 and ~~$20~~$21 for the three-month periods $78and $61 for the nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase to net investment income when analyzing operations.

Three Months Ended
March 31,
(In millions) 2020 2019
Pretax adjusted earnings:
Aflac Japan ^(1),(2)
$ 855
$ 834

Aflac U.S. 326
323

Corporate and other ^(3),(4)
2
(18 )
    Pretax adjusted earnings ⁽⁵⁾
1,183
1,139

Net investment gains (losses) ^{(1),(2),(3),(4)}
(448 ) 103

Other income (loss) (15 ) 0

    Total earnings before income taxes $ 720
$ 1,242

Income taxes applicable to pretax adjusted earnings $ 301
$ 291

Effect of foreign currency translation on after-tax
adjusted earnings 9
(8 )


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2020		2019		2020		2019
Pretax adjusted earnings:
Aflac Japan (1),(2)	$	747	$	838	$	2,442	$	2,504
Aflac U.S. (3)	329		335		1,082		996
Corporate and other (4),(5)	(39)		(17)		(69)		(62)
Pretax adjusted earnings (6)	1,037		1,156		3,455		3,438
Net investment gains (losses) (1),(2),(3),(4),(5)	117		(120)		(497)		(49)
Other income (loss)	(1)		0		(16)		(1)
Total earnings before income taxes	$	1,153	$	1,036	$	2,942	$	3,388
Income taxes applicable to pretax adjusted earnings	$	43	$	293	$	659	$	880
Effect of foreign currency translation on after-tax adjusted earnings	3		15		17		2

(1) Amortizedhedge costs of ~~$55~~$51 and ~~$62~~$66 for the three-month periods and $155 and $191 for the nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and reported as a deduction from net investment income when analyzing operations.

(4) Amortized hedge income of ~~$29~~$22 and ~~$20~~$21 for the three-month periods and $78 and $61 for the nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, related to certain foreign currency exposure management strategies has been reclassified from net investment gains (losses) and reported as an increase in net investment income when analyzing operations.

⁽⁴⁾(5) A gain of $13 and $16 for three-month periods and ~~$17~~$43 and $50 for the ~~three-month~~nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable has been reclassified from net investment gains (losses) and included in adjusted earnings when analyzing operations.

⁽⁵⁾(6) Includes ~~$33~~$44 and $34 for the three-month periods and $122 and $100 for the nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, of interest expense on debt.

Assets were as follows:


(In millions)	March 31, 2020			December 31, 2019			(In millions)	September 30, 2020			December 31, 2019
Assets:							Assets:
Aflac Japan		$	126,955		$	127,523	Aflac Japan		$	133,995		$	127,523
Aflac U.S.		20,526			20,945		Aflac U.S.		22,621			20,945
Corporate and other		4,135			4,300		Corporate and other		4,339			4,300
Total assets		$	151,616		$	152,768	Total assets		$	160,955		$	152,768


3.	~~INVESTMENTS~~

3. INVESTMENTS

Investment Holdings

The amortized cost for the Company's investments in fixed maturity securities, the cost for equity securities and the fair values of these investments are shown in the following tables.


	September 30, 2020
(In millions)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale, carried at fair value through other comprehensive income:
Fixed maturity securities:
Yen-denominated:
Japan government and agencies	$	32,646	$	0	$	4,297	$	42	$	36,901
Municipalities	1,013		0		305		3		1,315
Mortgage- and asset-backed securities	337		0		28		1		364
Public utilities	4,585		0		960		1		5,544
Sovereign and supranational	1,054		0		82		4		1,132
Banks/financial institutions	7,505		0		683		180		8,008
Other corporate	7,934		0		1,484		86		9,332
Total yen-denominated	55,074		0		7,839		317		62,596
U.S. dollar-denominated:
U.S. government and agencies	276		0		18		0		294
Municipalities	1,143		0		161		0		1,304
Mortgage- and asset-backed securities	344		0		10		1		353
Public utilities	3,942		0		924		12		4,854
Sovereign and supranational	230		0		66		6		290
Banks/financial institutions	2,956		0		738		6		3,688
Other corporate	25,973		38		4,110		296		29,749
Total U.S. dollar-denominated	34,864		38		6,027		321		40,532
Total securities available for sale	$	89,938	$	38	$	13,866	$	638	$	103,128

March 31, 2020
(In millions)
Amortized
Cost Allowance for Credit Losses Gross
Unrealized
Gains Gross
Unrealized
Losses   Fair
  Value
Securities available for sale, carried at fair
value through other comprehensive income:
Fixed maturity securities:
  Yen-denominated:
Japan government and agencies $ 31,853
$ 0
$ 4,766
$ 14
$ 36,605
Municipalities 984
0
228
1
1,211
Mortgage- and asset-backed securities 306
0
31
0
337
Public utilities 4,412
0
430
93
4,749
Sovereign and supranational 1,300
0
33
27
1,306
Banks/financial institutions 7,159
0
404
557
7,006
Other corporate 7,817
0
753
389
8,181
Total yen-denominated 53,831
0
6,645
1,081
59,395
  U.S. dollar-denominated:
U.S. government and agencies 350
0
23
0
373
Municipalities 1,084
0
145
0
1,229
Mortgage- and asset-backed securities 152
0
8
0
160
Public utilities 3,844
0
649
50
4,443
Sovereign and supranational 239
0
65
1
303
Banks/financial institutions 2,848
0
545
21
3,372
Other corporate 25,533
63
2,531
988
27,013
Total U.S. dollar-denominated 34,050
63
3,966
1,060
36,893
Total securities available for sale $ 87,881
$ 63
$ 10,611
$ 2,141
$ 96,288

EXECUTIVE SUMMARY

Company Overview

Aflac Incorporated (the Parent Company) and its subsidiaries (collectively, the Company) provide financial protection to more than 50 million people worldwide. The Company’s principal business is providing 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. The Company's insurance business consists of two reporting segments: Aflac Japan and Aflac U.S. The Parent Company’s primary insurance subsidiaries are Aflac Life Insurance Japan Ltd. in Japan (Aflac Japan) and 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 Argus Dental & Vision, ~~Inc~~Inc. (Argus), which provides a platform for Aflac Dental and Vision in the U.S. (collectively, Aflac U.S.).

COVID-19

On March 11, 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. As of April 27, 2020, the U.S. Centers for Disease Control and Prevention (CDC) website listed over 920,000 total COVID-19 confirmed and probable cases in the U.S. and over 52,000 COVID-19 confirmed and probable deaths, as defined by the CDC. As of April 27, 2020, the Japan Ministry of Health, Labor, and Welfare reported over 13,200 total COVID-19 cases in Japan and over 350 confirmed COVID-19 deaths. The impact of COVID-19 on the Company ~~is evolving,~~continues to evolve, and its future effects ~~are uncertain and the~~remain uncertain. The Company iscontinues to closely ~~monitoring~~monitor the effects and risks of COVID-19 to assess its impact on economic conditions in Japan and the U.S. and on the Company's business, financial condition, results of operations, liquidity and capital position in a number of ways, and may cause changes to estimates of future earnings, capital deployment, regulatory capital position, segment dividend payout ratios and other guidance the Company provided under 2020 Outlook in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of ~~its~~the 2019 Annual Report. See Item 1A. Risk Factor in this Quarterly Report on Form 10-Q entitled "Major public health issues, and specifically the novel coronavirus, COVID-19 and any resulting economic effects and government interventions, could have an adverse impact on the Company's financial condition and results of operations and other aspects of its business" for additional information.

~~The Company is mobilizing its resources to ensure adequate liquidity, a strong capital position, business continuity and employee safety in both Japan and the U.S. during the pandemic.~~ The Company’s efforts and other developments are outlined below.


•	•Liquidity and Capital Resources

The Company entered the crisis in a strong capital and liquidity position, having maintained capital ratios in Japan and the U.S. at a level designed to absorb a degree of market volatility. To further support liquidity and capital resources, the Parent Company, in March 2020, issued four series of senior notes totaling ¥57.0 billion and, in April 2020, issued $1$1.0 billion in senior notes through public debt offerings under its U.S. shelf registration statement. Accordingly, as of ~~April 24,~~September 30, 2020 the ~~Parent~~ Company ~~holds~~held approximately $5$5.6 billion in ~~liquidity~~cash and ~~capital~~cash equivalents for stress conditions, which includes the Parent Company's target minimum amount of $2.0 billion held to provide a capital buffer and liquidity support at the holding company. Even after these debt offerings, the Company’s leverage ratio remains at levels that the Company believes are adequate to maintain current ratings and leave capacity for further debt issuances. The Company has available liquidity in its unsecured revolving credit facilities of $1 billion and ¥100.0 billion, respectively, and currently has no borrowings under either of these facilities. In April 2020, Aflac increased its internal limit for Federal Home Loan Bank of Atlanta (FHLB) borrowings to $800 million, $300 million of which the Company has designated to be used for short-term liquidity needs and subject to qualified collateral availability and other conditions. The Company ~~continues~~has the ability to ~~evaluate~~adjust cash flow management from other sources of liquidity including reinvestment cash flows and selling investments.

The Company remains committed to prudent liquidity and capital management and is taking a tactical approach to capital allocation. In terms of repurchase guidance, the Company remains in the market ~~at reduced levels~~ and is being tactical in its approach to repurchasing its stock. The Company believes that this ~~tactical~~ approach will allow it to increase or decrease repurchase activity depending on how the pandemic and market conditions evolve.

The Company is committed to maintaining a strong Aflac Japan solvency margin ~~ration~~ratio (SMR) and Aflac U.S. risk-based capital (RBC) ratios. While the SMR is particularly sensitive to market volatility resulting from widening of credit spreads, both SMR and RBC are sensitive to credit downgrades and defaults. The Company has capital tools available to increase SMR and RBC including the reduction of subsidiary dividends paid to the Parent Company by its insurance subsidiaries and Parent Company capital contributions to insurance subsidiaries sourced through cash on hand, proceeds from debt issuances or by drawing on the revolving credit facilities noted above. For example, the Parent Company ~~plans to make~~made a capital contribution of $150 million to CAIC in ~~approximately the first half of~~ May 2020. The Company also has a committed reinsurance facility in the amount of ~~¥110~~approximately ¥120 billion of reserves that could be deployed to support SMR. ~~For example,~~Additionally, Aflac Japan ~~and Aflac U.S. currently anticipate that~~has to date reduced dividends ~~they provide~~it provides to the Parent Company in 2020 ~~will be reduced~~ by ¥75 billion ~~and $75 million, respectively,~~ compared to initial 2020 plans. Taking into consideration the strong liquidity position of the Parent Company as well as the continuing development of economic conditions in Japan and the U.S., the Company currently plans to defer the payment of further subsidiary dividends to the Parent

Company until the fourth quarter of 2020. Further dividend delays or reductions may be ~~necessary~~undertaken as the Company continues to monitor developments. ~~In its Aflac U.S. segment, the~~The Company intends to maintain the RBC ratio for Aflac in the ~~400%~~525% to 575% range for 2020.

As a result of market volatility, the Company has made tactical adjustments to its foreign currency-hedging program in Aflac Japan to mitigate hedging cost and settlement risk while maintaining a strong SMR. Aflac Japan maintains a collar program on a portion of its US dollar program to mitigate against more extreme moves in foreign exchange rates and therefore support SMR. In the first quarter of 2020, the Company reduced the size of the collar program by approximately $3 billion to $9 billion and marginally widened the collars. While these adjustments will moderately increase the Company's exposure to SMR volatility, the Company believes that they will also reduce its exposure to pricing volatility and the related risk of negative settlements should there be a material weakening in the yen. Depending on further developments, including the possibility of further market volatility, there may be additional costs associated with maintaining the collar program. The Company is evaluating other adjustments, including the possibility of hedging additional U.S dollar-denominated investments. See the Liquidity and Capital Resources section of this MD&A for additional information regarding other potential sources of liquidity and capital resources.

•Investment Portfolio

The Company's investment portfolio iswas well-positioned entering the crisis, and the Company continues to follow its strategy of investing primarily in fixed maturity securities to generate a reliable stream of income. Fundamental credit analysis and de-risking activity in prior periods contributed to the current quality of the Company’s investments. The Company ~~is closely monitoring~~continued with de-risking activity in the ~~impact~~third quarter, reducing positions in the portfolios seen as more vulnerable in the current environment. Although economic and market conditions improved throughout much of the ~~crisis~~quarter, the Company remains cautious about the continued path of the recovery and the potential longer term impacts on ~~its investments~~certain sectors most vulnerable to the impacts of the pandemic. The Company continues seeking ways to improve the health of the portfolio through de-risking and ~~hedging programs, and on markets globally.~~ other repositioning actions. Certain investments have been adversely impacted with credit rating downgrades and increased price volatility, including investments in issuers ~~facing~~that faced an immediate and severe impact such as those in travel and lodging, leisure, non-emergency medical and ~~energy. These investments experienced price declines~~energy sectors. The Company continues working with issuers to provide temporary relief of terms by providing payment deferrals and ~~downgrades in~~other modifications where the ~~quarter. In addition,~~Company believes it improves its overall position. For additional information on these loan modifications, see Note 3 of the Notes to the Consolidated Financial Statements.

Markets have stabilized from the extreme volatility seen at the outset of the crisis, although issuers continue to be affected by reduced business activity and consumer demand. Volatility in oil prices and reduction in global energy demand continue to adversely ~~impacted~~impact issuers in the energy sector. Due to the decline in U.S. interest rates, and limitations on the availability of new investments in certain private asset classes such as middle market loans, commercial mortgages and transitional real estate, net investment income may be adversely impacted over time from lower reinvestment rates for fixed maturity investments and lower interest on floating rate assets. ~~In early 2020, the Company hedged its floating rate~~Net investment income ~~against interest rate declines during 2020. The decline in interest rates~~may not fully reflect activity during the quarter allowed the Company to monetize a portion of its floating rate hedges, which will offset some of the declines in net investment income from floating rate assets that may occur if rates remain low. The impact of the crisis during the quarter may not be fully reflected in net investment income because certain investments, such as private limited partnerships, typically report their results to the Company one to three months following the end of the reporting period. ~~The Company expects that~~Therefore, the increase in net investment income from these investments ~~will decline significantly~~ in the ~~second~~third quarter ~~of 2020 and perhaps into later periods. In this regard, the Company’s investments in private limited partnerships tend to reflect~~reflects to some extent price ~~declines~~increases in publicly traded equities ~~which experienced significant price declines~~during the second quarter. There are a number of factors that impact private limited partnership income, but the Company expects public equity markets to be a favorable driver to this component of net investment income in the ~~first quarter.~~fourth quarter, based on the positive performance of leading equity indices during the third quarter, such as the S&P 500 and Russell 2000. The Company ~~has made~~continues to make tactical adjustments to its investment portfolios in response to the crisis, and continues to assess its investment strategy and asset allocation to identify additional tactical adjustments that may be necessary due to ~~recent market disruption~~the continuing recession.


•	•Crisis Management

The Company has crisis command centers set up in Japan and the U.S. These command centers are ~~in place~~generally utilized for any type of crisis, including natural disasters and cybersecurity events. The command centers participate in regular updates to the Company's leadership regarding Japan and U.S. government and regulatory actions,

operations, employee policies and conditions and distribution status. In addition, capital market, central bank and government stimulus updates are provided, as well as updates on cybersecurity, including with respect to the Company's remote workforce. Moreover, the Company's financial leadership group meets more frequently and has focused on the capital markets, capital and liquidity position, stress testing and any defensive actions that may be necessary as the crisis unfolds.


•	•Aflac Japan initiatives

In February 2020, Aflac Japan began to implement actions such as working from home, staggered work hours, limitations on the number of personnel attending in-person meetings and restrictions on traveling between buildings and floors in Aflac Japan worksites. On April 7, 2020, the Japan government declared a state of emergency in seven prefectures including Tokyo and Osaka and requested that companies in these prefectures reduce the number of employees coming into the office by 70% or more. Accordingly, Aflac Japan ~~has~~ implemented increasing levels of remote working levels for its work force toward the requested level. ~~As of April 14, 2020, Aflac Japan has met the requested reduction in employees coming to the office with over 70% of its employees working from home and over 25% working in the office.~~ On April 16, 2020, the state of emergency was expanded nationwide in Japan, ~~with a stated expiration date~~and on May 25, 2020, the state of ~~May 6, 2020.~~emergency was lifted nationwide. As of September 30, 2020, Aflac Japan has approximately 50% of its workforce working from home. Aflac Japan is evaluating return to the office measures; however, Aflac Japan anticipates that the remote configuration could remain for an indefinite period of time without materially impacting operations.

Aflac Japan has announced several additional actions taken for its employees including travel restrictions and extended paid leave.

Aflac Japan remains focused on generating new business through direct mail made to existing and prospective customers. In addition, Aflac Japan is promoting digital and web-based sales to groups and ~~preparing to introduce~~introduced a new system that enables smartphone-based insurance application by allowing the customer and an Aflac operator to see the same screen through their smartphones. Face-to-face sales ~~will be~~have been challenged and isare having an impact on sales results. During ~~April,~~the third quarter, Aflac Japan experienced a sales decline of ~~an estimated 65%~~32.0% on a yen basis, compared to ~~April~~the third quarter of 2019, due to ~~both the continued effects of the Japan Post investigation and~~ the effects of the pandemic. See the Aflac Japan Segment of this MD&A for additional information regarding sales in the Japan Post channel and the strategic alliance with Japan Post.

Aflac Japan has also followed the guidance of the FSA in terms of treating customers with care, ~~including a six-month grace period on premium payments,~~ ensuring ease and timeliness of claims payments and extended coverage for temporary medical facilities and telemedicine in certain circumstances, and waiver of interest on certain policyholder loans. Aflac Japan initially extended a six-month grace period on premium payments, and in June 2020, the grace period for premiums due through September 30, 2020 was extended to April 30, 2021. Policyholders are required to file for relief through this extension. On April 18, 2020, Aflac Japan announced that it will pay certain accidental death and disability benefits in the event of a death directly caused by COVID-19.

To assist with the COVID-19 pandemic, Aflac Japan has donated ¥500 million to the Japan Medical Associations and to identified municipalities where Aflac Japan has operations.


•	•Aflac U.S. and Corporate and Other initiatives

The Parent Company and Aflac U.S. began to implement Company mandates including restrictions on travel and in-person meetings applicable to U.S. employees beginning in February 2020 and required work from home directives across their U.S. work force in March 2020. As of ~~April 15,~~September 30, 2020, approximately ~~98%~~95% of employees were working remotely, with 100% of employees working remotely in certain areas including New York City, including all investment employees based in the ~~United States.~~U.S. The Company currently anticipates that a return to the worksite for U.S. based employees of the Parent Company and Aflac U.S. will be conducted in phases beginning no sooner than early 2021, subject to factors including the availability of treatments and vaccines, the return schedule of school systems and the availability of child care, the number of COVID–19 cases and the COVID–19 replication rate in areas of the U.S. where the Company has significant operations. However, Aflac U.S. anticipates that the remote configuration could remain for an indefinite period of time without materially impacting operations. The Parent Company and Aflac U.S. ~~are currently maintaining~~continue to maintain employee and worksite safety measures including travel restrictions, building access restrictions and in-person meeting restrictions.

Aflac U.S. ~~recently~~has announced several actions taken for its employees. ~~This included~~These include a commitment to cover the costs of COVID-19 testing and extended paid leave in certain circumstances.

Aflac U.S. is focused on supporting its agency channel, most of whom are small businesses, by offering zero-interest loans and cash stipends in lieu of canceled recognition trips.

Aflac U.S. policy sales, enrollment and agent recruiting functions are highly dependent upon face-to-face interaction between independent agents and brokers with prospective and new customers and agents.

Opportunities for such interaction have been significantly reduced by reactions to the pandemic, such as social distancing, shelter in place orders and work from home initiatives. In addition, licensure of newly recruited agents has been delayed in some states due to the unavailability or difficulty of temporary licenses or online training. Further, despite government stimulus measures, the ~~pandemic’s~~ economic effects

of the pandemic on prospective and existing customers is still largely unknown. Similar to Aflac Japan, the Aflac U.S. sales team is working to adjust its sales approach given the reduction in face-to-face sales. Key elements to this approach include realizing sales at the worksite through an enrollment call center, video enrollment through co-browsing and self-enrollment. The traditional agent sales team is also using virtual recruiting and training through video conferencing in order to maintain or increase the recruiting pipeline. The Aflac U.S. broker sales team is focused on product enhancements due to COVID-19 as well as leveraging technology based solutions to drive ~~enrollment in the second half of 2020.~~enrollment. Finally, Aflac U.S. is in its second year of the build-out of the Consumer Markets business for the digital direct-to-consumer sale of insurance and sales made through that platform have continued to grow.

~~Given the importance of face-to-face interaction,~~Face-to-face sales have been challenged and ~~based~~are having an impact on sales ~~trends during~~results. During the ~~month of April, the Company expects a sharp decline in sales across all~~three- and nine-month periods ended September 30, 2020, Aflac U.S. ~~product lines~~experienced a sales decline of 35.7% and 32.7%, respectively, compared to the same respective periods in 2019, reflecting the impacts of the pandemic. The Aflac U.S. benefit ratio decreased in the three-month period ended September 30, 2020, as compared to the same period in 2019; however, the ratio increased in comparison to the second ~~quarter.~~quarter of 2020, which management believes may indicate the beginning of a return to levels seen over the past several years. The Company ~~has experienced~~expanded a ~~decline~~previously piloted wellness initiative in ~~Aflac U.S. sales~~the third quarter, using digital and direct account engagement to raise awareness among policyholders as to the availability of ~~an estimated 55% compared to April 2019.~~valuable wellness benefits. The Company estimates this effort had approximately $14 million impact on incurred claim in the third quarter.

Aflac U.S. is encouraging policyholders who are displaying COVID-19 symptoms to seek treatment and is paying wellness benefits on applicable policies for COVID-19 tests, when completed claims are submitted. Aflac U.S. is also providing coverage for treatment in temporary facilities and by telemedicine in certain circumstances.

During the first ~~quarter,~~nine months of 2020, Aflac U.S. took steps to comply with COVID-19-related directives issued by state regulatory authorities, including those requiring or requesting premium grace periods. ~~These periods generally range from 30-60 days, but some regulatory authorities have required or requested longer~~As of September 30, 2020, premium grace periods ~~or grace periods that remain~~remained in effect ~~until further notice.~~in 13 states. Although aggregate policy lapses decreased from the prior year, Aflac U.S. ~~anticipates~~experienced an increase in policy lapses in the ~~second and~~ third ~~quarters~~quarter of 2020 asin certain states where premium grace periods ~~begin~~expired and government stimulus measures discussed below were not renewed or initiated. If the premium grace periods continue to ~~expire.~~expire throughout 2020, Aflac U.S. would expect an increase in lapse rates.

~~On April 14,~~In light of the anticipated combined effects of reduced sales and persistency, Aflac U.S. currently expects 2020 earned premium results in the range of flat to a decline of 3% compared with 2019. In September 2020, the Company announced a voluntary separation program for certain U.S. employees. The program provides eligible employees with a severance package, including twelve months of salary, the employee's targeted bonus payout for 2020 and one year of Consolidated Omnibus Budget Reconciliation Act (COBRA) or retiree medical, if eligible. The volunteer period opened on September 15, 2020 and closed October 1, 2020. Employees accepted into this program were notified in October 2020 and the Company expects transitions to be completed by December 31, 2020. The Company expects to take a one-time severance charge related to the program in the fourth quarter of 2020 of approximately $45 million.

To date, the Parent Company ~~announced that it~~ has contributed $5$6 million to ~~two~~ organizations that are providing assistance for health care workers assisting with the COVID-19 pandemic.

~~Emergence of COVID-19 claims~~

The Company’s COVID-19 related claims experience in Aflac Japan and Aflac U.S. has been relatively minor through March 31, 2020. During April, the Company began experiencing an increase in claims and call center volume related to COVID-19 in both Japan and the U.S. In Japan, the medical system is under increasing stress, especially in metropolitan areas, due to the recent increase in infections and may not be sufficient to treat a rapid increase in infection. Patients with minor illnesses are receiving treatment in alternative facilities or at home. The amount and timing of claims experience still remains uncertain and, in the case of Japan, a rapid increase in infection could result in higher death claims. The Company is preparing for the potential of a high stress claims scenario to emerge as early as the second and third quarters of 2020.

•Major government initiatives

Government authorities in Japan and the U.S. have implemented several initiatives in response to the COVID-19 pandemic, including actions designed to mitigate the adverse health effects of the virus and those designed to provide broad-based relief and economic support to all aspects of the economy. Given that these measures were recently implemented, it is too early to determine what impacts these initiatives will have on the Company’s business, results of operations, financial condition, liquidity, capital position, investment portfolio, workforce, distribution partners and vendors.

On April 7, 2020, Prime Minister Abe issued a state of emergency declaration targeting seven prefectures based on the revised Act on Special Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Response. On April 16, 2020, the state of emergency was expanded to all 47 ~~prefectures, with 13 prefectures designated as “special alert prefectures” that must place intensive focus on preventing the spread of COVID-19.~~prefectures. The state of emergency ~~is currently scheduled to remain~~was lifted in ~~effect until~~phases, with 39 prefectures released on May ~~6, 2020.~~

~~Under~~14, 2020, three additional prefectures released on May 21, and the state of emergency ~~governors can request that residents refrain from non-essential~~lifted nationwide on May 25. On June 19, 2020, restrictions on intraprefecture travel were lifted. Japanese Prime Minister Shinzo Abe announced his retirement on August 28, 2020. Chief

Cabinet Secretary Yoshihide Suga was elected Liberal Democratic Party President on September 14, 2020 and ~~non-urgent outings except those necessary~~elected Prime Minister on September 16, 2020. Prime Minister Suga has indicated his intention to ~~sustain daily life, and that business operators restrict customers’ use~~further Abe's policies, including efforts to counter the effects of ~~shops and facilities. However, enforceability is limited and Japan is therefore not considered to be in a “lockdown” situation.~~COVID-19.

Upon issuance of the state of emergency declaration, governors of Tokyo and other prefectures requested that residents refrain from going outside and make an effort to minimize commutes through measures such

as teleworking and staggered work hours. Some companies (e.g., recreational facilities) have been asked to suspend business, while others have been requested to maintain operations (e.g., those related to maintaining medical care, social stability, and securing stable living for citizens). Financial services are included in the businesses that the Tokyo governor and other local authorities have requested to remain in operation. The state of emergency in Japan summarized above are subject to continuing extensions and modifications to the list of essential or other activities that are permitted during the order.

The Financial Services Agency (FSA) has also requested that financial service providers respond appropriately while continuing their essential operations. This request includes insurance companies, which have been asked to continue essential operations such as benefits and claims payment, including policyholder loans. Moreover, following the expansion of the impact of COVID-19, the FSA requested insurance companies to consider flexible interpretation and application of insurance policy provisions and measures required for products from the standpoint of protecting policyholders. In accordance with the FSA’s request, Aflac Life Insurance Japan Ltd. implemented a measure to pay accidental death benefits and accidental serious disability benefits under its accidental death benefit rider, etc. in cases of death or specified serious disabilities from COVID-19.

On April 20, 2020, the Cabinet of Japan approved ¥117 trillion or more than 20% of GDP in emergency stimulus measures, including various tax measures to address the financial difficulties that businesses are facing. The stimulus package includes measures decided earlier in February and March as emergency COVID-19 response and the “Comprehensive Economic Measures to Create a Future with Security and Growth” formulated in December 2019. The package is divided into measures covering two stages of the COVID-19 outbreak: the “emergency support phase,” and the “V-shaped recovery phase.” The emergency support phase is described as covering until a noticeable slowdown in the spread of COVID-19 and provides cash benefits of ¥100 thousand per person to Japanese citizens and other measures that focus on improvements to the medical service system. The ~~V-shaped~~"V-shaped recovery ~~phase~~phase" focuses on a campaign to boost demand after the pandemic abates, as well as to reinforce Japan’s economic foundations through measures such as supply-chain reforms and promotion of telework.

On May 27, 2020, the Cabinet of Japan approved a second ¥117 trillion stimulus package. The Diet passed a supplementary budget to fund the package on June 12, 2020. The second stimulus package is intended to help small and mid-sized businesses fund leave allowances for furloughed workers and provides rent assistance for business operations.

In the U.S., statewide shelter in place or stay at home orders ~~are currently~~have been lifted although reopening plans have been paused or reversed in ~~effect across the majority of~~certain states ~~with a small number of states adopting partial shelter~~experiencing an increase in place orders or other statewide social distancing restrictions. The governors of the states of Georgia, New York and South Carolina, where the Company’s primary U.S. operations are located, issued statewide shelter in place orders on April 2, March 20 and April 6, 2020, respectively. The state of emergency in Japan and states orders summarized above are subject to continuing extensions and modifications to the list of essential or other activities that are permitted during the order. While a few states, including Georgia, have started to relax shelter in place orders, the impact of these initiatives, including their sustainability is uncertain.cases.

The ~~United States~~U.S. government ~~is taking~~took action in response to the COVID-19 pandemic by providing broad-based relief and economic support to all aspects of the economy.

The Families First Coronavirus Response Act was signed into law on March 18, 2020 with the goal of mitigating the financial impact of the COVID-19 on states, territories, the uninsured, the unemployed, workers and individuals who rely on food assistance, such as children and low-income seniors.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, was signed into law on March 7, 2020 and iswas designed to provide approximately $2 trillion in financial stimulus in the form of financial aid to individuals, businesses, nonprofits, states, and municipalities. Among other measures, the CARES Act ~~provides~~provided for $260 billion in expanded unemployment benefits and $290 billion of direct payments to individuals, and ~~it establishes~~established a $349 billion Paycheck Protection Program (PPP) providing for loans to small businesses, nonprofits, and veteran’s organizations with 500 or fewer employees. Under the PPP, loan funds are forgivable under certain circumstances and may be used to cover payroll (which includes sick and medical leave, health care benefits, and retirement benefits) insurance payments, mortgage payments and other debt obligations. To be eligible for loan forgiveness an employer must maintain an average monthly number of full-time employees during the covered period. The funds appropriated to the PPP were stated to be available through June 30, 2020, but as of April 16, 2020, the appropriated funds were expended based on applications received to date. The CARES Act also authorizes $500 billion for the Secretary of the Treasury to make direct loans, loan guarantees, and investments in support of eligible businesses, states and municipalities including certain impacted industries

such as passenger air carriers, air cargo carriers and related businesses. The legislation includes a five-year net operating loss (NOL) carryback, payroll tax relief and other significant provisions for businesses.

~~The Paycheck Protection Program and Health Care Enhancement Act (Act) was signed into law on~~On April 24, 2020, ~~and is designed to provide approximately $484 billion in additional stimulus, including~~ an additional ~~$321~~$320 billion ~~for~~was allocated to the PPP, including $10 billion for administrative costs and $60 billion allocated to small lenders and community ~~banks. In addition~~banks, and on July 4, 2020, the application deadline for the PPP was extended from June 30, 2020 to August 8, 2020. The CARES Act also included a five-year net operating loss (NOL) carryback, payroll tax relief and other significant provisions for businesses. Section 4013 of the CARES Act gives entities temporary relief from the accounting and disclosure requirements for troubled debt restructurings (TDRs) under ASC 310-40 in certain situations. On April 7, 2020, certain regulatory banking agencies, in consultation with the Financial Accounting Standards Board (FASB), issued the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Interagency statement) applicable for all entities, which offers practical expedients for evaluating whether loan modifications in response to the ~~PPP funds,~~COVID-19 pandemic are treated as TDRs. The Company has applied GAAP relief under Section 4013 of the CARES Act ~~also includes $75 billion in aid~~and the Interagency statement with respect to certain qualifying loan modifications. See Notes 1 and 3 of Notes to the Consolidated Financial Statements for ~~hospitals and other health care providers, $60 billion for disaster loans and programs, and $25 billion to enhance COVID-19 testing capabilities.~~additional details.

The Federal Reserve has also taken various actions in an effort to support the economy and markets in response to heightened volatility and uncertainty. These actions include reducing by 1.5% each the rate that it charges for direct loans to banks, as well as the target for the rate banks charge each other for overnight funds (federal funds rate); initiating quantitative easing with no stated cap on purchases; committing to purchase U.S. Treasury securities, agency mortgage-backed and agency commercial mortgaged-backed securities; re-establishing the Term Asset-Backed Securities Loan Facility (TALF) originally launched in 2009, through which it will lend to holders of AA-rated asset-backed securities; and establishing facilities to support purchase of corporate bonds from large investment-grade companies.

Performance Highlights

Total revenues were ~~$5.2~~$5.7 billion ~~during~~in the ~~first~~third quarter of 2020, compared with ~~$5.7~~$5.5 billion in the ~~first~~third quarter of 2019. Net earnings were ~~$566~~$2.5 billion, or $3.44 per diluted share in the third quarter of 2020, compared with $777 million, or ~~$.78~~$1.04 per diluted share, in the third quarter of 2019. The increase in net earnings and net earnings per diluted share in the third quarter of 2020 reflects a $1.4 billion benefit primarily from the release of valuation allowances on deferred foreign tax credits, which were allowed due to newly released U.S. tax regulations.

Total revenues were $16.2 billion in the first nine months of 2020, compared with $16.7 billion in the first nine months of 2019. Net earnings were $3.8 billion, or $5.31 per diluted share in the first ~~quarter~~nine months of 2020, compared with ~~$928 million,~~$2.5 billion, or ~~$1.23~~$3.37 per diluted share, in the first ~~quarter~~nine months of 2019. The ~~declines~~decline in total revenues ~~and net earnings~~ in the first ~~quarter~~nine months of 2020 ~~were both~~was driven primarily by an increase in net investment losses. The increase in net earnings and net earnings per diluted share in 2020 reflects a $1.4 billion benefit primarily from the release of valuation allowances on deferred foreign tax credits, which were allowed due to newly released U.S. tax regulations.

Results in the ~~first~~third quarter of 2020 included pretax net investment ~~losses~~gains of ~~$463~~$108 million, compared with net investment ~~gains~~losses of ~~$71~~$153 million in the ~~first~~third quarter of 2019. Net investment ~~losses~~gains in the ~~first~~third quarter of 2020 included ~~$145~~$142 million of gains, reflecting a decline in the allowances associated the Company's estimate of current expected credit ~~losses; $162~~losses (CECL); $48 million of net losses from certain derivative and foreign currency gains or losses; ~~$149~~$12 million of net gains on equity securities; and $2 million of net gains from sales and redemptions.

Results in the first nine months of 2020 included pretax net investment losses of $525 million, compared with net investment losses of $147 million in the first nine months of 2019. Net investment losses in the first nine months of 2020 included $179 million of credit losses primarily driven by increases in CECL allowances; $183 million of net losses from certain derivative and foreign currency gains or losses; $106 million of net losses on equity securities; and $7$57 million of net losses from sales and redemptions.

The average yen/dollar exchange rate⁽¹⁾ for the three-month period ended ~~March 31,~~September 30, 2020 was ~~108.84,~~106.23, or ~~1.3%~~1.0% stronger than the average yen/dollar exchange rate of ~~110.24~~107.31 for the same period in 2019. The average yen/dollar exchange rate(1) for the nine-month period ended September 30, 2020 was 107.63, or 1.4% stronger than the average yen/dollar exchange rate of 109.16 for the same period in 2019.

Adjusted earnings⁽²⁾ in the ~~first~~third quarter of 2020 were ~~$882~~$994 million, or ~~$1.21~~$1.39 per diluted share, compared with ~~$849~~$863 million, or ~~$1.12~~$1.16 per diluted share, in the third quarter of 2019, reflecting an increase of 15.2%, driven primarily by favorable effective tax rates. This increase includes a cumulative adjustment of $202 million, or $0.28 per share, with respect to the first nine months of 2020, of which $69 million, or $0.10 per share, related to the third quarter of 2020. The slightly stronger yen/dollar exchange rate did not have a significant impact on adjusted earnings per diluted share. Adjusted earnings(2) in the first nine months of 2020 were $2.8 billion, or $3.88 per diluted share, compared with $2.6 billion, or $3.41 per diluted share, in the first ~~quarter~~nine months of 2019. The stronger yen/dollar exchange rate impacted adjusted earnings per diluted share by ~~$.01.~~$.02.

Total investments and cash at the end of ~~March~~September 2020 were ~~$137.0~~$146.1 billion, compared with ~~$131.4~~$139.5 billion at ~~March 31,~~September 30, 2019. In the first ~~quarter~~nine months of 2020, Aflac Incorporated repurchased ~~$449 million,~~$1.0 billion, or ~~10.0~~26.1 million of its common shares. At the end of ~~March,~~September 2020, the Company had ~~27.1~~110.9 million remaining shares authorized for repurchase.

Shareholders’ equity was ~~$26.4~~$32.5 billion, or ~~$36.75~~$46.16 per share, at ~~March 31,~~September 30, 2020, compared with ~~$26.0~~$29.4 billion, or ~~$34.90~~$40.04 per share, at ~~March 31,~~September 30, 2019. Shareholders’ equity at ~~March 31,~~September 30, 2020 included a net unrealized gain on investment securities and derivatives of ~~$6.0~~$9.5 billion, compared with a net unrealized gain of ~~$6.5~~$8.9 billion at ~~March 31,~~September 30, 2019. Shareholders’ equity at ~~March 31,~~September 30, 2020 also included an unrealized foreign currency translation loss of ~~$1.5~~$1.3 billion, compared with an unrealized foreign currency translation loss of ~~$1.8~~$1.5 billion at ~~March 31,~~September 30, 2019. The

annualized return on average shareholders’ equity in the ~~first~~third quarter of 2020 was ~~8.2%.~~31.7%, driven primarily by a benefit from new tax regulations.

Shareholders’ equity excluding accumulated other comprehensive income (AOCI)⁽²⁾ (adjusted book value) was $24.6 billion, or $34.91 per share at September 30, 2020, compared with $22.2 billion, or ~~$30.92~~$30.18 per share, at ~~March 31, 2020, compared with $21.6 billion, or $28.89 per share, at March 31,~~September 30, 2019. The annualized adjusted return on equity excluding foreign currencyimpact⁽²⁾ in the ~~first~~third quarter of 2020 was ~~15.7%~~16.8%.

⁽¹⁾ Yen/U.S. dollar exchange rates are based on the published MUFG Bank, Ltd. telegraphic transfer middle rate (TTM).

⁽²⁾See the Results of Operations section of this MD&A for a definition of this non-U.S. GAAP financial measure.

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. Profitability for the Company depends principally on its ability to price its insurance products at a level that enables the Company to earn a margin over the costs associated with providing benefits and administering those products. Profitability also depends on, among other items, actuarial and policyholder behavior experience on insurance products, and the Company's ability to attract and retain customer assets, generate and maintain favorable investment results, effectively deploy capital and utilize tax capacity, and manage expenses.

Yen–denominated income statement accounts are translated to U.S. dollars using a weighted average Japanese yen/U.S. dollar foreign exchange rate, except realized gains and losses on security transactions which are translated at the exchange rate on the trade date of each transaction. Yen–denominated balance sheet accounts are translated to U.S. dollars using a spot Japanese yen/U.S. dollar foreign exchange rate.

The following discussion includes references to the Company's performance measures, adjusted earnings, adjusted earnings per diluted share, and amortized hedge costs/income, which are not calculated in accordance with U.S. generally accepted accounting principles (GAAP) (non-U.S. GAAP). These measures exclude items that the Company believes may obscure the underlying fundamentals and trends in the Company's insurance operations because they tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with its insurance operations. The Company's management uses adjusted earnings and adjusted earnings per diluted share to evaluate the financial performance of its insurance operations on a consolidated basis, and the Company believes that a presentation of these measures is vitally important to an understanding of its underlying profitability drivers and trends of its insurance business. The Company believes that amortized hedge costs/income, which are a component of adjusted earnings, measure the periodic currency risk management costs/income related to hedging certain foreign currency exchange risks and are an important component of net investment income.

The Company defines the non-U.S. GAAP financial measures included in this filing as follows:

•Adjusted earnings are the profits derived from operations. The most comparable U.S. GAAP measure is net 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 total revenues excluding net investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the Company’s insurance operations and that do not reflect the Company's underlying business performance.

•Adjusted earnings per share (basic or diluted) are adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The most comparable U.S. GAAP measure is net earnings per share.

•Amortized hedge costs/income represent costs/income incurred or recognized as a result of using foreign currency-derivatives to hedge certain foreign exchange risks in the Company's Japan segment or in the Corporate and Other segment. These amortized hedge costs/income are estimated at the inception of the derivatives based on the specific terms of each contract and are recognized on a straight line basis over the term of the hedge. There is no comparable U.S. GAAP financial measure for amortized hedge costs/income.

•Adjusted earnings excluding current period foreign currency impact are computed using the average foreign currency exchange rate for the comparable prior-year period, which eliminates fluctuations driven solely by foreign currency exchange rate changes. The most comparable U.S. GAAP measure is net earnings.

•Adjusted earnings per diluted share excluding current period foreign currency impact are adjusted earnings excluding current period foreign currency impact divided by the weighted average outstanding diluted shares for the period presented. The most comparable U.S. GAAP measure is net earnings per share.

•U.S. dollar-denominated investment income excluding foreign currency impact is determined using the average foreign currency exchange rate for the comparable prior year period.

•Adjusted book value is the U.S. GAAP book value (representing total shareholders' equity), less AOCI as recorded on the U.S. GAAP balance sheet. The Company considers adjusted book value important as it excludes AOCI, which fluctuates due to market movements that are outside management's control.

•Adjusted return on equity (ROE) excluding foreign currency impact is calculated using adjusted earnings excluding current period foreign currency impact divided by average shareholders’ equity, excluding AOCI. The most comparable U.S. GAAP financial measure is return on average equity as determined using net earnings and average total shareholders’ equity.

The following table is a reconciliation of items impacting adjusted earnings and adjusted earnings per diluted share to the most directly comparable U.S. GAAP measures of net earnings and net earnings per diluted share, respectively.

Reconciliation of Net Earnings to Adjusted Earnings⁽¹⁾

In Millions Per Diluted Share
Three Months Ended March 31,
2020 2019 2020 2019
Net earnings $ 566
$ 928
$ .78
$ 1.23

Items impacting net earnings:
Net investment (gains) losses ^{(2),(3),(4),(5)}
448
(103 ) .62
(.14 )
Other and non-recurring (income) loss 15
0
.02
.00

Income tax (benefit) expense on items excluded from adjusted earnings (146 ) 23
(.20 ) .03

Adjusted earnings 882
849
1.21
1.12

Current period foreign currency impact ⁽⁶⁾
(9 ) N/A
(.01 ) N/A

Adjusted earnings excluding current period foreign currency impact $ 873
$ 849
$ 1.20
$ 1.12


	In Millions				Per Diluted Share				In Millions				Per Diluted Share
	Three Months Ended September 30,								Nine Months Ended September 30,
	2020		2019		2020		2019		2020		2019		2020		2019
Net earnings	$	2,456	$	777	$	3.44	$	1.04	$	3,826	$	2,523	$	5.31	$	3.37
Items impacting net earnings:
Net investment (gains) losses (2),(3),(4),(5)	(117)		119		(.16)		.16		497		49		.69		.07
Other and non-recurring (income) loss	1		0		.00		.00		16		1		.02		.00
Income tax (benefit) expense on items excluded from adjusted earnings	72		(33)		.10		(.04)		(125)		(15)		(.17)		(.02)
Tax valuation allowance release (6)	(1,418)		0		(1.99)		.00		(1,418)		0		(1.97)		.00
Adjusted earnings	994		863		1.39		1.16		2,797		2,558		3.88		3.41
Current period foreign currency impact (7)	(3)		N/A		.00		N/A		(17)		N/A		(.02)		N/A
Adjusted earnings excluding current period foreign currency impact	$	991	$	863	$	1.39	$	1.16	$	2,780	$	2,558	$	3.86	$	3.41

⁽¹⁾ Amounts may not foot due to rounding.

⁽²⁾Amortized hedge costs of ~~$55~~$51 and ~~$62~~$66 for the three-month periods and $155 and $191 for the nine-month periods ended ~~March 31,~~September 30, 2020, and 2019, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and included in adjusted earnings as a decrease to net investment income. See "Hedge Costs/Income" discussion below for further information.

⁽³⁾ Amortized hedge income of ~~$29~~$22 and ~~$20~~$21 for the three-month periods and $78 and $61 for the nine-month periods ended ~~March 31,~~September 30, 2020 and 2019, respectively, related to certain foreign currency exposure management strategies have been reclassified from net investment gains (losses) and included in adjusted earnings as an increase to net investment income. See "Hedge Costs/Income" discussion below for further information.

⁽⁴⁾ Net interest cash flows from derivatives associated with certain investment strategies of ~~$(6)~~$7 and ~~$(7)~~$(4) for the three-month periods and $7 and $(18) for the nine-month periods ended ~~March 31,~~September 30, 2020 and 2019, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

⁽⁵⁾ A gain of ~~$16~~$13 and ~~$17~~$16 for the three-month periods and $43 and $50 for the nine-month periods ended ~~March 31,~~September 30, 2020 and 2019, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of interest expense.

⁽⁶⁾ One-time tax benefit recognized in the third quarter of 2020 representing the release of valuation allowances on deferred foreign tax credits due to new tax regulations.

(7) Prior period foreign currency impact reflected as “N/A” to isolate change for current period only.

Reconciling Items

Net Investment Gains and Losses

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 growth and profitability. This investment strategy incorporates asset-liability matching (ALM) to align the expected cash flows of the portfolio to the needs of the Company's liability structure. The Company does not purchase securities with the intent of generating investment gains or losses. However, investment gains and losses may be realized as a result of changes in the financial markets and the creditworthiness of specific issuers, tax planning strategies, and/or general portfolio management and rebalancing. The realization of investment gains and losses is independent of the underwriting and administration of the Company's insurance products. Net investment gains and losses include securities transactions, credit losses, derivative and foreign currency activities and changes in fair value of equity securities.

Securities Transactions, Credit Losses and Gains (Losses) on Equity Securities

Securities transactions include gains and losses from sales and redemptions of investments where the amount received is different from the amortized cost of the investment. Prior to January 1, 2020, impairments include other-than-temporary-impairment losses on investment securities as well as changes in loan loss reserves for loan receivables. Effective January 1, 2020, credit losses include losses for held-to-maturity fixed maturity securities, available-for-sale fixed maturity securities, loan receivables, loan commitments and reinsurance recoverables.

Certain Derivative and Foreign Currency Gains (Losses)

The Company's derivative activities include:

•foreign currency forwards and options used in hedging foreign exchange risk on ~~certain fixed maturity securities~~U.S. dollar-denominated investments in Aflac Japan's portfolio

•foreign currency forwards and options ~~that~~used to economically hedge certain portions of forecasted cash flows denominated in yen and hedge the Company's ~~long-term~~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 ~~credit defaults swaps held~~investments in ~~consolidated variable interest~~special-purpose entities, ~~(VIEs)~~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 ~~changes~~fluctuations for certain U.S. dollar-denominated available-for-sale fixed-maturity securities.

•bond purchase commitments at the inception of investments in consolidated VIEs

Gains and losses are recognized as a result of valuing these derivatives, net of the effects of hedge accounting. The Company also excludes from adjusted earnings the accounting impacts of remeasurement associated with changes in the foreign currency exchange rate. Amortized hedge costs/ income related to certain foreign currency exposure management strategies (see Amortized Hedge Cost/Income section below), and net interest cash flows from derivatives associated with certain investment strategies and notes payable are reclassified from net investment gains (losses) and included in adjusted earnings.

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 and income have fluctuated in recent periods due to changes in the previously mentioned factors. For additional information regarding foreign currency hedging, refer to Hedging Activities in the Investments section of this MD&A.

For additional information regarding net investment gains and losses, including details of reported amounts for the periods presented, see Notes 3 and 4 of the Notes to the Consolidated Financial Statements.

Other and Non-recurring Items

The U.S. insurance industry has a policyholder protection system that provides funds for the policyholders of insolvent insurers. The system can result in periodic charges to the Company as a result of insolvencies/bankruptcies that occur with other companies in the life insurance industry. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. These charges neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance, but result from external situations not controlled by the Company. The Company excludes any charges associated with U.S. guaranty fund assessments and the corresponding tax benefit or expense from adjusted earnings.

In Japan, the government also requires the insurance industry to contribute to a policyholder protection corporation that provides funds for the policyholders of insolvent insurers; however, these costs are calculated and administered differently than in the U.S. In Japan, these costs are not directly related to specific insolvencies or bankruptcies, but are rather a

regular operational cost for an insurance company. Based on this structure, the Company does not remove the Japan policyholder protection expenses from adjusted earnings.

Income Taxes

The Company's combined U.S. and Japanese effective income tax rate on pretax earnings was ~~21.4%~~(112.9)% for the three-month period ended ~~March 31,~~September 30, 2020, compared with ~~25.3%~~25.0% for the same period in 2019. ~~This~~The Company's combined U.S. and Japanese effective income tax rate on pretax earnings was (30.0)% for the nine-month period ended September 30, 2020, compared with 25.5% for the same period in 2019. In 2020, the combined effective tax rate differs from the U.S. statutory rate primarily due to the release of certain valuation allowances established on the Company's deferred foreign ~~earnings taxed at different rates.~~tax credit benefits. The release of these valuation allowances was a result of the issuance of Final and Proposed Regulations issued by the U.S. Treasury and Internal Revenue Service on September 29, 2020, and resulted in a one-time income tax benefit of $1.4 billion in the third quarter of 2020. For ~~further~~additional information, see Note 9 of the accompanying Notes to the Consolidated Financial Statements and the Critical Accounting Estimates - Income Taxes section of the MD&A in the 2019 Annual Report.

The Company expects that its 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 risk factor entitled "Tax rates applicable to the Company may change" in the 2019 Annual Report for more 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. Aflac Japan purchases yen-denominated assets and U.S. dollar-denominated assets, which may be hedged to yen, to support yen-denominated policy liabilities. These and other yen-denominated financial statement items are, however, translated into dollars for financial reporting purposes. The Company translates Aflac Japan’s yen-denominated income statement into dollars using the average exchange rate for the reporting period, and the Company translates its yen-denominated balance sheet using the exchange rate at the end of the period.

Due to the size of Aflac Japan, whose functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on the Company's reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. Management evaluates the Company's financial performance both including and excluding the impact of foreign currency translation to monitor, respectively, cumulative currency impacts on book value and the currency-neutral operating performance over time.

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. Furthermore, the Company is required to report a measure of segment profit or loss, certain revenue and expense items, and segment assets. Aflac's insurance business consists of two segments: Aflac Japan and Aflac U.S. Aflac Japan is the principal contributor to consolidated earnings. Businesses that are not individually reportable, such as the Parent Company, and asset management subsidiaries and other business activities, including reinsurance retrocession activities, are included in the Corporate and other segment. See the Item 1. Business section of the 2019 Annual Report for a summary of each segment's products and distribution channels.

During the ~~first~~third quarter, Aflac Japan sales for protection-type first sector and third sector products decreased ~~25.8%~~32.8% and total sales decreased ~~25.4%,~~32.0% on a yen basis, compared to the same period in 2019, primarily due to continued ~~effects from the Japan Post investigation, and secondarily to the~~ effects of the COVID-19 pandemic. Sales from Aflac U.S. were down ~~5.2%~~35.7% in the third quarter of 2020, compared to the same period in 2019, due to social distancing efforts, which eliminated face-to-face sales opportunities beginning in mid-March 2020. During April, Aflac Japan experienced a sales decline of an estimated 65% compared to the same period in 2019, due to both the continued effects of the Japan Post investigation and the effects of the pandemic. Aflac U.S. sales declined by an estimated 55% in April compared to April 2019, due to the pandemic. While theThe respective Aflac Japan and Aflac U.S. platforms and distribution partners ~~are working~~continue to work to adapt to the new ~~environment, the Company believes that these results indicate a trend of depressed sales at least until COVID-19 restrictions subside.~~environment. The Company continues to monitor the effects of COVID-19 on its operating results and has taken several steps to mobilize its resources to ensure adequate liquidity, a strong capital position, business continuity and employee safety during this pandemic. See the Executive Summary subsection of this MD&A for additional information.

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. Additional performance measures used to evaluate the financial condition and performance of the Company's segments are listed below.

•operating ratios

•expense ratio

•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 II. Other Information. 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. The following table presents a summary of operating results for Aflac Japan.

Aflac Japan Summary of Operating Results


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2020		2019		2020		2019
Net premium income	$	3,168	$	3,241	$	9,476	$	9,593
Net investment income: (1)
Yen-denominated investment income	331		357		972		986
U.S. dollar-denominated investment income	383		368		1,122		1,083
Net investment income	714		725		2,094		2,069
Amortized hedge costs related to certain foreign currency exposure management strategies	51		66		155		191
Adjusted net investment income	663		659		1,939		1,878
Other income (loss)	11		12		32		34
Total adjusted revenues	3,842		3,912		11,447		11,505
Benefits and claims, net	2,259		2,268		6,651		6,652
Adjusted expenses:
Amortization of deferred policy acquisition costs	151		179		479		538
Insurance commissions	185		185		553		546
Insurance and other expenses	500		442		1,323		1,265
Total adjusted expenses	835		806		2,355		2,349
Total benefits and adjusted expenses	3,094		3,074		9,006		9,001
Pretax adjusted earnings	$	747	$	838	$	2,442	$	2,504
Weighted-average yen/dollar exchange rate	106.23		107.31		107.63		109.16

Three Months Ended
March 31,
(In millions) 2020 2019
Net premium income $ 3,150
$ 3,180

Net investment income: ⁽¹⁾

Yen-denominated investment income 322
317

U.S. dollar-denominated investment income 375
355

Net investment income 697
672

Amortized hedge costs related to certain foreign currency exposure management strategies 55
62

Adjusted net investment income 642
610

Other income (loss) 11
12

Total adjusted revenues 3,803
3,802

Benefits and claims, net 2,186
2,199

Adjusted expenses:
Amortization of deferred policy acquisition costs 173
182

Insurance commissions 185
182

Insurance and other expenses 404
405

Total adjusted expenses 762
769

Total benefits and adjusted expenses 2,948
2,968

Pretax adjusted earnings $ 855
$ 834

Weighted-average yen/dollar exchange rate 108.84
110.24


	In Dollars				In Yen					In Dollars								In Yen
Percentage change over previous period:	Three Months Ended March 31,				Three Months Ended March 31,				Percentage change over previous period:	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019			2020		2019		2020		2019		2020		2019		2020		2019
Net premium income	(.9	)%	(2.5	)%	(2.1	)%	(.8	)%	Net premium income	(2.3)	%	2.6	%	(1.2)	%	(.6)	%	(3.3)	%	(1.2)	%	(2.6)	%	(1.0)	%
Adjusted net investment income	5.2		3.7		4.0		5.4		Adjusted net investment income	.6		8.7		3.2		4.3		(.2)		4.0		1.9		3.4
Total adjusted revenues	.0		(1.6	)	(1.1	)	.1		Total adjusted revenues	(1.8)		3.6		(.5)		.2		(2.8)		(.3)		(1.9)		(.3)
Pretax adjusted earnings	2.5		2.0		1.2		3.9		Pretax adjusted earnings	(10.9)		10.8		(2.5)		3.9		(11.6)		6.1		(3.8)		3.2

⁽¹⁾Net interest cash flows from derivatives associated with certain investment strategies of ~~$(6)~~$6 and ~~$(7)~~$(4) for the three-month periods and $5 and $(18) for the nine-month periods ended ~~March 31,~~September 30, 2020 and 2019, respectively, have been reclassified from net investment gains (losses) and included in adjusted earnings as a component of net investment income.

In the ~~three-month period~~three- and nine-month periods ended ~~March 31,~~September 30, 2020, Aflac Japan's net premium income decreased, in yen terms, primarily due to an anticipated decrease in first sector premiums as savings products reached premium paid-up status. Adjusted net investment income increased in the nine-month period ended September 30, 2020, primarily due to ~~increased~~higher income from U.S. ~~dollar-denominated investments.~~dollar denominated assets and lower hedge costs.

Annualized premiums in force decreased ~~2.8%~~.5% to ~~¥1.47~~¥1.44 trillion as of ~~March 31,~~September 30, 2020, compared with ~~¥1.52~~¥1.50 trillion as of ~~March 31,~~September 30, 2019. The decrease in annualized premiums in force in yen was driven primarily by limited-pay products reaching paid up status. Annualized premiums in force, translated into dollars at respective period-end exchange rates, were ~~$13.5~~$13.6 billion at ~~March 31,~~September 30, 2020, compared with ~~$13.7~~$13.9 billion a year ago.

Aflac Japan's investment portfolios include U.S. dollar-denominated securities and reverse-dual currency securities (yen-denominated debt securities with dollar coupon payments). In years when the yen strengthens in relation to the dollar,

translating Aflac Japan's U.S. dollar-denominated investment income into yen lowers growth rates for net investment income, total adjusted revenues, and pretax adjusted earnings in yen terms. In years when the yen weakens, translating U.S. ~~dollar-~~

~~denominated~~dollar-denominated investment income into yen magnifies growth rates for net investment income, total adjusted revenues, and pretax adjusted earnings in yen terms.

The following table illustrates the effect of translating Aflac Japan’s U.S. dollar-denominated investment income and related items into yen by comparing certain segment results with those that would have been reported had foreign currency exchange rates remained unchanged from the comparable period in the prior year. Amounts excluding foreign currency impact on U.S. dollar denominated investment income were determined using the average foreign currency exchange rate for the comparable prior year period. See non-U.S. GAAP financial measures defined above.

Aflac Japan Percentage Changes Over Previous Period

(Yen Operating Results)

For the Periods Ended ~~March 31,~~September 30,


	Including Foreign Currency Changes					Excluding Foreign Currency Changes					Including Foreign Currency Changes								Excluding Foreign Currency Changes
	Three Months					Three Months					Three Months				Nine Months				Three Months				Nine Months
	2020			2019		2020		2019			2020		2019		2020		2019		2020		2019		2020	2019
Adjusted net investment income	4.0		%	5.4	%	4.8		4.2	%	Adjusted net investment income	(.2)	%	4.0	%	1.9	%	3.4	%	.4	%	6.1	%	2.8	3.6	%
Total adjusted revenues	(1.1	)		.1		(1.0	)	.0		Total adjusted revenues	(2.8)		(.3)		(1.9)		(.3)		(2.7)		.0		(1.8)	(.2)
Pretax adjusted earnings	1.2			3.9		1.7		3.1		Pretax adjusted earnings	(11.6)		6.1		(3.8)		3.2		(11.1)		7.8		(3.2)	3.4


~~Item 6.~~	~~Exhibits~~



(a)			EXHIBIT INDEX
			3.0		-	Articles of Incorporation, as amended – incorporated by reference from Form 10-Q for June 30, 2008, Exhibit 3.0.
			3.1		-	Bylaws of the Corporation, as amended and restated – incorporated by reference from Form 8-K dated April 6, 2020, Exhibit 3.1.
			4.0		-	There are no instruments with respect to long-term debt not being registered in which the total amount of securities authorized exceeds 10% of the total assets of Aflac Incorporated and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any long-term debt instrument to the Securities and Exchange Commission upon request.
			~~4.1~~		-	Twenty-Third Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.300% Senior Note due 2025) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.1.
			~~4.2~~		-	Twenty-Fourth Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.550% Senior Note due 2030) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.2.
			~~4.3~~		-	Twenty-Fifth Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.750% Senior Note due 2032) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.3.
			~~4.4~~		-	Twenty-Sixth Supplemental Indenture, dated as of March 12, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 0.830% Senior Note due 2035) – incorporated by reference from Form 8-K dated March 12, 2020, Exhibit 4.4.
			~~4.5~~		-	Twenty-Seventh Supplemental Indenture, dated as of April 1, 2020, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 3.60% Senior Note due 2030) – incorporated by reference from Form 8-K dated April 1, 2020, Exhibit 4.1.



























































			~~10.1~~31.1*		-	~~Aflac Japan Officer Agreement with Masatoshi Koide, effective January 1, 2020.~~
	~~10.2~~	-		~~Agency Services Agreement, dated March 1, 2008, by and between Japan Post Network Co., Ltd. and Aflac.~~
	~~10.3~~**	-		~~Amendment Agreement to Agency Services Agreement, dated June 27, 2016, by and between Japan Post Co., Ltd. and Aflac.~~
	~~31.1~~	-		Certification of CEO dated ~~April 30,~~October 29, 2020, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
			31.2		-	Certification of CFO dated ~~April 30,~~October 29, 2020, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
			32		-	Certification of CEO and CFO dated ~~April 30,~~October 29, 2020, pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			101.INS		-	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
			101.SCH		-	Inline XBRL Taxonomy Extension Schema.
			101.CAL		-	Inline XBRL Taxonomy Extension Calculation Linkbase.
			101.DEF		-	Inline XBRL Taxonomy Extension Definition Linkbase.
			101.LAB		-	Inline XBRL Taxonomy Extension Label Linkbase.
			101.PRE		-	Inline XBRL Taxonomy Extension Presentation Linkbase.
			104		-	Cover Page Interactive Data File - formatted as Inline XBRL and contained in Exhibit 101.

~~Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 6 of this report~~

~~Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10).~~

111

Glossary of Selected Terms

Throughout this Quarterly Report on Form 10-Q, the Company may use certain performance metrics and other terms which are defined below.

Adjusted Earnings Per Diluted Share Excluding the Impact of Foreign Currency – 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 total revenues excluding net investment gains and losses, except for amortized hedge costs/income related to foreign currency exposure management strategies and net interest cash flows from derivatives associated with certain investment strategies. Adjusted expenses are U.S. GAAP total acquisition and operating expenses including the impact of interest cash flows from derivatives associated with notes payable but excluding any nonrecurring or other items not associated with the normal course of the company’s insurance operations and that do not reflect Aflac’s underlying business performance. The most comparable U.S. GAAP measure is net earnings. Adjusted earnings per share (basic or diluted) are the adjusted earnings for the period divided by the weighted average outstanding shares (basic or diluted) for the period presented. The most comparable U.S. GAAP measure is net earnings per share. This metric is then adjusted using the average yen/dollar exchange rate for the comparable prior year period, which eliminates dollar based fluctuations driven solely from currency rate changes.

Adjusted Net Investment Income - Net Investment Income adjusted for amortized hedge cost/income related to foreign currency exposure management strategies and certain derivative activity and net interest cash flows from foreign currency and interest rate derivatives associated with certain investment strategies, which are reclassified from net investment gains and (losses) to net investment income. The metric is used in segment reporting as a component of segment profitability.

Affiliated Corporate Agency – Agency in Japan directly affiliated with a specific corporation that sells insurance policies primarily to its employees.

Annualized Premiums in Force – the amount of gross premium that a policyholder must pay over a full year in order to keep coverage. The growth of net premiums (defined below) is directly affected by the change in premiums in force and by the change in weighted-average yen/dollar exchange rates.

Average Weekly Producer – The total number of writing associates who have produced greater than $0.00 during the production week - excluding any manual adjustments divided by the number of weeks in

the time period. The Company believes this metric allows sales management to monitor progress and needs, as well as serve as a leading indicator of future production capacity.

Capital Buffer – Established dollar amount of liquidity at the Parent Company reserved for injecting capital into the insurance entities or general liquidity support for general expenses at the Parent Company. Currently, the capital buffer is $1.0 billion and is part of $2.0 billion minimum balance at the Parent Company.

Earnings Per Basic Share – Net earnings divided by weighted-average number of shares outstanding for the period.

Earnings Per Diluted Share – Net earnings divided by the weighted-average number of shares outstanding for the period plus the weighted-average shares for the dilutive effect of share-based awards outstanding.

Group Insurance – Insurance issued to a group, such as an employer or trade association, that covers employees or association members and their dependents through certificates of coverage.

Individual Insurance – Insurance issued to an individual with the policy designed to cover that person and his or her dependents.

In-force Policies – A count of policies that are active contracts at the end of a period.

Liquidity Support – Internally defined and established dollar amount of liquidity reserved for supporting potential collateral and settlements of derivatives at the Parent Company. Currently, the liquidity support is $1.0 billion and is part of the $2.0 billion minimum balance at the Parent Company.

Net Investment Income – The income derived from interest and dividends on invested assets, after deducting investment expenses.

Net Premiums – (sometimes referred to as net premium income or net earned premiums) is a financial measure that appears on the Company's Consolidated Statements of Earnings and in its segment reporting. This measure reflects collected or due premiums that have been earned ratably on policies in force during the reporting period, reduced by premiums that have been ceded to third parties and increased by premiums assumed through reinsurance.

New Annualized Premium Sales – (sometimes referred to as new sales or sales) An operating measure that is not reflected on the Company's financial statements. New annualized premium sales generally represent annual premiums on policies the Company sold and incremental increases from policy conversions that

112

would be collected over a 12-month period assuming the policies remain in force for that entire period. For Aflac Japan, new annualized premium sales are determined by applications submitted during the reporting period. For Aflac U.S., new

annualized premium sales are determined by applications. that are issued during the reporting period. Policy conversions are defined as the positive difference in the annualized premium when a policy upgrades in the current reporting period.

New Money Yield – Gross yields earned on purchases of fixed maturities, loan receivables, and equities. Purchases exclude capitalized interest, securities lending/repurchase agreements, short-term/cash activity, and alternatives. New money yield for equities is based on the assumed dividend yield at the time of purchase. The new money yield for Aflac Japan excludes the impact of any derivatives and associated amortized hedge costs associated with USD-denominated investments. Management uses this metric as a leading indicator of future investment earning potential.

Operating Ratios – Used to evaluate the Company's financial condition and profitability. Examples include: (1) Ratios to total adjusted revenues, which present expenses as a percentage of total revenues and (2) Ratios to total premium, including benefit ratio.

Persistency – Percentage of premiums remaining in force at the end of a period, usually one year. For example, 95% persistency would mean that 95% of the premiums in force at the beginning of the period were still in force at the end of the period.

Pretax Adjusted Earnings – Earnings as adjusted earnings (as defined above) before the application of income taxes.

Pretax Adjusted Profit Margin – Adjusted earnings divided by adjusted revenues, before taxes are applied. This measure is used in Aflac's segment reporting.

Return on Average Invested Assets – Net investment income as a percentage of average invested assets during the period. Management uses this metric to demonstrate how our actual net investment income results represent an overall return on the portfolio to provide a more comparative metric as the size of our investment portfolio changes over time.

Risk-based Capital (RBC) Ratio – Statutory adjusted capital divided by statutory required capital. This insurance ratio is based on rules prescribed by the National Association of Insurance Commissioners (NAIC) and provides an indication of the amount of statutory capital the insurance company maintains, relative to the inherent risks in the insurer’s operations.

Solvency Margin Ratio (SMR) – Solvency margin total divided by one half of the risk total. This insurance ratio

is prescribed by the Japan Financial Services Agency (FSA) and is used for all life insurance companies in Japan to measure the adequacy of the company’s ability to pay

policyholder claims in the event actual risks exceed expected levels.

Statutory Earnings – Earnings determined according to accounting rules prescribed by the National Association of Insurance Commissioners (NAIC), as modified by the insurance department in the insurance company’s state of domicile. These statutory accounting rules are different from U.S. GAAP and are intended to emphasize policyholder protection and company solvency.

Weighted-Average Foreign Currency Exchange Rate –Japan segment operating earnings for the period (excluding hedge costs) in yen divided by Japan segment operating earnings for the period (excluding hedge costs) in dollars. Management uses this metric to evaluate and determine consolidated results on foreign currency effective basis.

113

Defined Terms

Throughout this Quarterly Report on Form 10-Q, the Company may use abbreviations, acronyms and defined terms which are defined below.



AFS			Available-for-Sale
AOCI			Accumulated Other Comprehensive Income
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
CARES			Coronavirus Aid, Relief, and Economic Security
CDSs			Credit Default Swaps
CMLs			Commercial Mortgage Loans
CSAs			Credit Support Annexes
DAC			Deferred Policy Acquisition Costs
DSCR			Debt Service Coverage Ratios
EPS			Earnings Per Share
FASB			Financial Accounting Standard Boards
FHLB			Federal Home Loan Bank of Atlanta
FSA			Japanese Financial Services Agency
HTM			Held-to-Maturity
ISDA			International Swaps and Derivatives Association, Inc.
ISOs			Incentive Stock Options
Japan Post Holdings			Japan Post Holdings Co., Ltd.
JGB			Japan Government Bond
LGD			Loss-Given-Default
LIBOR			London Interbank Offered Rate
LIPPC			Life Insurance Policyholder Protection Corporation
LTV			Loan-to-Value
MD&A			Management's Discussion and Analysis of Financial Condition and Results of Operations
MMLs			Middle Market Loans
MOF			Ministry of Finance
NAIC			National Association of Insurance Commissioners
NOLHGA			National Organization of Life and Health Guaranty Associations
NQSOs			Non-qualifying Stock Options
NRSROs			Nationally Recognized Statistical Rating Organizations
OTC			Over-the-Counter
PCD Financial Assets			Purchased Credit-Deteriorated Financial Assets
PD			Probability-of-Default
PPP			Paycheck Protection Program
PRM			Policy Reserve Matching
RBC			Risk-Based Capital
S&P			Standard & Poor's
SEC			Securities and Exchange Commission
SMI			Solvency Modernization Initiative
SMR			Solvency Margin Ratio
The Plan			Aflac Incorporated Long-Term Incentive Plan
TIBOR			Tokyo Interbank Market Rate
~~TREs~~TDRs			Trouble Debt Restructurings
TREs			Transitional Real Estate Loans
TTM			Telegraphic Transfer Middle Rate
U.S. GAAP			U.S. Generally Accepted Accounting Principles
VIEs			Variable Interest Entities

114

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Aflac Incorporated

October 29, 2020		~~Aflac Incorporated~~

~~April 30, 2020~~	/s/ Max K. ~~Broden~~Brodén
		(Max K. ~~Broden)~~Brodén)
		Executive Vice President; Chief Financial Officer

~~April 30,~~October 29, 2020		/s/ June Howard
		(June Howard)
		Senior Vice President, Financial Services; Chief Accounting Officer

~~105~~

115



Large accelerated filer	þ	Accelerated filer	☐
Non-accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐


PART I.				FINANCIAL INFORMATION:	Page

			Item 1.	Financial Statements (Unaudited)

~~PART I.~~				~~FINANCIAL INFORMATION:~~	~~Page~~

	~~Item 1.~~	~~Financial Statements (Unaudited)~~

		Consolidated Statements of Earnings Three Months Ended September 30, 2020 and 2019 Nine Months Ended September 30, 2020 and 2019	1

				Consolidated Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2020 and 2019 Nine Months Ended September 30, 2020 and 2019	2

				Consolidated Balance Sheets September 30, 2020, and December 31, 2019	3

				Consolidated Statements of Shareholders' Equity Three Months Ended March 31, 2020 and 2019	1

		~~Consolidated Statements of Comprehensive Income (Loss)~~ Three Months Ended June 30, 2020 and 2019 Three Months Ended ~~March 31,~~September 30, 2020 and 2019	24

				~~Consolidated Balance Sheets~~ ~~March 31, 2020, and December 31, 2019~~	3

		Consolidated Statements of ~~Shareholders' Equity~~Cash Flows ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2020 and 2019	48

				~~Consolidated Statements of Cash Flows~~ ~~Three Months Ended March 31, 2020 and 2019~~	5

		Notes to the Consolidated Financial Statements	69

			Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	6070

			Item 3.	Quantitative and Qualitative Disclosures about Market Risk	94107

			Item 4.	Controls and Procedures	95108

PART II.				OTHER INFORMATION:

			Item 1.	Legal Proceedings	96109

			Item 1A.	Risk Factors	96109

			Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~100~~110

			Item 6.	Exhibits	~~101~~111

Glossary of Selected Terms					~~102~~112


	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions, except for share and per-share amounts - Unaudited)	2020			2019			2020				2019
Revenues:
Net premiums, principally supplemental health insurance		$	4,623		$	4,736		$	13,969			$	14,109
Net investment income		896			936			2,669				2,692
Net investment gains (losses)		108			(153)			(525)				(147)
Other income (loss)		38			17			121				50
Total revenues		5,665			5,536			16,234				16,704
Benefits and expenses:
Benefits and claims, net		2,985			3,027			8,822				8,958
Acquisition and operating expenses:
Amortization of deferred policy acquisition costs		292			317			914				967
Insurance commissions		325			330			993				990
Insurance and other expenses		847			769			2,382		(1)		2,230
Interest expense		63			57			181				171
Total acquisition and operating expenses		1,527			1,473			4,470				4,358
Total benefits and expenses		4,512			4,500			13,292				13,316
Earnings before income taxes		1,153			1,036			2,942				3,388
Income taxes		(1,303)			259			(884)				865
Net earnings		$	2,456		$	777		$	3,826			$	2,523
Net earnings per share:
Basic		$	3.45		$	1.05		$	5.33			$	3.38
Diluted		3.44			1.04			5.31				3.37
Weighted-average outstanding common shares used in computing earnings per share (In thousands):
Basic		711,698			739,946			717,962				745,465
Diluted		713,793			743,842			720,333				749,452
Cash dividends per share		$	.28		$	.27		$	.84			$	.81



	Three Months Ended March 31,
(In millions - Unaudited)	2020				2019
Net earnings		$	566			$	928
Other comprehensive income (loss) before income taxes:
Unrealized foreign currency translation gains (losses) during period		85				(1		)
Unrealized gains (losses) on fixed maturity securities:
Unrealized holding gains (losses) on fixed maturity securities during period		(4,605		)		3,196
Reclassification adjustment for (gains) losses on fixed maturity securities included in net earnings		7				(17		)
Unrealized gains (losses) on derivatives during period		(4		)		(3		)
Pension liability adjustment during period		0				7
Total other comprehensive income (loss) before income taxes		(4,517		)		3,182
Income tax expense (benefit) related to items of other comprehensive income (loss)		(1,242		)		852
Other comprehensive income (loss), net of income taxes		(3,275		)		2,330
Total comprehensive income (loss)		$	(2,709	)		$	3,258


	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions - Unaudited)	2020			2019			2020			2019
Net earnings		$	2,456		$	777		$	3,826		$	2,523
Other comprehensive income (loss) before income taxes:
Unrealized foreign currency translation gains (losses) during period		172			(22)			329			393
Unrealized gains (losses) on fixed maturity securities:
Unrealized holding gains (losses) on fixed maturity securities during period		1,420			1,185			26			6,427
Reclassification adjustment for (gains) losses on fixed maturity securities included in net earnings		(13)			41			132			(1)
Unrealized gains (losses) on derivatives during period		2			(8)			(3)			(12)
Pension liability adjustment during period		(1)			1			(1)			5
Total other comprehensive income (loss) before income taxes		1,580			1,197			483			6,812
Income tax expense (benefit) related to items of other comprehensive income (loss)		413			310			29			1,712
Other comprehensive income (loss), net of income taxes		1,167			887			454			5,100
Total comprehensive income (loss)		$	3,623		$	1,664		$	4,280		$	7,623



(Former name, former address and former fiscal year, if changed since last report)



(In millions, except for share and per-share amounts)	March 31, 2020 (Unaudited)				December 31, 2019
Assets:
Investments and cash:
Fixed maturity securities available for sale, at fair value, (allowance for credit losses of $63, amortized cost $84,673 in 2020 and amortized cost $76,063 in 2019)		$	92,502			$	86,950
Fixed maturity securities available for sale - consolidated variable interest entities, at fair value (amortized cost $3,208 in 2020 and amortized cost of $3,308 in 2019)		3,786				4,312
Fixed maturity securities held to maturity, at amortized cost, net of allowance for credit losses of $9 in 2020 (fair value $29,347 in 2020 and $37,594 in 2019)		23,278				30,085
Equity securities, at fair value		660				802
Commercial mortgage and other loans, net of allowance for credit losses of $125 in 2020 (includes $9,051 in 2020 and $7,956 in 2019 of consolidated variable interest entities)		10,750				9,569
Other investments (includes $550 in 2020 and $494 in 2019 of consolidated variable interest entities)		1,843				1,477
Cash and cash equivalents		4,148				4,896
Total investments and cash		136,967				138,091
Receivables		813				828
Accrued investment income		734				772
Deferred policy acquisition costs		10,164				10,128
Property and equipment, at cost less accumulated depreciation		586				581
Other		2,352				2,368
Total assets		$	151,616			$	152,768
Liabilities and shareholders’ equity:
Liabilities:
Policy liabilities:
Future policy benefits		$	91,393			$	90,335
Unpaid policy claims		4,693				4,659
Unearned premiums		4,044				4,243
Other policyholders’ funds		7,422				7,317
Total policy liabilities		107,552				106,554
Income taxes		4,610				5,370
Payables for return of cash collateral on loaned securities		2,969				1,876
Notes payable and lease obligations		6,758				6,569
Other		3,325				3,440
Total liabilities		125,214				123,809
Commitments and contingent liabilities (Note 13)
Shareholders’ equity:
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2020 and 2019; issued 1,350,650 shares in 2020 and 1,349,309 shares in 2019		135				135
Additional paid-in capital		2,334				2,313
Retained earnings		34,599				34,291
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains (losses)		(1,543		)		(1,623		)
Unrealized gains (losses) on fixed maturity securities		6,043				8,548
Unrealized gains (losses) on derivatives		(35		)		(33		)
Pension liability adjustment		(277		)		(277		)
Treasury stock, at average cost		(14,854		)		(14,395		)
Total shareholders’ equity		26,402				28,959
Total liabilities and shareholders’ equity		$	151,616			$	152,768


(In millions, except for share and per-share amounts)	September 30, 2020 (Unaudited)			December 31, 2019
Assets:
Investments and cash:
Fixed maturity securities available for sale, at fair value, (allowance for credit losses of $38 in 2020, amortized cost $86,659 in 2020 and amortized cost $76,063 in 2019)		$	98,844		$	86,950
Fixed maturity securities available for sale - consolidated variable interest entities, at fair value (amortized cost $3,279 in 2020 and amortized cost of $3,308 in 2019)		4,284			4,312
Fixed maturity securities held to maturity, at amortized cost, net of allowance for credit losses of $9 in 2020 (fair value $29,807 in 2020 and $37,594 in 2019)		23,937			30,085
Equity securities, at fair value		775			802
Commercial mortgage and other loans, net of allowance for credit losses of $165 in 2020 (includes $9,245 in 2020 and $7,956 in 2019 of consolidated variable interest entities)		10,822			9,569
Other investments (includes $658 in 2020 and $494 in 2019 of consolidated variable interest entities)		1,904			1,477
Cash and cash equivalents		5,563			4,896
Total investments and cash		146,129			138,091
Receivables		824			828
Accrued investment income		737			772
Deferred policy acquisition costs		10,319			10,128
Property and equipment, at cost less accumulated depreciation		584			581
Other		2,362			2,368
Total assets		$	160,955		$	152,768
Liabilities and shareholders’ equity:
Liabilities:
Policy liabilities:
Future policy benefits		$	95,240		$	90,335
Unpaid policy claims		4,976			4,659
Unearned premiums		3,729			4,243
Other policyholders’ funds		7,642			7,317
Total policy liabilities		111,587			106,554
Income taxes		4,278			5,370
Payables for return of cash collateral on loaned securities		1,495			1,876
Notes payable and lease obligations		7,825			6,569
Other		3,291			3,440
Total liabilities		128,476			123,809
Commitments and contingent liabilities (Note 13)
Shareholders’ equity:
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2020 and 2019; issued 1,350,855 shares in 2020 and 1,349,309 shares in 2019		135			135
Additional paid-in capital		2,383			2,313
Retained earnings		37,460			34,291
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains (losses)		(1,290)			(1,623)
Unrealized gains (losses) on fixed maturity securities		9,520			8,548
Unrealized gains (losses) on derivatives		(35)			(33)
Pension liability adjustment		(278)			(277)
Treasury stock, at average cost		(15,416)			(14,395)
Total shareholders’ equity		32,479			28,959
Total liabilities and shareholders’ equity		$	160,955		$	152,768



(In millions, except for per share amounts - Unaudited)	Common Stock		Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity
Balance at December 31, 2019	$	135	$	2,313	$	34,291		$	6,615		$	(14,395	)	$	28,959
Cumulative effect of change in accounting principle, Accounting Standards Update (ASU) 2016-13, net of tax ⁽¹⁾	0		0		(56		)	0			0			(56		)
Cumulative effect of change in accounting principle, ASU 2019-04, net of tax ⁽¹⁾	0		0		0			848			0			848
Balance at January 1, 2020	$	135	$	2,313	$	34,235		$	7,463		$	(14,395	)	$	29,751
Net earnings	0		0		566			0			0			566
Unrealized foreign currency translation gains (losses) during period, net of income tax	0		0		0			80			0			80
Unrealized gains (losses) on fixed maturity securities during period, net of income taxes and reclassification adjustments	0		0		0			(3,353		)	0			(3,353		)
Unrealized gains (losses) on derivatives during period, net of income taxes	0		0		0			(2		)	0			(2		)
Pension liability adjustment during period, net of income taxes	0		0		0			0			0			0
Dividends to shareholders ($.28 per share)	0		0		(202		)	0			0			(202		)
Exercise of stock options	0		5		0			0			0			5
Share-based compensation	0		7		0			0			0			7
Purchases of treasury stock	0		0		0			0			(476		)	(476		)
Treasury stock reissued	0		9		0			0			17			26
Balance at March 31, 2020	$	135	$	2,334	$	34,599		$	4,188		$	(14,854	)	$	26,402



Standard	Description	Date of Adoption	Effect on Financial Statements or Other Significant Matters
Accounting Standards Update (ASU) 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	In March 2020, the FASB issued amendments that provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the reference rate reform if certain criteria are met. The amendments in this ASU only apply to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to apply the amendments as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The amendments generally expire on December 31 2022, i.e., they do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and hedging relationships evaluated for periods after December 31, 2022.	April 1, 2020	The adoption of the new guidance did not have an impact on the Company’s financial statements. The Company will continue to evaluate the impacts of reference rate reform on contract modifications and hedging relationships through December 31, 2022.
ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments	In April 2019, the FASB issued Codification improvements to clarify and correct certain areas of guidance amended as part of ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments; and ASU 2017-12, Derivative and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The most significant of these improvements to the Company was related to the Codification improvement to ASU 2017-12 and the clarification that a one-time reclassification of assets that are eligible to be hedged under the last-of-layer method (i.e., certain pre-payable securities) from held-to-maturity to available-for-sale is allowed under the new hedge accounting guidance and would not impact the Company’s ability to continue to classify other bonds as held-to-maturity. The other amendments related to ASU 2017-12 and 2016-01 are either not significant, or were previously implemented as part of the related ASU adoptions. Applicable amendments related to ASU 2016-13 are discussed within the recent adoption of that update below.	January 1, 2020	The adoption of this guidance resulted in a reclassification of $6.9 billion (at amortized cost) of pre-payable fixed-maturity securities from the held-to-maturity to the available-for-sale category. The reclassification resulted in recording in accumulated other comprehensive income a net unrealized gain of $848 million on an after-tax basis, based on the securities’ fair values on the reclassification date. The reclassification impacted the adoption of ASU 2016-13 (see ASU 2016-13 below for additional details).



	March 31, 2020
(In millions)	Amortized Cost		Allowance for Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale, carried at fair value through other comprehensive income:
Fixed maturity securities:
Yen-denominated:
Japan government and agencies	$	31,853	$	0	$	4,766	$	14	$	36,605
Municipalities	984		0		228		1		1,211
Mortgage- and asset-backed securities	306		0		31		0		337
Public utilities	4,412		0		430		93		4,749
Sovereign and supranational	1,300		0		33		27		1,306
Banks/financial institutions	7,159		0		404		557		7,006
Other corporate	7,817		0		753		389		8,181
Total yen-denominated	53,831		0		6,645		1,081		59,395
U.S. dollar-denominated:
U.S. government and agencies	350		0		23		0		373
Municipalities	1,084		0		145		0		1,229
Mortgage- and asset-backed securities	152		0		8		0		160
Public utilities	3,844		0		649		50		4,443
Sovereign and supranational	239		0		65		1		303
Banks/financial institutions	2,848		0		545		21		3,372
Other corporate	25,533		63		2,531		988		27,013
Total U.S. dollar-denominated	34,050		63		3,966		1,060		36,893
Total securities available for sale	$	87,881	$	63	$	10,611	$	2,141	$	96,288



	December 31, 2019
(In millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Securities available for sale, carried at fair value through other comprehensive income:
Fixed maturity securities:
Yen-denominated:
Japan government and agencies	$	30,929	$	5,169	$	0	$	36,098
Municipalities	516		116		3		629
Mortgage- and asset-backed securities	229		25		0		254
Public utilities	1,855		406		0		2,261
Sovereign and supranational	680		50		0		730
Banks/financial institutions	6,152		700		86		6,766
Other corporate	5,323		944		24		6,243
Total yen-denominated	45,684		7,410		113		52,981
U.S dollar-denominated:
U.S. government and agencies	293		9		0		302
Municipalities	1,077		141		0		1,218
Mortgage- and asset-backed securities	149		7		0		156
Public utilities	3,804		725		10		4,519
Sovereign and supranational	239		73		0		312
Banks/financial institutions	2,879		646		4		3,521
Other corporate	25,246		3,255		248		28,253
Total U.S. dollar-denominated	33,687		4,856		262		38,281
Total securities available for sale	$	79,371	$	12,266	$	375	$	91,262



(In millions)	Amortized Cost ⁽¹⁾			Fair Value
Available for sale:
Due in one year or less		$	1,078		$	1,105
Due after one year through five years		8,992			8,806
Due after five years through 10 years		12,399			13,221
Due after 10 years		64,891			72,659
Mortgage- and asset-backed securities		458			497
Total fixed maturity securities available for sale		$	87,818		$	96,288
Held to maturity:
Due in one year or less		$	0		$	0
Due after one year through five years		0			0
Due after five years through 10 years		49			55
Due after 10 years		23,229			29,292
Mortgage- and asset-backed securities		0			0
Total fixed maturity securities held to maturity		$	23,278		$	29,347


(In millions)	Amortized Cost (1)			Fair Value
Available for sale:
Due in one year or less		$	1,031		$	1,053
Due after one year through five years		8,938			9,175
Due after five years through 10 years		13,159			15,092
Due after 10 years		66,091			77,091
Mortgage- and asset-backed securities		681			717
Total fixed maturity securities available for sale		$	89,900		$	103,128
Held to maturity:
Due in one year or less		$	0		$	0
Due after one year through five years		0			0
Due after five years through 10 years		251			292
Due after 10 years		23,686			29,515
Mortgage- and asset-backed securities		0			0
Total fixed maturity securities held to maturity		$	23,937		$	29,807



	March 31, 2020
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed maturity securities available for sale:
Japan government and agencies:
Yen-denominated		$	725		$	14		$	725		$	14		$	0		$	0
Municipalities:
Yen-denominated		56			1			42			0			14			1
Public utilities:
U.S. dollar-denominated		825			50			701			38			124			12
Yen-denominated		880			93			880			93			0			0
Sovereign and supranational:
U.S. dollar-denominated		18			1			18			1			0			0
Yen-denominated		701			27			701			27			0			0
Banks/financial institutions:
U.S. dollar-denominated		355			21			321			13			34			8
Yen-denominated		3,410			557			2,626			406			784			151
Other corporate:
U.S. dollar-denominated		8,244			988			5,427			527			2,817			461
Yen-denominated		2,829			389			2,677			357			152			32
Total		$	18,043		$	2,141		$	14,118		$	1,476		$	3,925		$	665


1.	~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~


Securities Lending Transactions Accounted for as Secured Borrowings	Securities Lending Transactions Accounted for as Secured Borrowings												Securities Lending Transactions Accounted for as Secured Borrowings
Remaining Contractual Maturity of the Agreements	Remaining Contractual Maturity of the Agreements												Remaining Contractual Maturity of the Agreements
	March 31, 2020						December 31, 2019							September 30, 2020						December 31, 2019
(In millions)	Overnight and Continuous⁽¹⁾		Up to 30 days		Total		Overnight and Continuous⁽¹⁾		Up to 30 days		Total		(In millions)	Overnight and Continuous(1)		Up to 30 days		Total			Overnight and Continuous(1)		Up to 30 days		Total
Securities lending transactions:													Securities lending transactions:
Fixed maturity securities:													Fixed maturity securities:
Japan government and agencies	$	0	$	2,318	$	2,318	$	0	$	1,013	$	1,013	Japan government and agencies	$	0	$	534	$	534		$	0	$	1,013	$	1,013

Public utilities	35		0		35		35		0		35		Public utilities	61		0		61			35		0		35
Sovereign and supranational	1		0		1		2		0		2		Sovereign and supranational	2		0		2			2		0		2
Banks/financial institutions	68		0		68		48		0		48		Banks/financial institutions	85		0		85			48		0		48
Other corporate	547		0		547		778		0		778		Other corporate	813		0		813			778		0		778
Total borrowings	$	651	$	2,318	$	2,969	$	863	$	1,013	$	1,876	Total borrowings	$	961	$	534	$	1,495		$	863	$	1,013	$	1,876
Gross amount of recognized liabilities for securities lending transactions	Gross amount of recognized liabilities for securities lending transactions				$	2,969					$	1,876	Gross amount of recognized liabilities for securities lending transactions					$	1,495						$	1,876



(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
Three Months Ended March 31, 2020:
Foreign currency forwards	Fixed maturity securities	$	(16	)	$	(7	)	$	(9	)	$	10		$	1
Total gains (losses)		$	(16	)	$	(7	)	$	(9	)	$	10		$	1
Three Months Ended March 31, 2019:
Foreign currency forwards	Fixed maturity securities	$	9		$	(10	)	$	19		$	(18	)	$	1
Foreign currency options	Fixed maturity securities	(4		)	(4		)	0			0			0
Interest rate swaptions	Fixed maturity securities	(1		)	(1		)	0			0			0
Total gains (losses)		$	4		$	(15	)	$	19		$	(18	)	$	1


(In millions)	Carrying Amount of the Hedged Assets/(Liabilities)⁽¹⁾					Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities)				(In millions)	Carrying Amount of the Hedged Assets/(Liabilities)(1)					Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities)
		March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019				September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Fixed maturity securities		$	4,469	$	4,633	$	249	$	256	Fixed maturity securities		$	4,368	$	4,633	$	241	$	256


September 30, 2020
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Financial Instruments			Securities Collateral		Cash Collateral Received			Net Amount
Derivative assets:
Derivative assets subject to a master netting agreement or offsetting arrangement
OTC - bilateral		$	336		$	0		$	336		$	(238)	$	(6)		$	(92)		$	0
OTC - cleared		6			0			6			0		0			(5)			1
Total derivative assets subject to a master netting agreement or offsetting arrangement		342			0			342			(238)		(6)			(97)			1
Derivative assets not subject to a master netting agreement or offsetting arrangement
OTC - bilateral		97						97											97

Total derivative assets not subject to a master netting agreement or offsetting arrangement		97						97											97
Total derivative assets		439			0			439			(238)		(6)			(97)			98
Securities lending and similar arrangements		1,471			0			1,471			0		0			(1,471)			0
Total		$	1,910		$	0		$	1,910		$	(238)	$	(6)		$	(1,568)		$	98


	September 30, 2020
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities available for sale, carried at fair value:
Fixed maturity securities:
Government and agencies		$	35,539		$	1,656		$	0		$	37,195
Municipalities		0			2,619			0			2,619
Mortgage- and asset-backed securities		0			526			191			717
Public utilities		0			10,030			368			10,398
Sovereign and supranational		0			1,422			0			1,422
Banks/financial institutions		0			11,672			24			11,696
Other corporate		0			38,813			268			39,081
Total fixed maturity securities		35,539			66,738			851			103,128
Equity securities		608			81			86			775
Other investments		823			0			0			823
Cash and cash equivalents		5,563			0			0			5,563
Other assets:
Foreign currency swaps		0			53			97			150
Foreign currency forwards		0			282			0			282
Foreign currency options		0			1			0			1
Interest rate swaps		0			6			0			6


Total other assets		0			342			97			439
Total assets		$	42,533		$	67,161		$	1,034		$	110,728
Liabilities:
Other liabilities:
Foreign currency swaps		$	0		$	49		$	240		$	289
Foreign currency forwards		0			335			0			335
Foreign currency options		0			1			0			1


Total liabilities		$	0		$	385		$	240		$	625



	December 31, 2019
(In millions)	Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities held to maturity, carried at amortized cost:
Fixed maturity securities:
Government and agencies		$	22,241		$	27,937		$	354		$	0		$	28,291
Municipalities		821			0			1,083			0			1,083
Mortgage and asset-backed securities		16			0			7			10			17
Public utilities		2,535			0			2,954			0			2,954
Sovereign and supranational		1,123			0			1,320			0			1,320
Banks/financial institutions		916			0			1,018			0			1,018
Other corporate		2,433			0			2,911			0			2,911
Commercial mortgage and other loans		9,569			0			0			9,648			9,648
Other investments ⁽¹⁾		30			0			30			0			30
Total assets		$	39,684		$	27,937		$	9,677		$	9,658		$	47,272
Liabilities:
Other policyholders’ funds		$	7,317		$	0		$	0		$	7,234		$	7,234
Notes payable (excluding leases)		6,408			0			6,663			272			6,935
Total liabilities		$	13,725		$	0		$	6,663		$	7,506		$	14,169


	September 30, 2020
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities available for sale, carried at fair value:
Fixed maturity securities:
Government and agencies:
Third party pricing vendor		$	35,539		$	1,656		$	0		$	37,195
Total government and agencies		35,539			1,656			0			37,195
Municipalities:
Third party pricing vendor		0			2,619			0			2,619
Total municipalities		0			2,619			0			2,619
Mortgage- and asset-backed securities:
Third party pricing vendor		0			361			0			361
Broker/other		0			165			191			356
Total mortgage- and asset-backed securities		0			526			191			717
Public utilities:
Third party pricing vendor		0			10,030			0			10,030
Broker/other		0			0			368			368
Total public utilities		0			10,030			368			10,398
Sovereign and supranational:
Third party pricing vendor		0			1,422			0			1,422

Total sovereign and supranational		0			1,422			0			1,422
Banks/financial institutions:
Third party pricing vendor		0			11,672			0			11,672
Broker/other		0			0			24			24
Total banks/financial institutions		0			11,672			24			11,696
Other corporate:
Third party pricing vendor		0			38,809			0			38,809
Broker/other		0			4			268			272
Total other corporate		0			38,813			268			39,081
Total securities available for sale		$	35,539		$	66,738		$	851		$	103,128
Equity securities, carried at fair value:
Third party pricing vendor		$	608		$	81		$	0		$	689
Broker/other		0			0			86			86
Total equity securities		$	608		$	81		$	86		$	775



	December 31, 2019
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities available for sale, carried at fair value:
Fixed maturity securities:
Government and agencies:
Third party pricing vendor		$	34,878		$	1,522		$	0		$	36,400
Total government and agencies		34,878			1,522			0			36,400
Municipalities:
Third party pricing vendor		0			1,847			0			1,847
Total municipalities		0			1,847			0			1,847
Mortgage- and asset-backed securities:
Third party pricing vendor		0			232			0			232
Broker/other		0			0			178			178
Total mortgage- and asset-backed securities		0			232			178			410
Public utilities:
Third party pricing vendor		0			6,556			0			6,556
Broker/other		0			0			224			224
Total public utilities		0			6,556			224			6,780
Sovereign and supranational:
Third party pricing vendor		0			1,042			0			1,042
Total sovereign and supranational		0			1,042			0			1,042
Banks/financial institutions:
Third party pricing vendor		0			10,264			0			10,264
Broker/other		0			0			23			23
Total banks/financial institutions		0			10,264			23			10,287
Other corporate:
Third party pricing vendor		0			34,234			0			34,234
Broker/other		0			0			262			262
Total other corporate		0			34,234			262			34,496
Total securities available for sale		$	34,878		$	55,697		$	687		$	91,262
Equity securities, carried at fair value:
Third party pricing vendor		$	642		$	80		$	0		$	722
Broker/other		0			0			80			80
Total equity securities		$	642		$	80		$	80		$	802


Three Months Ended March 31, 2020
Three Months Ended September 30, 2020																						Three Months Ended September 30, 2020
	Fixed Maturity Securities											Equity Securities		Derivatives ⁽¹⁾									Fixed Maturity Securities								Equity Securities		Derivatives (1)
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities			Banks/ Financial Institutions		Other Corporate					Foreign Currency Swaps			Credit Default Swaps		Total			(In millions)	Mortgage- and Asset- Backed Securities		Public Utilities		Banks/ Financial Institutions		Other Corporate				Foreign Currency Swaps		Total
Balance, beginning of period	$	178		$	224		$	23	$	262		$	80	$	43		$	0	$	810		Balance, beginning of period	$	188	$	322	$	24	$	243	$	86	$	(168)	$	695
Net investment gains (losses) included in earnings	0			0			0		0			0		(185		)	0		(185		)	Net investment gains (losses) included in earnings	0		0		0		0		0		23		23
Unrealized gains (losses) included in other comprehensive income (loss)	1			(8		)	0		(17		)	0		(4		)	0		(28		)	Unrealized gains (losses) included in other comprehensive income (loss)	3		15		0		24		0		2		44
Purchases, issuances, sales and settlements:																						Purchases, issuances, sales and settlements:
Purchases	0			83			0		0			2		0			0		85			Purchases	0		33		0		1		5		0		39
Issuances	0			0			0		0			0		0			0		0			Issuances	0		0		0		0		0		0		0
Sales	0			0			0		0			0		0			0		0			Sales	0		0		0		0		(5)		0		(5)
Settlements	0			(1		)	0		0			0		0			0		(1		)	Settlements	0		(2)		0		0		0		0		(2)
Transfers into Level 3	9		⁽²⁾	0			0		0			0		0			0		9			Transfers into Level 3	0		0		0		0		0		0		0
Transfers out of Level 3	0			0			0		0			0		0			0		0			Transfers out of Level 3	0		0		0		0		0		0		0
Balance, end of period	$	188		$	298		$	23	$	245		$	82	$	(146	)	$	0	$	690		Balance, end of period	$	191	$	368	$	24	$	268	$	86	$	(143)	$	794
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0		$	0		$	0	$	0		$	0	$	(185	)	$	0	$	(185	)	Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0	$	0	$	0	$	0	$	0	$	23	$	23


Three Months Ended September 30, 2019
	Fixed Maturity Securities										Equity Securities		Derivatives (1)
(In millions)	Mortgage- and Asset- Backed Securities		Public Utilities		Banks/ Financial Institutions			Other Corporate						Foreign Currency Swaps		Total
Balance, beginning of period	$	183	$	204	$	24		$	199		$	65		$	94	$	769
Net investment gains (losses) included in earnings	0		0		0			0			0			(84)		(84)
Unrealized gains (losses) included in other comprehensive income (loss)	0		4		0			5			0			(2)		7
Purchases, issuances, sales and settlements:
Purchases	0		0		0			19			14			0		33
Issuances	0		0		0			0			0			0		0
Sales	0		0		0			0			0			0		0
Settlements	0		(2)		0			0			0			0		(2)
Transfers into Level 3	0		0		0			1		(2)	0			0		1
Transfers out of Level 3	0		0		(1)		(2)	0			0			0		(1)
Balance, end of period	$	183	$	206	$	23		$	224		$	79		$	8	$	723
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0	$	0	$	0		$	0		$	0		$	(84)	$	(84)


Nine Months Ended September 30, 2020
	Fixed Maturity Securities											Equity Securities		Derivatives (1)
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities			Banks/ Financial Institutions		Other Corporate					Foreign Currency Swaps		Total
Balance, beginning of period	$	178		$	224		$	23	$	262		$	80	$	43	$	810
Net investment gains (losses) included in earnings	0			0			0		0			0		(184)		(184)
Unrealized gains (losses) included in other comprehensive income (loss)	5			6			0		8			0		(2)		17
Purchases, issuances, sales and settlements:
Purchases	0			129			1		13			12		0		155
Issuances	0			0			0		0			0		0		0
Sales	0			0			0		0			(6)		0		(6)
Settlements	(1)			(6)			0		0			0		0		(7)
Transfers into Level 3	9		(2)	15		(3)	0		0			0		0		24
Transfers out of Level 3	0			0			0		(15)		(3)	0		0		(15)
Balance, end of period	$	191		$	368		$	24	$	268		$	86	$	(143)	$	794
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0		$	0		$	0	$	0		$	0	$	(184)	$	(184)


Three Months Ended March 31, 2019
Nine Months Ended September 30, 2019																							Nine Months Ended September 30, 2019
	Fixed Maturity Securities												Equity Securities		Derivatives ⁽¹⁾									Fixed Maturity Securities										Equity Securities		Derivatives (1)
(In millions)	Mortgage- and Asset- Backed Securities		Public Utilities				Banks/ Financial Institutions		Other Corporate						Foreign Currency Swaps			Credit Default Swaps		Total			(In millions)	Mortgage- and Asset- Backed Securities		Public Utilities			Banks/ Financial Institutions		Other Corporate					Foreign Currency Swaps		Total
Balance, beginning of period	$	177	$	109			$	23	$	213			$	46	$	80		$	0	$	648		Balance, beginning of period	$	177	$	109		$	23	$	213		$	46	$	80	$	648
Net investment gains (losses) included in earnings	0		0				0		0				0		(8		)	0		(8		)	Net investment gains (losses) included in earnings	0		0			0		0			0		(68)		(68)
Unrealized gains (losses) included in other comprehensive income (loss)	1		1				0		1				0		(2		)	0		1			Unrealized gains (losses) included in other comprehensive income (loss)	6		10			1		12			0		(4)		25
Purchases, issuances, sales and settlements:																							Purchases, issuances, sales and settlements:
Purchases	0		0				0		63				0		0			0		63			Purchases	0		0			0		107			33		0		140
Issuances	0		0				0		0				0		0			0		0			Issuances	0		0			0		0			0		0		0
Sales	0		0				0		(2		)		0		0			0		(2		)	Sales	0		0			0		(2)			0		0		(2)
Settlements	0		0				0		0				0		0			0		0			Settlements	0		(4)			0		0			0		0		(4)
Transfers into Level 3	0		0				0		25			⁽²⁾	0		0			0		25			Transfers into Level 3	0		116		(2)	0		26		(2)	0		0		142
Transfers out of Level 3	0		(25		)	⁽²⁾	0		(16		)	⁽³⁾	0		0			0		(41		)	Transfers out of Level 3	0		(25)		(2)	(1)		(132)		(2),(3)	0		0		(158)
Balance, end of period	$	178	$	85			$	23	$	284			$	46	$	70		$	0	$	686		Balance, end of period	$	183	$	206		$	23	$	224		$	79	$	8	$	723
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0	$	0			$	0	$	0			$	0	$	(8	)	$	0	$	(8	)	Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in earnings	$	0	$	0		$	0	$	0		$	0	$	(68)	$	(68)


(In thousands of shares)	2020	2019
Common stock - issued:
Balance, beginning of period	1,349,309	1,347,540
Exercise of stock options and issuance of restricted shares	1,546	1,650
Balance, end of period	1,350,855	1,349,190
Treasury stock:
Balance, beginning of period	622,516	592,254
Purchases of treasury stock:
Share repurchase program	26,108	23,126
Other	541	589
Dispositions of treasury stock:
Shares issued to AFL Stock Plan	(1,584)	(1,232)
Exercise of stock options	(49)	(382)
Other	(251)	(295)
Balance, end of period	647,281	614,060
Shares outstanding, end of period	703,574	735,130


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Anti-dilutive share-based awards		592		1		857		8



Three Months Ended March 31, 2020
(In millions)	Unrealized Foreign Currency Translation Gains (Losses)				Unrealized Gains (Losses) on Investment Securities				Unrealized Gains (Losses) on Derivatives				Pension Liability Adjustment				Total
Balance at December 31, 2019		$	(1,623	)		$	8,548			$	(33	)		$	(277	)		$	6,615
Cumulative effect of change in accounting principle - ASU 2019-04		0				848				0				0				848
Balance at January 1, 2020		$	(1,623	)		$	9,396			$	(33	)		$	(277	)		$	7,463
Other comprehensive income (loss) before reclassification		80				(3,359		)		(2		)		(6		)		(3,287		)
Amounts reclassified from accumulated other comprehensive income (loss)		0				6				0				6				12
Net current-period other comprehensive income (loss)		80				(3,353		)		(2		)		0				(3,275		)
Balance at March 31, 2020		$	(1,543	)		$	6,043			$	(35	)		$	(277	)		$	4,188


(In millions)	Three Months Ended September 30, 2020
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income			Affected Line Item in the Statements of Earnings
Unrealized gains (losses) on available-for-sale securities		$	13	Net investment gains (losses)
		(6)		Tax (expense) or benefit(1)
		$	7	Net of tax
Amortization of defined benefit pension items:
Actuarial gains (losses)		$	(7)	Acquisition and operating expenses(2)
Prior service (cost) credit		0		Acquisition and operating expenses(2)
		3		Tax (expense) or benefit(1)
		$	(4)	Net of tax
Total reclassifications for the period		$	3	Net of tax



	Stock Option Shares (in thousands)		Weighted-Average Remaining Term (in years)		Aggregate Intrinsic Value (in millions)			Weighted-Average Exercise Price Per Share
Outstanding		3,354		4.4		$	16		$	29.98
Exercisable		3,353		4.4		16			29.97


(In thousands of shares)	Shares		Weighted-Average Grant-Date Fair Value Per Share
Restricted stock at December 31, 2019	2,715	(1)		$	43.74
Granted in 2020	1,494			45.97
Canceled in 2020	(58)			49.70
Vested in 2020	(1,556)			35.20
Restricted stock at September 30, 2020	2,595			$	48.69


	Three Months Ended September 30,
	Pension Benefits												Other
	Japan						U.S.						Postretirement Benefits
(In millions)	2020			2019			2020			2019			2020			2019
Components of net periodic benefit cost:
Service cost		$	6		$	6		$	7		$	5		$	0		$	0
Interest cost		1			1			9			10			0			0
Expected return on plan assets		(2)			(2)			(9)			(8)			0			0
Amortization of net actuarial loss		1			1			6			3			0			1

Net periodic (benefit) cost		$	6		$	6		$	13		$	10		$	0		$	1



	Page
Executive Summary		6272
Results of Operations		6878
Investments		8092
Deferred Policy Acquisition Costs		88100
Policy Liabilities		88101
Benefit Plans		88100
Policyholder Protection		89101
Off-Balance Sheet Arrangements		89101
Liquidity and Capital Resources		89101
Critical Accounting Estimates		94107