Thank you for joining me as I provide a financial update of Aflac Incorporated's results for the fourth quarter of 2023.
For the quarter, adjusted earnings per diluted share decreased 4.6% year-over-year to $1.25 with a $0.02 negative impact from FX in the quarter.
In this quarter, remeasurement gains totaled $71 million and variable investment income ran $27 million or $0.04 per share below our long-term return expectations.
We also entered into a reinsurance transaction that for U.S.
GAAP purposes was treated as a recapture and led to a noneconomic loss of $151 million pretax.
favorable of Aflac capital. very above returns has cost our transaction economics with to significantly This
adjusted an Adjusted currency of losses, the translation value capital. gains was book per and increased share, X.X%, our spread to acceptable including foreign ROE cost XX.X%, and
Overall, results these view the quarter we solid. as in
liability. earned within our of transactions reinsurance paid-up Net the Lapses somewhat declined but premium profit elevated, were with expectations. Starting segment. X.X%, quarter our policies, and for Japan reflecting impacts deferred the
the the factors, benefit Japan's year-over-year. these premium XX all declined came XXX X.X%. for adjusting third ratio if points estimated earned total approximately down in basis an However, sector basis XX.X%, the And at quarter, points ratio was benefit year-over-year. XX.X% for down
well-priced impact in-force We favorable QX. We continue to remeasurement experience from to in favorable XXX our and estimate the block. large actual basis the to on to be gains ratio points benefit mature expected
expectations. treatment to it Long-term underwriting rate hospitalization leading place, with and solid to not experience to of of continue basis as in a their This tend customers is year-over-year. in XX.X% of We update trends continued Persistency elevation coverage. some was down cancer persistency remained be and relates lapses XX and experience. in with favorable points refresh to line experience change as out
control Our expense some to and allowance was driven down XX.X%, reinsurance in by transactions. primarily expense extent, Japan ratio by XX basis good from year-over-year, expense points
Japan than XXX was yen the on FX. income The return transfer our year-over-year, investment of net very And as basis pretax favorable higher good terms quarter dollar-denominated by alternative was year's in last margin due assets a up offset XX.X% related to U.S. was points result. higher portfolio a XX.X%, our quarter. we reinsurance. and Adjusted in on for This up experienced investments yields a
of XXX of Persistency the year-over-year Turning persistency quarters premium This up basis out function a results. falling poor stabilization product across increased to Net numerous earned is X.X%. was categories. XX.X%. metric and points U.S. to
but XXX XX We remeasurement incorporate the basis total in Our we have But by ratio stabilized. some we higher experience XXXX. more came gains has models, benefit points the benefit into recent basis expected at our utilization reserves. impacted ratio as the points in released than XX.X% Claims quarter. QX lower reserve than estimate
XX.X%, Our expense U.S. amortization. higher ratio DAC seasonality basis year-over-year, in by the primarily XXX was driven points up and
both total XXXX to Our growth life initiatives, disability, expect expense their by grow and businesses network group basis We net this XXX and scale and our these direct-to-consumer to and Adjusted in dental decrease to and vision would improve points. increased ratio impact investment profitability. segment U.S. U.S. rate margin income XX.X%, driven fixed by was portfolios. X.X%, yields floating on in gains the higher by and partially primarily driven the remeasurement a Profitability mainly offset by was of solid our higher in with up and expenses. pretax the
commercial of list watch total $XXX remains billion, active approximately estate $X.X around real proceedings. these Our in foreclosure with million
reserves loans of these with million this by valuation current we quarter. $XX As associated CECL a our increased result these marks, low
resulted which in our maximize them $XX these is manage why which current in to our do reflects portfolio, believe the through confident intrinsic moved of also recoveries. not ownership and a ability true that into assets, of this owned, market quality we value write-down. X estate the properties economic our million We are real We take distressed cycle
ceded the recapture million, recorded year of of pretax a is Corporate a $XXX by $XXX larger million which loss loss our segment, than on primarily we reinsurance. driven In ago, somewhat
credit income increased associated GAAP date, tax year credit these million to These line. the our well corporate lower To million U.S. for quarter. net tax an with impacted bottom than the saw line investments due expectations. investments in net While to million, both was with performing credit $XX a The an by the in was of volume line purposes the positive impact of are tax impact hedge we negatively to net higher and $XXX line rates investment income and investment adjusted positive amortized income, last $XXX investments.
platform, We am to out continuing pleased performance. outcome are build and our the and reinsurance I with
economics In QX, with similar structure tranche another we executed from our January and first transaction to XXXX.
Unencumbered as X,XXX% $X capital well company remains In which Japan. not balance. estimate billion liquidity be the minimum finalized, credit are These an we than we holding while Our ended shocks. position cycles to billion, we with withstand ratios, above capital and our combined monitor, greater and in manage RBC, stood strong, at quarter strong external our SMR actively XXX%. as to $X.X above stress
denominated relative capital movements and million yen, in in terms.
We internal of hedging as protecting repurchased U.S. own dividends statutory our of economic a yen-dollar our comfortable stock of debt XX.X%, X/X or we enterprise roughly just QX, rate. Japan This the $XX X.X is remains $XXX will and This well FSA Aflac in leverage and with with impairments impact earnings billion Leverage to IRR were within the QX. of in program our value in to approximately Japan $XXX our million and and our both on at our XX% XX% impairment, JPY limited corridor dollar fluctuate million offering deployments. paid hold these expectations of capital. of good part $X leverage is million, below U.S.
tactical a deploy risk We how will to cost continue we strong of order the to capital. drive be spread capital to with balance and ROE in manage our flexible adjusted meaningful sheet in and
tomorrow, in we XXXX outlook On Before address I that look tomorrow's well to our have the earnings for to XXXX. I'd to earnings like we further as drivers for quarter end, attention for in attention. bring detail financial our will forward XXXX call our your earnings. your included in fourth in our X-K the I earnings discussing you results Thank results as call. on slides
