Georgia
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58-1167100
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1932 Wynnton Road, Columbus, Georgia
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31999
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(Address of principal executive offices)
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(ZIP Code)
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706.323.3431
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
¨
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Emerging growth company
¨
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Class
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July 26, 2018
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Common Stock, $.10 Par Value
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|
767,800,258
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PART I.
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Page
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Item 1.
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Three Months Ended June 30, 2018 and 2017
Six Months Ended June 30, 2018 and 2017
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Three Months Ended June 30, 2018 and 2017
Six Months Ended June 30, 2018 and 2017
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June 30, 2018, and December 31, 2017
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Six Months Ended June 30, 2018 and 2017
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Six Months Ended June 30, 2018 and 2017
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Item 2.
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Item 3.
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Item 4.
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PART II.
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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/s/ KPMG LLP
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Three Months Ended
June 30, |
Six Months Ended
June 30, |
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|||||||||||||||||
(In millions, except for share and per-share amounts - Unaudited)
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2018
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2017
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2018
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2017
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||||||||||||||
Revenues:
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||||||||
Net premiums, principally supplemental health insurance
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$
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4,706
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$
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4,665
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$
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9,450
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$
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9,303
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Net investment income
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862
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|
|
802
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1,699
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1,596
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Realized investment gains (losses):
|
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||||||||
Other-than-temporary impairment losses realized
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(5
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)
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(9
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)
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(12
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)
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(19
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)
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||||
Other gains (losses)
(1)
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|
8
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(47
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)
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(119
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)
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(177
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)
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||||
Total realized investment gains (losses)
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3
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(56
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)
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(131
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)
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(196
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)
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||||
Other income (loss)
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18
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17
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36
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34
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||||
Total revenues
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5,589
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5,428
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11,054
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10,737
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||||
Benefits and expenses:
|
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||||||||
Benefits and claims, net
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3,031
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3,039
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6,073
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6,091
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Acquisition and operating expenses:
|
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|
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||||||||
Amortization of deferred policy acquisition costs
|
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303
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|
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|
283
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|
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617
|
|
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577
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||||
Insurance commissions
|
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338
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|
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335
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676
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664
|
|
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||||
Insurance and other expenses
|
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732
|
|
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665
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1,463
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1,339
|
|
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||||
Interest expense
|
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54
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|
|
|
61
|
|
|
|
111
|
|
|
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122
|
|
|
||||
Total acquisition and operating expenses
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1,427
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|
|
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1,344
|
|
|
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2,867
|
|
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2,702
|
|
|
||||
Total benefits and expenses
|
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4,458
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|
|
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4,383
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|
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8,940
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8,793
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|
|
||||
Earnings before income taxes
|
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1,131
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|
|
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1,045
|
|
|
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2,114
|
|
|
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1,944
|
|
|
||||
Income taxes
|
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299
|
|
|
|
332
|
|
|
|
564
|
|
|
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639
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||||
Net earnings
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$
|
832
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$
|
713
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$
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1,550
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$
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1,305
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|
Net earnings per share:
|
|
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|
|
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|
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||||||||
Basic
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$
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1.08
|
|
|
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$
|
.90
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|
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$
|
2.00
|
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$
|
1.64
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Diluted
|
|
1.07
|
|
|
|
.89
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1.98
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|
|
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1.62
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||||
Weighted-average outstanding common shares used in
computing earnings per share (In thousands): |
|
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||||||||
Basic
|
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772,949
|
|
|
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792,865
|
|
|
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775,734
|
|
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797,536
|
|
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||||
Diluted
|
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777,807
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798,695
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780,814
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803,391
|
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Cash dividends per share
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$
|
.26
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$
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.22
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$
|
.52
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|
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$
|
.43
|
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|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||
(In millions - Unaudited)
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2018
|
2017
|
2018
|
2017
|
||||||||||||||||
Net earnings
|
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$
|
832
|
|
|
|
$
|
713
|
|
|
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$
|
1,550
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|
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$
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1,305
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|
|
Other comprehensive income (loss) before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized foreign currency translation gains (losses) during
period |
|
(493
|
)
|
|
|
9
|
|
|
|
332
|
|
|
|
383
|
|
|
||||
Unrealized gains (losses) on fixed maturity securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) on fixed maturity securities
during period |
|
(506
|
)
|
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1,075
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(2,233
|
)
|
(2)
|
|
549
|
|
|
||||
Reclassification adjustment for realized (gains) losses on
fixed maturity securities included in net earnings |
|
28
|
|
|
|
1
|
|
|
|
26
|
|
|
|
17
|
|
|
||||
Unrealized gains (losses) on derivatives during period
|
|
(2
|
)
|
|
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(2
|
)
|
|
|
4
|
|
|
|
1
|
|
|
||||
Pension liability adjustment during period
|
|
2
|
|
|
|
0
|
|
|
|
0
|
|
|
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(2
|
)
|
|
||||
Total other comprehensive income (loss) before income taxes
|
|
(971
|
)
|
|
|
1,083
|
|
|
|
(1,871
|
)
|
|
|
948
|
|
|
||||
Income tax expense (benefit) related to items of other comprehensive
income (loss) |
|
(138
|
)
|
|
|
314
|
|
|
|
(469
|
)
|
(2)
|
|
177
|
|
|
||||
Other comprehensive income (loss), net of income taxes
|
|
(833
|
)
|
|
|
769
|
|
|
|
(1,402
|
)
|
|
|
771
|
|
|
||||
Total comprehensive income (loss)
|
|
$
|
(1
|
)
|
|
|
$
|
1,482
|
|
|
|
$
|
148
|
|
|
|
$
|
2,076
|
|
|
(In millions)
|
June 30,
2018 (Unaudited) |
|
December 31,
2017 |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||
Investments and cash:
|
|
|
|
|
|
|
|
||||
Securities available for sale, at fair value:
|
|
|
|
|
|
|
|
||||
Fixed maturity securities (amortized cost $74,443 in 2018 and
$70,594 in 2017) (1) |
|
$
|
80,679
|
|
|
|
|
$
|
78,804
|
|
|
Fixed maturity securities - consolidated variable interest entities (amortized
cost $4,492 in 2018 and $4,538 in 2017) (1) |
|
5,202
|
|
|
|
|
5,509
|
|
|
||
Securities held to maturity, at amortized cost:
|
|
|
|
|
|
|
|
||||
Fixed maturity securities (fair value $37,956 in 2018 and $38,072 in 2017)
|
|
31,259
|
|
|
|
|
31,430
|
|
|
||
Equity securities, at fair value:
|
|
|
|
|
|
|
|
||||
Equity securities
(1)
|
|
348
|
|
|
|
|
270
|
|
|
||
Equity securities - consolidated variable interest entities
|
|
755
|
|
|
|
|
753
|
|
|
||
Other investments
(2)
|
|
5,831
|
|
|
|
|
3,402
|
|
|
||
Cash and cash equivalents
|
|
3,847
|
|
|
|
|
3,491
|
|
|
||
Total investments and cash
|
|
127,921
|
|
|
|
|
123,659
|
|
|
||
Receivables
|
|
892
|
|
|
|
|
827
|
|
|
||
Accrued investment income
|
|
769
|
|
|
|
|
769
|
|
|
||
Deferred policy acquisition costs
|
|
9,740
|
|
|
|
|
9,505
|
|
|
||
Property and equipment, at cost less accumulated depreciation
|
|
448
|
|
|
|
|
434
|
|
|
||
Other
(3)
|
|
2,216
|
|
|
|
|
2,023
|
|
|
||
Total assets
|
|
$
|
141,986
|
|
|
|
|
$
|
137,217
|
|
|
(In millions, except for share and per-share amounts)
|
June 30,
2018 (Unaudited) |
|
December 31,
2017 |
||||||||
Liabilities and shareholders’ equity:
|
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||
Policy liabilities:
|
|
|
|
|
|
|
|
||||
Future policy benefits
|
|
$
|
85,046
|
|
|
|
|
$
|
81,857
|
|
|
Unpaid policy claims
|
|
4,524
|
|
|
|
|
4,392
|
|
|
||
Unearned premiums
|
|
5,600
|
|
|
|
|
5,959
|
|
|
||
Other policyholders’ funds
|
|
7,140
|
|
|
|
|
6,939
|
|
|
||
Total policy liabilities
|
|
102,310
|
|
|
|
|
99,147
|
|
|
||
Income taxes
|
|
4,069
|
|
|
|
|
4,745
|
|
|
||
Payables for return of cash collateral on loaned securities
|
|
3,712
|
|
|
|
|
606
|
|
|
||
Notes payable
|
|
5,315
|
|
|
|
|
5,289
|
|
|
||
Other
(4)
|
|
2,780
|
|
|
|
|
2,832
|
|
|
||
Total liabilities
|
|
118,186
|
|
|
|
|
112,619
|
|
|
||
Commitments and contingent liabilities (Note 13)
|
|
|
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
|
|
|
||||
Common stock of $.10 par value. In thousands: authorized 1,900,000
shares in 2018 and 2017; issued 1,347,061 shares in 2018 and 1,345,762 shares in 2017 |
|
135
|
|
|
|
|
135
|
|
|
||
Additional paid-in capital
|
|
2,117
|
|
|
|
|
2,052
|
|
|
||
Retained earnings
|
|
30,809
|
|
|
|
|
29,895
|
|
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Unrealized foreign currency translation gains (losses)
|
|
(1,766
|
)
|
|
|
|
(1,750
|
)
|
|
||
Unrealized gains (losses) on fixed maturity securities
(5)
|
|
4,836
|
|
|
|
|
5,964
|
|
|
||
Unrealized gains (losses) on derivatives
|
|
(23
|
)
|
|
|
|
(23
|
)
|
|
||
Pension liability adjustment
|
|
(195
|
)
|
|
|
|
(163
|
)
|
|
||
Treasury stock, at average cost
|
|
(12,113
|
)
|
|
|
|
(11,512
|
)
|
|
||
Total shareholders’ equity
|
|
23,800
|
|
|
|
|
24,598
|
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
141,986
|
|
|
|
|
$
|
137,217
|
|
|
|
Six Months Ended
June 30, |
||||||||||
(In millions - Unaudited)
|
|
2018
|
|
|
|
2017
|
|
||||
Common stock:
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
|
$
|
135
|
|
|
|
|
$
|
135
|
|
|
Balance, end of period
|
|
135
|
|
|
|
|
135
|
|
|
||
Additional paid-in capital:
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
|
2,052
|
|
|
|
|
1,908
|
|
|
||
Exercise of stock options
|
|
21
|
|
|
|
|
28
|
|
|
||
Share-based compensation
|
|
25
|
|
|
|
|
24
|
|
|
||
Gain (loss) on treasury stock reissued
|
|
19
|
|
|
|
|
20
|
|
|
||
Balance, end of period
|
|
2,117
|
|
|
|
|
1,980
|
|
|
||
Retained earnings:
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
|
29,895
|
|
|
|
|
25,981
|
|
|
||
Cumulative effect of change in accounting principle - financial instruments,
net of income taxes (1) |
|
148
|
|
|
|
|
0
|
|
|
||
Cumulative effect of change in accounting principle - tax effects from tax reform
(1)
|
|
(374
|
)
|
|
|
|
0
|
|
|
||
Net earnings
|
|
1,550
|
|
|
|
|
1,305
|
|
|
||
Dividends to shareholders
|
|
(410
|
)
|
|
|
|
(344
|
)
|
|
||
Balance, end of period
|
|
30,809
|
|
|
|
|
26,942
|
|
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
|
4,028
|
|
|
|
|
2,630
|
|
|
||
Cumulative effect of change in accounting principle - financial instruments,
net of income taxes (1) |
|
(148
|
)
|
|
|
|
0
|
|
|
||
Cumulative effect of change in accounting principle - tax effects from tax reform
(1)
|
|
374
|
|
|
|
|
0
|
|
|
||
Unrealized foreign currency translation gains (losses) during
period, net of income taxes |
|
309
|
|
|
|
|
403
|
|
|
||
Unrealized gains (losses) on fixed maturity securities during
period, net of income taxes and reclassification adjustments (1) |
|
(1,714
|
)
|
|
|
|
368
|
|
|
||
Unrealized gains (losses) on derivatives during period, net of
income taxes |
|
3
|
|
|
|
|
1
|
|
|
||
Pension liability adjustment during period, net of income taxes
|
|
0
|
|
|
|
|
(1
|
)
|
|
||
Balance, end of period
|
|
2,852
|
|
|
|
|
3,401
|
|
|
||
Treasury stock:
|
|
|
|
|
|
|
|
||||
Balance, beginning of period
|
|
(11,512
|
)
|
|
|
|
(10,172
|
)
|
|
||
Purchases of treasury stock
|
|
(615
|
)
|
|
|
|
(813
|
)
|
|
||
Cost of shares issued
|
|
14
|
|
|
|
|
30
|
|
|
||
Balance, end of period
|
|
(12,113
|
)
|
|
|
|
(10,955
|
)
|
|
||
Total shareholders’ equity
|
|
$
|
23,800
|
|
|
|
|
$
|
21,503
|
|
|
|
Six Months Ended June 30,
|
||||||||||
(In millions - Unaudited)
|
2018
|
|
2017
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
1,550
|
|
|
|
|
$
|
1,305
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Change in receivables and advance premiums
|
|
(1
|
)
|
|
|
|
8
|
|
|
||
Capitalization of deferred policy acquisition costs
|
|
(716
|
)
|
|
|
|
(693
|
)
|
|
||
Amortization of deferred policy acquisition costs
|
|
617
|
|
|
|
|
577
|
|
|
||
Increase in policy liabilities
|
|
1,346
|
|
|
|
|
1,326
|
|
|
||
Change in income tax liabilities
|
|
(180
|
)
|
|
|
|
368
|
|
|
||
Realized investment (gains) losses
|
|
131
|
|
|
|
|
196
|
|
|
||
Other, net
|
|
60
|
|
|
|
|
78
|
|
|
||
Net cash provided (used) by operating activities
|
|
2,807
|
|
|
|
|
3,165
|
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||
Proceeds from investments sold or matured:
|
|
|
|
|
|
|
|
||||
Available-for-sale fixed maturity securities
|
|
3,869
|
|
|
|
|
2,574
|
|
|
||
Equity securities
|
|
216
|
|
|
|
|
157
|
|
|
||
Held-to-maturity fixed maturity securities
|
|
878
|
|
|
|
|
1,311
|
|
|
||
Other investments - loan receivables
|
|
358
|
|
|
|
|
90
|
|
|
||
Costs of investments acquired:
|
|
|
|
|
|
|
|
||||
Available-for-sale fixed maturity securities
|
|
(6,798
|
)
|
|
|
|
(5,662
|
)
|
|
||
Equity securities
|
|
(233
|
)
|
|
|
|
(178
|
)
|
|
||
Other investments - loan receivables
|
|
(2,705
|
)
|
|
|
|
(492
|
)
|
|
||
Other investments, excluding loan receivables, net
|
|
(175
|
)
|
|
|
|
(112
|
)
|
|
||
Settlement of derivatives, net
|
|
(36
|
)
|
|
|
|
(34
|
)
|
|
||
Cash received (pledged or returned) as collateral, net
|
|
3,110
|
|
|
|
|
(129
|
)
|
|
||
Other, net
|
|
73
|
|
|
|
|
(42
|
)
|
|
||
Net cash provided (used) by investing activities
|
|
(1,443
|
)
|
|
|
|
(2,517
|
)
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Purchases of treasury stock
|
|
(601
|
)
|
|
|
|
(813
|
)
|
|
||
Proceeds from borrowings
|
|
0
|
|
|
|
|
524
|
|
|
||
Principal payments under debt obligations
|
|
0
|
|
|
|
|
(656
|
)
|
|
||
Dividends paid to shareholders
|
|
(396
|
)
|
|
|
|
(328
|
)
|
|
||
Change in investment-type contracts, net
|
|
9
|
|
|
|
|
23
|
|
|
||
Treasury stock reissued
|
|
12
|
|
|
|
|
17
|
|
|
||
Other, net
|
|
(12
|
)
|
|
|
|
2
|
|
|
||
Net cash provided (used) by financing activities
|
|
(988
|
)
|
|
|
|
(1,231
|
)
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(20
|
)
|
|
|
|
(12
|
)
|
|
||
Net change in cash and cash equivalents
|
|
356
|
|
|
|
|
(595
|
)
|
|
||
Cash and cash equivalents, beginning of period
|
|
3,491
|
|
|
|
|
4,859
|
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
3,847
|
|
|
|
|
$
|
4,264
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
||||
Income taxes paid
|
|
$
|
744
|
|
|
|
|
$
|
293
|
|
|
Interest paid
|
|
90
|
|
|
|
|
103
|
|
|
||
Noncash interest
|
|
21
|
|
|
|
|
19
|
|
|
||
Impairment losses included in realized investment losses
|
|
12
|
|
|
|
|
19
|
|
|
||
Noncash financing activities:
|
|
|
|
|
|
|
|
||||
Capital lease obligations
|
|
10
|
|
|
|
|
3
|
|
|
||
Treasury stock issued for:
|
|
|
|
|
|
|
|
||||
Associate stock bonus
|
|
5
|
|
|
|
|
16
|
|
|
||
Shareholder dividend reinvestment
|
|
8
|
|
|
|
|
16
|
|
|
||
Share-based compensation grants
|
|
2
|
|
|
|
|
1
|
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Standard
|
Description
|
Date of Adoption
|
Effect on Financial Statements or Other Significant Matters
|
Accounting Standards Update (ASU) 2018-03
Technical Corrections and Improvements to Financial Instruments - Overall
|
In February 2018, the FASB issued amendments to clarify certain aspects of the guidance issued in the original
Financial Instruments - Overall - Recognition and Measurement
pronouncement summarized below. Specifically, for entities who have chosen the measurement alternative approach for equity securities without readily determinable fair values, the amendments clarify that entities may change from a measurement alternative approach to a fair value method through an irrevocable election that would apply to a specific equity security and all identical or similar investments of the same issuer; entities should use an observable price at the date of the transaction rather than reporting date for the measurement alternative calculation; and insurance companies should use a prospective transition method when applying the measurement alternative. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years beginning after June 15, 2018. All entities may early adopt these amendments for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, as long as they have adopted the
Financial Instruments - Overall - Recognition and Measurement
guidance discussed below.
|
Early adopted as of January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company’s financial position, results of operations, or disclosures.
|
Standard
|
Description
|
Date of Adoption
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2018-02
Income Statement - Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income
|
In February 2018, the FASB issued amendments which allow a reclassification from accumulated other comprehensive income (AOCI) to retained earnings of the effects of the change in the U.S. federal income tax rate resulting from the Tax Cuts and Jobs Act (Tax Act) on the gross deferred tax amounts and the corresponding valuation allowances related to items remaining in AOCI. The amendments eliminate the stranded tax effects resulting from the Tax Act and also require certain disclosures about the reclassified tax effects. The amendments are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Public business entities may early adopt this guidance in any interim reporting period for which financial statements have not yet been issued. The amendments should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized.
|
Early adopted as of January 1, 2018
|
The amounts reclassified from
AOCI to retained earnings include the income tax effects of the change in the federal corporate tax rate enacted by the Tax Act. The Company’s policy is to follow the portfolio approach for releasing income tax effects from AOCI. The adoption of this guidance resulted in an increase to beginning 2018 AOCI of $374 million with a corresponding decrease to beginning 2018 retained earnings as of January 1, 2018.
|
ASU 2017-09
Compensation - Stock Compensation: Scope of Modification Accounting
|
In May 2017, the FASB issued amendments to provide guidance clarifying when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. An entity should apply modification accounting if the fair value, vesting conditions or classification of the award (as an equity instrument or liability instrument) changes as a result of the change in terms or conditions of the award.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
ASU 2017-07
Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
In March 2017, the FASB issued amendments requiring that an employer report the service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net periodic pension cost and net periodic postretirement benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
Standard
|
Description
|
Date of Adoption
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2017-05
Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
|
In February 2017, the FASB issued amendments that clarify the scope and accounting guidance for the derecognition of a nonfinancial asset or a financial asset that meets the definition of an "in substance nonfinancial asset." The amendments define an "in substance nonfinancial asset" and provide additional accounting guidance for partial sales of nonfinancial assets.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
ASU 2017-01
Business Combinations: Clarifying the Definition of a Business
|
In January 2017, the FASB issued amendments clarifying when a set of assets and activities is a business. The amendments provide a screen to exclude transactions where substantially all the fair value of the transferred set is concentrated in a single asset, or group of similar assets, from being evaluated as a business.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
ASU 2016-18
Statement of Cash Flows: Restricted Cash
|
In November 2016, the FASB issued amendments requiring that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, statements of cash flows, or disclosures.
|
ASU 2016-16
Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory
|
In October 2016, the FASB issued amendments that require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
ASU 2016-15
Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments
|
In August 2016, the FASB issued amendments that provide guidance on eight specific statement of cash flows classification issues.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, statements of cash flows, or disclosures.
|
ASU 2016-01
Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities
|
In January 2016, the FASB issued guidance to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The main provisions of this guidance require certain equity investments to be measured at fair value with changes in fair value recognized in net earnings; separate presentation in other comprehensive income for changes in fair value of financial liabilities measured under the fair value option that are due to instrument-specific credit risk; and changes in disclosures associated with the fair value of financial instruments. The guidance also clarifies that entities should evaluate the need for a valuation allowance on a deferred tax asset (DTA) related to available-for-sale (AFS) securities in combination with the entity's other DTAs.
|
January 1, 2018
|
The Company recorded a cumulative effect adjustment with an increase to beginning 2018 retained earnings and a decrease to beginning 2018 AOCI of $148 million, net of taxes.
|
Standard
|
Description
|
Date of Adoption
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2014-09
Revenue from Contracts with Customers
|
In May 2014, the FASB issued updated guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
|
January 1, 2018
|
The adoption of this guidance did not have a significant impact on the Company's financial position, results of operations, or disclosures.
|
Standard
|
Description
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2018-10
Codification Improvements to Topic 842, Leases
|
In July 2018, the FASB issued guidance which clarifies, corrects errors in, or makes minor improvements to the Codification related to ASU 2016-02,
Leases
(Topic 842). The amendments in this ASU affect narrow aspects of the guidance issued in the amendments to ASU 2016-02, including but not limited to, Residual Value Guarantees, Rate Implicit in the Lease, Lessee Reassessment of Lease Classification and Variable Lease Payments that Depend on an Index or a Rate. Amendments within this ASU follow the effective dates of Topic 842, which are effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.
|
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 2018-01
Leases: Land Easement Practical Expedient for Transition to Topic 842
|
In January 2018, the FASB issued guidance which provides an entity with the option to elect a transition practical expedient to not evaluate, under Topic 842, land easements that exist or expired before the entity's adoption of Topic 842 and that were not previously accounted for as leases under Topic 840. The amendments clarify that new or modified land easements should be evaluated under the new leases standard once an entity has adopted the new standard. The amendments are effective for public business entities for fiscal years beginning after December 15, 2018, 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 2017-12
Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities
|
In August 2017, the FASB issued guidance which improves and simplifies the accounting rules around hedge accounting and will create more transparency around how economic results are presented on financial statements. Issues addressed in this new guidance include: 1) risk component hedging, 2) accounting for the hedged item in fair value hedges of interest rate risk, 3) recognition and presentation of the effects of hedging instruments, and 4) amounts excluded from the assessment of hedge effectiveness. The amendments are effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance of the guidance.
|
The adoption of this guidance is not expected to have a significant impact on the Company's financial position, results of operations, or disclosures.
|
Standard
|
Description
|
Effect on Financial Statements or Other Significant Matters
|
ASU 2016-02
Leases
|
In February 2016, the FASB issued updated guidance for accounting for leases. Per the amendments, lessees will be required to recognize all leases on the balance sheet with the exception of short-term leases. A lease liability will be recorded for the obligation of a lessee to make lease payments arising from a lease. A right-of-use asset will be recorded which represents the lessee’s right to control the use of a specified asset for a lease term. Under the new guidance, lessor accounting is largely unchanged. The amendments are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period.
|
The Company has identified certain operating leases in scope of this guidance to include office space and equipment leases (See Note 15 of the Notes to the Consolidated Financial Statements in the 2017 Annual Report for current balances of leases in scope). The leases within scope of this guidance will increase the Company's right-of-use assets and lease liabilities recorded on its statement of financial position, however the Company estimates leases within scope of the guidance to represent less than 1% of its total assets as of June 30, 2018. The Company estimates that the adoption of this guidance will not have a significant impact on its financial position, results of operations, or disclosures.
|
2.
|
BUSINESS SEGMENT INFORMATION
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Aflac Japan:
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
$
|
3,227
|
|
|
$
|
3,222
|
|
|
$
|
6,490
|
|
|
$
|
6,416
|
|
|
Net investment income, less amortized hedge costs
(1)
|
606
|
|
|
557
|
|
|
1,194
|
|
|
1,115
|
|
|
||||
Other income
|
11
|
|
|
10
|
|
|
22
|
|
|
20
|
|
|
||||
Total Aflac Japan
|
3,844
|
|
|
3,789
|
|
|
7,706
|
|
|
7,551
|
|
|
||||
Aflac U.S.:
|
|
|
|
|
|
|
|
|
||||||||
Net earned premiums
|
1,426
|
|
|
1,388
|
|
|
2,853
|
|
|
2,778
|
|
|
||||
Net investment income
|
182
|
|
|
180
|
|
|
357
|
|
|
358
|
|
|
||||
Other income
|
2
|
|
|
2
|
|
|
4
|
|
|
3
|
|
|
||||
Total Aflac U.S.
|
1,610
|
|
|
1,570
|
|
|
3,214
|
|
|
3,139
|
|
|
||||
Corporate and other
(2)
|
85
|
|
|
70
|
|
|
164
|
|
|
138
|
|
|
||||
Total adjusted revenues
|
5,539
|
|
|
5,429
|
|
|
11,084
|
|
|
10,828
|
|
|
||||
Realized investment gains (losses)
(1),(2)
|
50
|
|
|
(1
|
)
|
|
(30
|
)
|
|
(91
|
)
|
|
||||
Total revenues
|
$
|
5,589
|
|
|
$
|
5,428
|
|
|
$
|
11,054
|
|
|
$
|
10,737
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Pretax earnings:
|
|
|
|
|
|
|
|
|
||||||||
Aflac Japan
(1)
|
$
|
836
|
|
|
$
|
791
|
|
|
$
|
1,654
|
|
|
$
|
1,560
|
|
|
Aflac U.S.
|
340
|
|
|
330
|
|
|
677
|
|
|
640
|
|
|
||||
Corporate and other
(2)
|
(38
|
)
|
|
(48
|
)
|
|
(84
|
)
|
|
(100
|
)
|
|
||||
Pretax adjusted earnings
|
1,138
|
|
|
1,073
|
|
|
2,247
|
|
|
2,100
|
|
|
||||
Realized investment gains (losses)
(1),(2),(3)
|
35
|
|
|
(19
|
)
|
|
(63
|
)
|
|
(128
|
)
|
|
||||
Other income (loss)
|
(42
|
)
|
|
(9
|
)
|
|
(70
|
)
|
|
(28
|
)
|
|
||||
Total earnings before income taxes
|
$
|
1,131
|
|
|
$
|
1,045
|
|
|
$
|
2,114
|
|
|
$
|
1,944
|
|
|
Income taxes applicable to pretax adjusted earnings
|
$
|
303
|
|
|
$
|
342
|
|
|
$
|
592
|
|
|
$
|
694
|
|
|
Effect of foreign currency translation on after-tax
adjusted earnings |
7
|
|
|
(9
|
)
|
|
29
|
|
|
(3
|
)
|
|
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
Assets:
|
|
|
|
|
|
|
|
||||
Aflac Japan
|
|
$
|
120,228
|
|
|
|
|
$
|
114,402
|
|
|
Aflac U.S.
|
|
19,588
|
|
|
|
|
19,893
|
|
|
||
Corporate and other
|
|
2,170
|
|
|
|
|
2,922
|
|
|
||
Total assets
|
|
$
|
141,986
|
|
|
|
|
$
|
137,217
|
|
|
3.
|
INVESTMENTS
|
|
June 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Cost or
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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Yen-denominated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Japan government and agencies
|
|
$
|
31,384
|
|
|
|
|
$
|
3,742
|
|
|
|
|
$
|
150
|
|
|
|
|
$
|
34,976
|
|
|
Municipalities
|
|
375
|
|
|
|
|
32
|
|
|
|
|
9
|
|
|
|
|
398
|
|
|
||||
Mortgage- and asset-backed securities
|
|
156
|
|
|
|
|
22
|
|
|
|
|
0
|
|
|
|
|
178
|
|
|
||||
Public utilities
|
|
1,663
|
|
|
|
|
313
|
|
|
|
|
3
|
|
|
|
|
1,973
|
|
|
||||
Sovereign and supranational
|
|
1,263
|
|
|
|
|
188
|
|
|
|
|
30
|
|
|
|
|
1,421
|
|
|
||||
Banks/financial institutions
|
|
5,399
|
|
|
|
|
651
|
|
|
|
|
126
|
|
|
|
|
5,924
|
|
|
||||
Other corporate
|
|
4,298
|
|
|
|
|
688
|
|
|
|
|
6
|
|
|
|
|
4,980
|
|
|
||||
Total yen-denominated
|
|
44,538
|
|
|
|
|
5,636
|
|
|
|
|
324
|
|
|
|
|
49,850
|
|
|
||||
U.S. dollar-denominated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agencies
|
|
133
|
|
|
|
|
8
|
|
|
|
|
1
|
|
|
|
|
140
|
|
|
||||
Municipalities
|
|
1,396
|
|
|
|
|
135
|
|
|
|
|
1
|
|
|
|
|
1,530
|
|
|
||||
Mortgage- and asset-backed securities
|
|
162
|
|
|
|
|
8
|
|
|
|
|
1
|
|
|
|
|
169
|
|
|
||||
Public utilities
|
|
4,939
|
|
|
|
|
555
|
|
|
|
|
103
|
|
|
|
|
5,391
|
|
|
||||
Sovereign and supranational
|
|
264
|
|
|
|
|
58
|
|
|
|
|
0
|
|
|
|
|
322
|
|
|
||||
Banks/financial institutions
|
|
2,871
|
|
|
|
|
417
|
|
|
|
|
30
|
|
|
|
|
3,258
|
|
|
||||
Other corporate
|
|
24,632
|
|
|
|
|
1,569
|
|
|
|
|
980
|
|
|
|
|
25,221
|
|
|
||||
Total U.S. dollar-denominated
|
|
34,397
|
|
|
|
|
2,750
|
|
|
|
|
1,116
|
|
|
|
|
36,031
|
|
|
||||
Total securities available for sale
|
|
$
|
78,935
|
|
(1)
|
|
|
$
|
8,386
|
|
|
|
|
$
|
1,440
|
|
|
|
|
$
|
85,881
|
|
(1)
|
|
June 30, 2018
|
||||||||||||||||||||||
(In millions)
|
Cost or
Amortized Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||||||||||
Securities held to maturity, carried at amortized cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Yen-denominated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Japan government and agencies
|
|
$
|
21,808
|
|
|
|
|
$
|
5,409
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
27,217
|
|
|
Municipalities
|
|
363
|
|
|
|
|
111
|
|
|
|
|
0
|
|
|
|
|
474
|
|
|
||||
Mortgage- and asset-backed securities
|
|
16
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
|
17
|
|
|
||||
Public utilities
|
|
3,236
|
|
|
|
|
317
|
|
|
|
|
1
|
|
|
|
|
3,552
|
|
|
||||
Sovereign and supranational
|
|
1,557
|
|
|
|
|
286
|
|
|
|
|
0
|
|
|
|
|
1,843
|
|
|
||||
Banks/financial institutions
|
|
1,532
|
|
|
|
|
178
|
|
|
|
|
10
|
|
|
|
|
1,700
|
|
|
||||
Other corporate
|
|
2,747
|
|
|
|
|
406
|
|
|
|
|
0
|
|
|
|
|
3,153
|
|
|
||||
Total yen-denominated
|
|
31,259
|
|
|
|
|
6,708
|
|
|
|
|
11
|
|
|
|
|
37,956
|
|
|
||||
Total securities held to maturity
|
|
$
|
31,259
|
|
|
|
|
$
|
6,708
|
|
|
|
|
$
|
11
|
|
|
|
|
$
|
37,956
|
|
|
|
June 30, 2018
|
||||||||||||||||
(In millions)
|
|
|
|
|
|
|
Fair
Value |
||||||||||
Equity securities, carried at fair value through
net earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Yen-denominated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
712
|
|
|
U.S. dollar-denominated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
391
|
|
|
|
Total equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,103
|
|
(1)
|
|
December 31, 2017
|
||||||||||||||||||||||
(In millions)
|
Cost or
Amortized Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||||||||||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Yen-denominated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Japan government and agencies
|
|
$
|
27,980
|
|
|
|
|
$
|
3,363
|
|
|
|
|
$
|
271
|
|
|
|
|
$
|
31,072
|
|
|
Municipalities
|
|
314
|
|
|
|
|
28
|
|
|
|
|
12
|
|
|
|
|
330
|
|
|
||||
Mortgage- and asset-backed securities
|
|
242
|
|
|
|
|
29
|
|
|
|
|
0
|
|
|
|
|
271
|
|
|
||||
Public utilities
|
|
1,635
|
|
|
|
|
352
|
|
|
|
|
6
|
|
|
|
|
1,981
|
|
|
||||
Sovereign and supranational
|
|
1,380
|
|
|
|
|
190
|
|
|
|
|
1
|
|
|
|
|
1,569
|
|
|
||||
Banks/financial institutions
|
|
4,742
|
|
|
|
|
811
|
|
|
|
|
53
|
|
|
|
|
5,500
|
|
|
||||
Other corporate
|
|
4,085
|
|
|
|
|
809
|
|
|
|
|
7
|
|
|
|
|
4,887
|
|
|
||||
Total yen-denominated
|
|
40,378
|
|
|
|
|
5,582
|
|
|
|
|
350
|
|
|
|
|
45,610
|
|
|
||||
U.S dollar-denominated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. government and agencies
|
|
146
|
|
|
|
|
13
|
|
|
|
|
1
|
|
|
|
|
158
|
|
|
||||
Municipalities
|
|
872
|
|
|
|
|
168
|
|
|
|
|
0
|
|
|
|
|
1,040
|
|
|
||||
Mortgage- and asset-backed securities
|
|
161
|
|
|
|
|
12
|
|
|
|
|
0
|
|
|
|
|
173
|
|
|
||||
Public utilities
|
|
5,116
|
|
|
|
|
884
|
|
|
|
|
27
|
|
|
|
|
5,973
|
|
|
||||
Sovereign and supranational
|
|
267
|
|
|
|
|
73
|
|
|
|
|
0
|
|
|
|
|
340
|
|
|
||||
Banks/financial institutions
|
|
2,808
|
|
|
|
|
633
|
|
|
|
|
8
|
|
|
|
|
3,433
|
|
|
||||
Other corporate
|
|
25,384
|
|
|
|
|
2,620
|
|
|
|
|
418
|
|
|
|
|
27,586
|
|
|
||||
Total U.S. dollar-denominated
|
|
34,754
|
|
|
|
|
4,403
|
|
|
|
|
454
|
|
|
|
|
38,703
|
|
|
||||
Total securities available for sale
|
|
$
|
75,132
|
|
(1)
|
|
|
$
|
9,985
|
|
|
|
|
$
|
804
|
|
|
|
|
$
|
84,313
|
|
(1)
|
|
December 31, 2017
|
||||||||||||||||||||||
(In millions)
|
Cost or
Amortized Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||||||||||
Securities held to maturity, carried at amortized cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Yen-denominated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Japan government and agencies
|
|
$
|
21,331
|
|
|
|
|
$
|
5,160
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
26,491
|
|
|
Municipalities
|
|
357
|
|
|
|
|
105
|
|
|
|
|
0
|
|
|
|
|
462
|
|
|
||||
Mortgage- and asset-backed securities
|
|
26
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
|
27
|
|
|
||||
Public utilities
|
|
3,300
|
|
|
|
|
398
|
|
|
|
|
0
|
|
|
|
|
3,698
|
|
|
||||
Sovereign and supranational
|
|
1,523
|
|
|
|
|
312
|
|
|
|
|
0
|
|
|
|
|
1,835
|
|
|
||||
Banks/financial institutions
|
|
2,206
|
|
|
|
|
190
|
|
|
|
|
9
|
|
|
|
|
2,387
|
|
|
||||
Other corporate
|
|
2,687
|
|
|
|
|
485
|
|
|
|
|
0
|
|
|
|
|
3,172
|
|
|
||||
Total yen-denominated
|
|
31,430
|
|
|
|
|
6,651
|
|
|
|
|
9
|
|
|
|
|
38,072
|
|
|
||||
Total securities held to maturity
|
|
$
|
31,430
|
|
|
|
|
$
|
6,651
|
|
|
|
|
$
|
9
|
|
|
|
|
$
|
38,072
|
|
|
|
December 31, 2017
|
||||||||||||||||
(In millions)
|
|
|
|
|
|
|
Fair
Value |
||||||||||
Equity securities, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Yen-denominated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
695
|
|
|
U.S. dollar-denominated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
328
|
|
|
|
Total equity securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,023
|
|
|
(In millions)
|
Amortized
Cost |
|
Fair
Value |
|
||||||||
Available for sale:
(1)
|
|
|
|
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
348
|
|
|
|
|
$
|
359
|
|
|
|
Due after one year through five years
|
|
3,910
|
|
|
|
|
4,070
|
|
|
|
||
Due after five years through 10 years
|
|
11,813
|
|
|
|
|
11,912
|
|
|
|
||
Due after 10 years
|
|
62,547
|
|
|
|
|
69,193
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
317
|
|
|
|
|
347
|
|
|
|
||
Total fixed maturity securities available for sale
|
|
$
|
78,935
|
|
|
|
|
$
|
85,881
|
|
|
|
Held to maturity:
|
|
|
|
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
498
|
|
|
|
|
$
|
505
|
|
|
|
Due after one year through five years
|
|
353
|
|
|
|
|
366
|
|
|
|
||
Due after five years through 10 years
|
|
1,585
|
|
|
|
|
1,715
|
|
|
|
||
Due after 10 years
|
|
28,807
|
|
|
|
|
35,353
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
16
|
|
|
|
|
17
|
|
|
|
||
Total fixed maturity securities held to maturity
|
|
$
|
31,259
|
|
|
|
|
$
|
37,956
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
(In millions)
|
Credit
Rating |
|
Amortized
Cost |
|
Fair
Value |
|
Credit
Rating |
|
Amortized
Cost |
|
Fair
Value |
Japan National Government
(1)
|
A+
|
|
$51,881
|
|
$60,734
|
|
A
|
|
$48,399
|
|
$56,532
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Realized investment gains (losses):
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
(1)
|
|
|
|
|
|
|
|
|
||||||||
Available for sale:
|
|
|
|
|
|
|
|
|
||||||||
Gross gains from sales
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
Gross losses from sales
|
(71
|
)
|
|
(8
|
)
|
|
(73
|
)
|
|
(19
|
)
|
|
||||
Foreign exchange gains (losses)
|
29
|
|
|
(18
|
)
|
|
24
|
|
|
(50
|
)
|
|
||||
Other-than-temporary impairment losses
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
||||
Total fixed maturity securities
|
(32
|
)
|
|
(17
|
)
|
|
(29
|
)
|
|
(51
|
)
|
|
||||
Equity securities
(1),(2)
|
18
|
|
|
15
|
|
(3)
|
(28
|
)
|
|
34
|
|
(3)
|
||||
Loan loss reserves
|
(3
|
)
|
|
(2
|
)
|
|
(10
|
)
|
|
(3
|
)
|
|
||||
Derivatives and other:
|
|
|
|
|
|
|
|
|
||||||||
Derivative gains (losses)
|
(172
|
)
|
|
(51
|
)
|
|
(28
|
)
|
|
(103
|
)
|
|
||||
Foreign currency gains (losses)
|
192
|
|
|
(1
|
)
|
|
(36
|
)
|
|
(73
|
)
|
|
||||
Total derivatives and other
|
20
|
|
|
(52
|
)
|
|
(64
|
)
|
|
(176
|
)
|
|
||||
Total realized investment gains (losses)
|
$
|
3
|
|
|
$
|
(56
|
)
|
|
$
|
(131
|
)
|
|
$
|
(196
|
)
|
|
(In millions)
|
June 30, 2018
|
|
December 31,
2017 |
||||||||
Unrealized gains (losses) on securities available for sale
|
|
$
|
6,946
|
|
|
|
|
$
|
9,358
|
|
|
Deferred income taxes
|
|
(2,110
|
)
|
|
|
|
(3,394
|
)
|
|
||
Shareholders’ equity, unrealized gains (losses) on investment securities
|
|
$
|
4,836
|
|
|
|
|
$
|
5,964
|
|
|
|
June 30, 2018
|
||||||||||||||||||||||||||||||||||
|
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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and
agencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
$
|
78
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
74
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
4
|
|
|
|
|
$
|
0
|
|
|
Japan government and
agencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
3,647
|
|
|
|
|
150
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
3,647
|
|
|
|
|
150
|
|
|
||||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
261
|
|
|
|
|
1
|
|
|
|
|
261
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Yen-denominated
|
|
137
|
|
|
|
|
9
|
|
|
|
|
13
|
|
|
|
|
0
|
|
|
|
|
124
|
|
|
|
|
9
|
|
|
||||||
Mortgage- and asset-
backed securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
86
|
|
|
|
|
1
|
|
|
|
|
71
|
|
|
|
|
1
|
|
|
|
|
15
|
|
|
|
|
0
|
|
|
||||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
1,664
|
|
|
|
|
103
|
|
|
|
|
1,200
|
|
|
|
|
52
|
|
|
|
|
464
|
|
|
|
|
51
|
|
|
||||||
Yen-denominated
|
|
268
|
|
|
|
|
4
|
|
|
|
|
180
|
|
|
|
|
1
|
|
|
|
|
88
|
|
|
|
|
3
|
|
|
||||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
13
|
|
|
|
|
0
|
|
|
|
|
13
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Yen-denominated
|
|
286
|
|
|
|
|
30
|
|
|
|
|
286
|
|
|
|
|
30
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
696
|
|
|
|
|
30
|
|
|
|
|
561
|
|
|
|
|
20
|
|
|
|
|
135
|
|
|
|
|
10
|
|
|
||||||
Yen-denominated
|
|
2,344
|
|
|
|
|
136
|
|
|
|
|
1,478
|
|
|
|
|
50
|
|
|
|
|
866
|
|
|
|
|
86
|
|
|
||||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
13,044
|
|
|
|
|
980
|
|
|
|
|
8,391
|
|
|
|
|
362
|
|
|
|
|
4,653
|
|
|
|
|
618
|
|
|
||||||
Yen-denominated
|
|
409
|
|
|
|
|
6
|
|
|
|
|
294
|
|
|
|
|
4
|
|
|
|
|
115
|
|
|
|
|
2
|
|
|
||||||
Total
|
|
$
|
22,933
|
|
|
|
|
$
|
1,451
|
|
|
|
|
$
|
12,822
|
|
|
|
|
$
|
522
|
|
|
|
|
$
|
10,111
|
|
|
|
|
$
|
929
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||||||||
|
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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and
agencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
$
|
74
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
74
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
Japan government and
agencies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
5,255
|
|
|
|
|
271
|
|
|
|
|
1,264
|
|
|
|
|
9
|
|
|
|
|
3,991
|
|
|
|
|
262
|
|
|
||||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
129
|
|
|
|
|
12
|
|
|
|
|
10
|
|
|
|
|
0
|
|
|
|
|
119
|
|
|
|
|
12
|
|
|
||||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
785
|
|
|
|
|
27
|
|
|
|
|
221
|
|
|
|
|
3
|
|
|
|
|
564
|
|
|
|
|
24
|
|
|
||||||
Yen-denominated
|
|
83
|
|
|
|
|
6
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
83
|
|
|
|
|
6
|
|
|
||||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Yen-denominated
|
|
309
|
|
|
|
|
1
|
|
|
|
|
309
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
362
|
|
|
|
|
8
|
|
|
|
|
316
|
|
|
|
|
5
|
|
|
|
|
46
|
|
|
|
|
3
|
|
|
||||||
Yen-denominated
|
|
1,507
|
|
|
|
|
62
|
|
|
|
|
394
|
|
|
|
|
4
|
|
|
|
|
1,113
|
|
|
|
|
58
|
|
|
||||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. dollar-denominated
|
|
7,741
|
|
|
|
|
418
|
|
|
|
|
2,839
|
|
|
|
|
50
|
|
|
|
|
4,902
|
|
|
|
|
368
|
|
|
||||||
Yen-denominated
|
|
440
|
|
|
|
|
7
|
|
|
|
|
349
|
|
|
|
|
4
|
|
|
|
|
91
|
|
|
|
|
3
|
|
|
||||||
Total
|
|
$
|
16,685
|
|
|
|
|
$
|
813
|
|
|
|
|
$
|
5,776
|
|
|
|
|
$
|
77
|
|
|
|
|
$
|
10,909
|
|
|
|
|
$
|
736
|
|
|
(In millions)
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
Other investments:
|
|
|
|
|
|
|
|
||||
Transitional real estate loans
|
|
$
|
3,247
|
|
|
|
|
$
|
1,235
|
|
|
Commercial mortgage loans
|
|
966
|
|
|
|
|
908
|
|
|
||
Middle market loans
|
|
1,097
|
|
|
|
|
859
|
|
|
||
Policy loans
|
|
222
|
|
|
|
|
210
|
|
|
||
Short-term investments
|
|
1
|
|
|
|
|
57
|
|
|
||
Other
|
|
298
|
|
|
|
|
133
|
|
|
||
Total other investments
|
|
$
|
5,831
|
|
|
|
|
$
|
3,402
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Cost or Amortized
Cost |
|
Fair
Value |
|
Cost or Amortized
Cost |
|
Fair
Value |
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, available for sale
(1)
|
|
$
|
4,492
|
|
|
|
|
$
|
5,202
|
|
|
|
|
$
|
4,538
|
|
|
|
|
$
|
5,509
|
|
|
Equity securities
|
|
755
|
|
|
|
|
755
|
|
|
|
|
606
|
|
|
|
|
753
|
|
|
||||
Other investments
(2)
|
|
4,586
|
|
|
|
|
4,577
|
|
|
|
|
2,341
|
|
|
|
|
2,328
|
|
|
||||
Other assets
(3)
|
|
202
|
|
|
|
|
202
|
|
|
|
|
151
|
|
|
|
|
151
|
|
|
||||
Total assets of consolidated VIEs
|
|
$
|
10,035
|
|
|
|
|
$
|
10,736
|
|
|
|
|
$
|
7,636
|
|
|
|
|
$
|
8,741
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities
(3)
|
|
$
|
92
|
|
|
|
|
$
|
92
|
|
|
|
|
$
|
128
|
|
|
|
|
$
|
128
|
|
|
Total liabilities of consolidated VIEs
|
|
$
|
92
|
|
|
|
|
$
|
92
|
|
|
|
|
$
|
128
|
|
|
|
|
$
|
128
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
(In millions)
|
Amortized
Cost |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities, available for sale
(1)
|
|
$
|
4,870
|
|
|
|
|
$
|
5,358
|
|
|
|
|
$
|
5,004
|
|
|
|
|
$
|
5,724
|
|
|
Fixed maturity securities, held to maturity
|
|
2,469
|
|
|
|
|
2,795
|
|
|
|
|
2,549
|
|
|
|
|
2,929
|
|
|
||||
Other investments
|
|
106
|
|
|
|
|
106
|
|
|
|
|
55
|
|
|
|
|
55
|
|
|
||||
Total investments in VIEs not consolidated
|
|
$
|
7,445
|
|
|
|
|
$
|
8,259
|
|
|
|
|
$
|
7,608
|
|
|
|
|
$
|
8,708
|
|
|
4.
|
DERIVATIVE INSTRUMENTS
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
|
||||||||||||||||||||||||||||
(In millions)
|
|
|
Asset
Derivatives |
|
Liability
Derivatives |
|
|
Asset
Derivatives |
|
Liability
Derivatives |
|
||||||||||||||||||||||||
Hedge Designation/ Derivative
Type |
Notional
Amount |
|
Fair Value
|
|
Fair Value
|
Notional
Amount |
|
Fair Value
|
|
Fair Value
|
|
||||||||||||||||||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency swaps
|
|
$
|
75
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
(4
|
)
|
|
|
$
|
75
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
(8
|
)
|
|
|
Total cash flow hedges
|
|
75
|
|
|
|
|
1
|
|
|
|
|
(4
|
)
|
|
|
75
|
|
|
|
|
0
|
|
|
|
|
(8
|
)
|
|
|
||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forwards
|
|
3,310
|
|
|
|
|
17
|
|
|
|
|
(3
|
)
|
|
|
7,640
|
|
|
|
|
2
|
|
|
|
|
(221
|
)
|
|
|
||||||
Foreign currency options
|
|
9,225
|
|
|
|
|
0
|
|
|
|
|
(5
|
)
|
|
|
7,670
|
|
|
|
|
0
|
|
|
|
|
(2
|
)
|
|
|
||||||
Total fair value hedges
|
|
12,535
|
|
|
|
|
17
|
|
|
|
|
(8
|
)
|
|
|
15,310
|
|
|
|
|
2
|
|
|
|
|
(223
|
)
|
|
|
||||||
Net investment hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency forwards
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
5
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
||||||
Foreign currency options
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
434
|
|
|
|
|
12
|
|
|
|
|
(1
|
)
|
|
|
||||||
Total net investment hedge
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
439
|
|
|
|
|
12
|
|
|
|
|
(1
|
)
|
|
|
||||||
Non-qualifying strategies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency swaps
|
|
5,390
|
|
|
|
|
320
|
|
|
|
|
(223
|
)
|
|
|
5,386
|
|
|
|
|
296
|
|
|
|
|
(189
|
)
|
|
|
||||||
Foreign currency forwards
|
|
10,410
|
|
|
|
|
119
|
|
|
|
|
(132
|
)
|
|
|
3,683
|
|
|
|
|
20
|
|
|
|
|
(53
|
)
|
|
|
||||||
Foreign currency options
|
|
303
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
770
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
||||||
Credit default swaps
|
|
90
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
88
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
||||||
Total non-qualifying strategies
|
|
16,193
|
|
|
|
|
439
|
|
|
|
|
(355
|
)
|
|
|
9,927
|
|
|
|
|
317
|
|
|
|
|
(242
|
)
|
|
|
||||||
Total derivatives
|
|
$
|
28,803
|
|
|
|
|
$
|
457
|
|
|
|
|
$
|
(367
|
)
|
|
|
$
|
25,751
|
|
|
|
|
$
|
331
|
|
|
|
|
$
|
(474
|
)
|
|
|
Balance Sheet Location
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other assets
|
|
$
|
17,559
|
|
|
|
|
$
|
457
|
|
|
|
|
$
|
0
|
|
|
|
$
|
10,948
|
|
|
|
|
$
|
331
|
|
|
|
|
$
|
0
|
|
|
|
Other liabilities
|
|
11,244
|
|
|
|
|
0
|
|
|
|
|
(367
|
)
|
|
|
14,803
|
|
|
|
|
0
|
|
|
|
|
(474
|
)
|
|
|
||||||
Total derivatives
|
|
$
|
28,803
|
|
|
|
|
$
|
457
|
|
|
|
|
$
|
(367
|
)
|
|
|
$
|
25,751
|
|
|
|
|
$
|
331
|
|
|
|
|
$
|
(474
|
)
|
|
|
(In millions)
|
|
|
Hedging Derivatives
|
|
Hedged Items
|
|
|
||||||||||||||
Hedging Derivatives
|
Hedged Items
|
|
Total
Gains (Losses) |
|
Gains (Losses)
Excluded from Effectiveness Testing |
|
Gains (Losses)
Included in Effectiveness Testing |
|
Gains (Losses)
|
|
Ineffectiveness
Recognized for Fair Value Hedge |
||||||||||
Three Months Ended June 30, 2018:
|
|
|
|
|
|
|
|
||||||||||||||
Foreign currency
forwards |
Fixed maturity securities
|
|
$
|
(215
|
)
|
|
$
|
(30
|
)
|
|
$
|
(185
|
)
|
|
$
|
186
|
|
|
$
|
1
|
|
Foreign currency
options |
Fixed maturity securities
|
|
(2
|
)
|
|
(2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Six Months Ended June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency forwards
|
Fixed maturity securities
|
|
$
|
199
|
|
|
$
|
(69
|
)
|
|
$
|
268
|
|
|
$
|
(278
|
)
|
|
$
|
(10
|
)
|
Foreign currency options
|
Fixed maturity securities
|
|
(3
|
)
|
|
(3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Three Months Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency
forwards |
Fixed maturity and equity securities
|
|
$
|
(34
|
)
|
|
$
|
(50
|
)
|
|
$
|
16
|
|
|
$
|
(15
|
)
|
|
$
|
1
|
|
Foreign currency options
|
Fixed maturity securities
|
|
(7
|
)
|
|
(7
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Six Months Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Foreign currency forwards
|
Fixed maturity and equity securities
|
|
$
|
307
|
|
|
$
|
(98
|
)
|
|
$
|
405
|
|
|
$
|
(387
|
)
|
|
$
|
18
|
|
Foreign currency options
|
Fixed maturity securities
|
|
17
|
|
|
6
|
|
|
11
|
|
|
(10
|
)
|
|
1
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||||||||||||||||||||||||||
(In millions)
|
Realized Investment
Gains (Losses) |
Other
Comprehensive Income (Loss) (1) |
Realized Investment
Gains (Losses) |
Other
Comprehensive Income (Loss) (1) |
Realized Investment
Gains (Losses) |
Other
Comprehensive Income (Loss) (1) |
Realized Investment
Gains (Losses) |
Other
Comprehensive Income (Loss) (1) |
||||||||||||||||||||||||||||||||
Qualifying
hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash flow
hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign
currency
swaps
|
|
$
|
0
|
|
|
|
$
|
(2
|
)
|
|
|
$
|
0
|
|
|
|
$
|
(2
|
)
|
|
|
$
|
1
|
|
|
|
$
|
4
|
|
|
|
$
|
0
|
|
|
|
$
|
1
|
|
|
Total cash flow
hedges
|
|
0
|
|
|
|
(2
|
)
|
|
|
0
|
|
|
|
(2
|
)
|
|
|
1
|
|
|
|
4
|
|
|
|
0
|
|
|
|
1
|
|
|
||||||||
Fair value
hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign
currency
forwards
(2)
|
|
(29
|
)
|
|
|
|
|
|
(49
|
)
|
|
|
|
|
|
(79
|
)
|
|
|
|
|
|
(80
|
)
|
|
|
|
|
||||||||||||
Foreign
currency
options
(2)
|
|
(2
|
)
|
|
|
|
|
|
|
(7
|
)
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
7
|
|
|
|
|
|
||||||||||
Total fair value
hedges
|
|
(31
|
)
|
|
|
|
|
|
|
(56
|
)
|
|
|
|
|
|
(82
|
)
|
|
|
|
|
|
(73
|
)
|
|
|
|
|
|||||||||||
Net investment
hedge:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-
derivative
hedging
instruments
|
|
0
|
|
|
|
55
|
|
|
|
0
|
|
|
|
(1
|
)
|
|
|
0
|
|
|
|
(29
|
)
|
|
|
0
|
|
|
|
(18
|
)
|
|
||||||||
Foreign
currency
forwards
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(19
|
)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(28
|
)
|
|
||||||||
Foreign
currency
options
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
31
|
|
|
|
0
|
|
|
|
(8
|
)
|
|
|
0
|
|
|
|
8
|
|
|
||||||||
Total net
investment
hedge
|
|
0
|
|
|
|
55
|
|
|
|
0
|
|
|
|
11
|
|
|
|
0
|
|
|
|
(37
|
)
|
|
|
0
|
|
|
|
(38
|
)
|
|
||||||||
Non-qualifying
strategies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign
currency
swaps
|
|
14
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
26
|
|
|
|
|
|
||||||||||||
Foreign
currency
forwards
|
|
(154
|
)
|
|
|
|
|
|
|
(29
|
)
|
|
|
|
|
|
|
25
|
|
|
|
|
|
|
|
(56
|
)
|
|
|
|
|
|
||||||||
Foreign
currency
options
|
|
(1
|
)
|
|
|
|
|
|
0
|
|
|
|
|
|
|
0
|
|
|
|
|
|
|
0
|
|
|
|
|
|
||||||||||||
Total non-
qualifying
strategies
|
|
(141
|
)
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
|
||||||||||
Total
|
|
$
|
(172
|
)
|
|
|
$
|
53
|
|
|
|
$
|
(51
|
)
|
|
|
$
|
9
|
|
|
|
$
|
(28
|
)
|
|
|
$
|
(33
|
)
|
|
|
$
|
(103
|
)
|
|
|
$
|
(37
|
)
|
|
|
June 30, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||||
(In millions)
|
Notional Amount
of Derivatives |
Asset Derivatives
Fair Value |
Liability Derivatives
Fair Value |
Notional Amount
of Derivatives |
Asset Derivatives
Fair Value |
Liability Derivatives
Fair Value |
||||||||||||||||||||||||
Counterparties' credit rating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AA
|
|
$
|
5,122
|
|
|
|
$
|
78
|
|
|
|
$
|
(12
|
)
|
|
|
$
|
4,708
|
|
|
|
$
|
52
|
|
|
|
$
|
(37
|
)
|
|
A
|
|
23,237
|
|
|
|
375
|
|
|
|
(302
|
)
|
|
|
20,604
|
|
|
|
271
|
|
|
|
(370
|
)
|
|
||||||
BBB
|
|
444
|
|
|
|
4
|
|
|
|
(53
|
)
|
|
|
439
|
|
|
|
8
|
|
|
|
(67
|
)
|
|
||||||
Total
|
|
$
|
28,803
|
|
|
|
$
|
457
|
|
|
|
$
|
(367
|
)
|
|
|
$
|
25,751
|
|
|
|
$
|
331
|
|
|
|
$
|
(474
|
)
|
|
June 30, 2018
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
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
|
|
$
|
255
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
255
|
|
|
|
|
$
|
(138
|
)
|
|
|
$
|
(32
|
)
|
|
|
$
|
(82
|
)
|
|
|
|
$
|
3
|
|
|
Derivative
assets not subject
to a master netting
agreement or
offsetting
arrangement
|
|
202
|
|
|
|
|
|
|
|
|
202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
202
|
|
|
|||||||||||
Total derivative
assets
|
|
457
|
|
|
|
|
0
|
|
|
|
|
457
|
|
|
|
|
(138
|
)
|
|
|
(32
|
)
|
|
|
(82
|
)
|
|
|
|
205
|
|
|
|||||||
Securities lending
and similar
arrangements
|
|
3,638
|
|
|
|
|
0
|
|
|
|
|
3,638
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(3,638
|
)
|
|
|
|
0
|
|
|
|||||||
Total
|
|
$
|
4,095
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
4,095
|
|
|
|
|
$
|
(138
|
)
|
|
|
$
|
(32
|
)
|
|
|
$
|
(3,720
|
)
|
|
|
|
$
|
205
|
|
|
December 31, 2017
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
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
|
|
$
|
180
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
180
|
|
|
|
|
$
|
(82
|
)
|
|
|
$
|
0
|
|
|
|
$
|
(98
|
)
|
|
|
|
$
|
0
|
|
|
Derivative
assets not subject
to a master netting
agreement or
offsetting
arrangement
|
|
151
|
|
|
|
|
|
|
|
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
151
|
|
|
|||||||||||
Total derivative
assets
|
|
331
|
|
|
|
|
0
|
|
|
|
|
331
|
|
|
|
|
(82
|
)
|
|
|
0
|
|
|
|
(98
|
)
|
|
|
|
151
|
|
|
|||||||
Securities lending
and similar
arrangements
|
|
592
|
|
|
|
|
0
|
|
|
|
|
592
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
(592
|
)
|
|
|
|
0
|
|
|
|||||||
Total
|
|
$
|
923
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
923
|
|
|
|
|
$
|
(82
|
)
|
|
|
$
|
0
|
|
|
|
$
|
(690
|
)
|
|
|
|
$
|
151
|
|
|
June 30, 2018
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in Balance Sheet |
|
|
||||||||||||||||||||||||||||||||||
(In millions)
|
Gross Amount of Recognized Liabilities
|
|
Gross Amount
Offset in
Balance Sheet
|
|
Net Amount of Liabilities Presented
in Balance Sheet
|
|
Financial Instruments
|
|
Securities
Collateral
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||||||||||||||||
Derivative
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative
liabilities subject
to a master netting
agreement or
offsetting
arrangement
|
|
$
|
(276
|
)
|
|
|
|
$
|
0
|
|
|
|
|
$
|
(276
|
)
|
|
|
|
$
|
138
|
|
|
|
$
|
73
|
|
|
|
$
|
51
|
|
|
|
|
$
|
(14
|
)
|
|
Derivative
liabilities not
subject to a
master netting
agreement or
offsetting
arrangement
|
|
(91
|
)
|
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
|
|||||||||||
Total derivative
liabilities
|
|
(367
|
)
|
|
|
|
0
|
|
|
|
|
(367
|
)
|
|
|
|
138
|
|
|
|
73
|
|
|
|
51
|
|
|
|
|
(105
|
)
|
|
|||||||
Securities lending
and similar
arrangements
|
|
(3,712
|
)
|
|
|
|
0
|
|
|
|
|
(3,712
|
)
|
|
|
|
3,638
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(74
|
)
|
|
|||||||
Total
|
|
$
|
(4,079
|
)
|
|
|
|
$
|
0
|
|
|
|
|
$
|
(4,079
|
)
|
|
|
|
$
|
3,776
|
|
|
|
$
|
73
|
|
|
|
$
|
51
|
|
|
|
|
$
|
(179
|
)
|
|
December 31, 2017
|
|||||||||||||||||||||||||||||||||||||||
|
|
|
Gross Amounts Not Offset
in Balance Sheet |
|
|
||||||||||||||||||||||||||||||||||
(In millions)
|
Gross Amount of Recognized Liabilities
|
|
Gross Amount
Offset in
Balance Sheet
|
|
Net Amount of Liabilities Presented
in Balance Sheet
|
|
Financial Instruments
|
|
Securities
Collateral
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||||||||||||||||||||
Derivative
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Derivative
liabilities subject
to a master netting
agreement or
offsetting
arrangement
|
|
$
|
(346
|
)
|
|
|
|
$
|
0
|
|
|
|
|
$
|
(346
|
)
|
|
|
|
$
|
82
|
|
|
|
$
|
245
|
|
|
|
$
|
10
|
|
|
|
|
$
|
(9
|
)
|
|
Derivative
liabilities not
subject to a
master netting
agreement or
offsetting
arrangement
|
|
(128
|
)
|
|
|
|
|
|
|
|
(128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(128
|
)
|
|
|||||||||||
Total derivative
liabilities
|
|
(474
|
)
|
|
|
|
0
|
|
|
|
|
(474
|
)
|
|
|
|
82
|
|
|
|
245
|
|
|
|
10
|
|
|
|
|
(137
|
)
|
|
|||||||
Securities lending
and similar
arrangements
|
|
(606
|
)
|
|
|
|
0
|
|
|
|
|
(606
|
)
|
|
|
|
592
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
(14
|
)
|
|
|||||||
Total
|
|
$
|
(1,080
|
)
|
|
|
|
$
|
0
|
|
|
|
|
$
|
(1,080
|
)
|
|
|
|
$
|
674
|
|
|
|
$
|
245
|
|
|
|
$
|
10
|
|
|
|
|
$
|
(151
|
)
|
|
5.
|
FAIR VALUE MEASUREMENTS
|
|
June 30, 2018
|
||||||||||||||||||||||
(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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies
|
|
$
|
33,591
|
|
|
|
|
$
|
1,525
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
35,116
|
|
|
Municipalities
|
|
0
|
|
|
|
|
1,928
|
|
|
|
|
0
|
|
|
|
|
1,928
|
|
|
||||
Mortgage- and asset-backed securities
|
|
0
|
|
|
|
|
169
|
|
|
|
|
178
|
|
|
|
|
347
|
|
|
||||
Public utilities
|
|
0
|
|
|
|
|
7,258
|
|
|
|
|
106
|
|
|
|
|
7,364
|
|
|
||||
Sovereign and supranational
|
|
0
|
|
|
|
|
1,743
|
|
|
|
|
0
|
|
|
|
|
1,743
|
|
|
||||
Banks/financial institutions
|
|
0
|
|
|
|
|
9,159
|
|
|
|
|
23
|
|
|
|
|
9,182
|
|
|
||||
Other corporate
|
|
0
|
|
|
|
|
30,005
|
|
|
|
|
196
|
|
|
|
|
30,201
|
|
|
||||
Total fixed maturity securities
|
|
33,591
|
|
|
|
|
51,787
|
|
|
|
|
503
|
|
|
|
|
85,881
|
|
(1)
|
||||
Equity securities
(1)
|
|
1,011
|
|
|
|
|
75
|
|
|
|
|
17
|
|
|
|
|
1,103
|
|
(1)
|
||||
Other investments
|
|
1
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
1
|
|
|
||||
Cash and cash equivalents
|
|
3,847
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
3,847
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
0
|
|
|
|
|
119
|
|
|
|
|
202
|
|
|
|
|
321
|
|
|
||||
Foreign currency forwards
|
|
0
|
|
|
|
|
136
|
|
|
|
|
0
|
|
|
|
|
136
|
|
|
||||
Total other assets
|
|
0
|
|
|
|
|
255
|
|
|
|
|
202
|
|
|
|
|
457
|
|
|
||||
Total assets
|
|
$
|
38,450
|
|
|
|
|
$
|
52,117
|
|
|
|
|
$
|
722
|
|
|
|
|
$
|
91,289
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
$
|
0
|
|
|
|
|
$
|
135
|
|
|
|
|
$
|
92
|
|
|
|
|
$
|
227
|
|
|
Foreign currency forwards
|
|
0
|
|
|
|
|
135
|
|
|
|
|
0
|
|
|
|
|
135
|
|
|
||||
Foreign currency options
|
|
0
|
|
|
|
|
5
|
|
|
|
|
0
|
|
|
|
|
5
|
|
|
||||
Total liabilities
|
|
$
|
0
|
|
|
|
|
$
|
275
|
|
|
|
|
$
|
92
|
|
|
|
|
$
|
367
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||
(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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies
|
|
$
|
30,109
|
|
|
|
|
$
|
1,121
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
31,230
|
|
|
Municipalities
|
|
0
|
|
|
|
|
1,370
|
|
|
|
|
0
|
|
|
|
|
1,370
|
|
|
||||
Mortgage- and asset-backed securities
|
|
0
|
|
|
|
|
269
|
|
|
|
|
175
|
|
|
|
|
444
|
|
|
||||
Public utilities
|
|
0
|
|
|
|
|
7,886
|
|
|
|
|
68
|
|
|
|
|
7,954
|
|
|
||||
Sovereign and supranational
|
|
0
|
|
|
|
|
1,909
|
|
|
|
|
0
|
|
|
|
|
1,909
|
|
|
||||
Banks/financial institutions
|
|
0
|
|
|
|
|
8,908
|
|
|
|
|
25
|
|
|
|
|
8,933
|
|
|
||||
Other corporate
|
|
0
|
|
|
|
|
32,327
|
|
|
|
|
146
|
|
|
|
|
32,473
|
|
|
||||
Total fixed maturity securities
|
|
30,109
|
|
|
|
|
53,790
|
|
|
|
|
414
|
|
|
|
|
84,313
|
|
(1)
|
||||
Equity securities
|
|
1,001
|
|
|
|
|
6
|
|
|
|
|
16
|
|
|
|
|
1,023
|
|
|
||||
Other investments
|
|
57
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
57
|
|
|
||||
Cash and cash equivalents
|
|
3,491
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
3,491
|
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
0
|
|
|
|
|
146
|
|
|
|
|
150
|
|
|
|
|
296
|
|
|
||||
Foreign currency forwards
|
|
0
|
|
|
|
|
22
|
|
|
|
|
0
|
|
|
|
|
22
|
|
|
||||
Foreign currency options
|
|
0
|
|
|
|
|
12
|
|
|
|
|
0
|
|
|
|
|
12
|
|
|
||||
Credit default swaps
|
|
0
|
|
|
|
|
0
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
||||
Total other assets
|
|
0
|
|
|
|
|
180
|
|
|
|
|
151
|
|
|
|
|
331
|
|
|
||||
Total assets
|
|
$
|
34,658
|
|
|
|
|
$
|
53,976
|
|
|
|
|
$
|
581
|
|
|
|
|
$
|
89,215
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
$
|
0
|
|
|
|
|
$
|
69
|
|
|
|
|
$
|
128
|
|
|
|
|
$
|
197
|
|
|
Foreign currency forwards
|
|
0
|
|
|
|
|
274
|
|
|
|
|
0
|
|
|
|
|
274
|
|
|
||||
Foreign currency options
|
|
0
|
|
|
|
|
3
|
|
|
|
|
0
|
|
|
|
|
3
|
|
|
||||
Total liabilities
|
|
$
|
0
|
|
|
|
|
$
|
346
|
|
|
|
|
$
|
128
|
|
|
|
|
$
|
474
|
|
|
|
June 30, 2018
|
|||||||||||||||||||||||||||
(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
|
|
$
|
21,808
|
|
|
|
$
|
27,209
|
|
|
|
|
$
|
8
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
27,217
|
|
|
Municipalities
|
|
363
|
|
|
|
0
|
|
|
|
|
474
|
|
|
|
|
0
|
|
|
|
|
474
|
|
|
|||||
Mortgage and asset-backed
securities |
|
16
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
17
|
|
|
|
|
17
|
|
|
|||||
Public utilities
|
|
3,236
|
|
|
|
0
|
|
|
|
|
3,552
|
|
|
|
|
0
|
|
|
|
|
3,552
|
|
|
|||||
Sovereign and
supranational |
|
1,557
|
|
|
|
0
|
|
|
|
|
1,843
|
|
|
|
|
0
|
|
|
|
|
1,843
|
|
|
|||||
Banks/financial institutions
|
|
1,532
|
|
|
|
0
|
|
|
|
|
1,700
|
|
|
|
|
0
|
|
|
|
|
1,700
|
|
|
|||||
Other corporate
|
|
2,747
|
|
|
|
0
|
|
|
|
|
3,153
|
|
|
|
|
0
|
|
|
|
|
3,153
|
|
|
|||||
Other investments
(1)
|
|
5,329
|
|
|
|
0
|
|
|
|
|
19
|
|
|
|
|
5,297
|
|
|
|
|
5,316
|
|
|
|||||
Total assets
|
|
$
|
36,588
|
|
|
|
$
|
27,209
|
|
|
|
|
$
|
10,749
|
|
|
|
|
$
|
5,314
|
|
|
|
|
$
|
43,272
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other policyholders’ funds
|
|
$
|
7,140
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
7,060
|
|
|
|
|
$
|
7,060
|
|
|
Notes payable
(excluding capital leases) |
|
5,299
|
|
|
|
0
|
|
|
|
|
5,110
|
|
|
|
|
270
|
|
|
|
|
5,380
|
|
|
|||||
Total liabilities
|
|
$
|
12,439
|
|
|
|
$
|
0
|
|
|
|
|
$
|
5,110
|
|
|
|
|
$
|
7,330
|
|
|
|
|
$
|
12,440
|
|
|
|
December 31, 2017
|
|||||||||||||||||||||||||||
(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
|
|
$
|
21,331
|
|
|
|
$
|
26,491
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
26,491
|
|
|
Municipalities
|
|
357
|
|
|
|
0
|
|
|
|
|
462
|
|
|
|
|
0
|
|
|
|
|
462
|
|
|
|||||
Mortgage and asset-backed
securities |
|
26
|
|
|
|
0
|
|
|
|
|
8
|
|
|
|
|
19
|
|
|
|
|
27
|
|
|
|||||
Public utilities
|
|
3,300
|
|
|
|
0
|
|
|
|
|
3,698
|
|
|
|
|
0
|
|
|
|
|
3,698
|
|
|
|||||
Sovereign and
supranational |
|
1,523
|
|
|
|
0
|
|
|
|
|
1,835
|
|
|
|
|
0
|
|
|
|
|
1,835
|
|
|
|||||
Banks/financial institutions
|
|
2,206
|
|
|
|
0
|
|
|
|
|
2,387
|
|
|
|
|
0
|
|
|
|
|
2,387
|
|
|
|||||
Other corporate
|
|
2,687
|
|
|
|
0
|
|
|
|
|
3,172
|
|
|
|
|
0
|
|
|
|
|
3,172
|
|
|
|||||
Other investments
(1)
|
|
3,017
|
|
|
|
0
|
|
|
|
|
15
|
|
|
|
|
2,987
|
|
|
|
|
3,002
|
|
|
|||||
Total assets
|
|
$
|
34,447
|
|
|
|
$
|
26,491
|
|
|
|
|
$
|
11,577
|
|
|
|
|
$
|
3,006
|
|
|
|
|
$
|
41,074
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other policyholders’ funds
|
|
$
|
6,939
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
6,841
|
|
|
|
|
$
|
6,841
|
|
|
Notes payable
(excluding capital leases) |
|
5,267
|
|
|
|
0
|
|
|
|
|
5,288
|
|
|
|
|
265
|
|
|
|
|
5,553
|
|
|
|||||
Total liabilities
|
|
$
|
12,206
|
|
|
|
$
|
0
|
|
|
|
|
$
|
5,288
|
|
|
|
|
$
|
7,106
|
|
|
|
|
$
|
12,394
|
|
|
|
|
June 30, 2018
|
||||||||||||||||||||||
(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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
33,591
|
|
|
|
|
$
|
1,525
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
35,116
|
|
|
Total government and agencies
|
|
|
33,591
|
|
|
|
|
1,525
|
|
|
|
|
0
|
|
|
|
|
35,116
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,928
|
|
|
|
|
0
|
|
|
|
|
1,928
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
1,928
|
|
|
|
|
0
|
|
|
|
|
1,928
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
169
|
|
|
|
|
0
|
|
|
|
|
169
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
178
|
|
|
|
|
178
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
169
|
|
|
|
|
178
|
|
|
|
|
347
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
7,258
|
|
|
|
|
0
|
|
|
|
|
7,258
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
106
|
|
|
|
|
106
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
7,258
|
|
|
|
|
106
|
|
|
|
|
7,364
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,743
|
|
|
|
|
0
|
|
|
|
|
1,743
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,743
|
|
|
|
|
0
|
|
|
|
|
1,743
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
8,959
|
|
|
|
|
0
|
|
|
|
|
8,959
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
200
|
|
|
|
|
23
|
|
|
|
|
223
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
9,159
|
|
|
|
|
23
|
|
|
|
|
9,182
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
30,005
|
|
|
|
|
0
|
|
|
|
|
30,005
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
196
|
|
|
|
|
196
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
30,005
|
|
|
|
|
196
|
|
|
|
|
30,201
|
|
|
||||
Total securities available for sale
|
|
|
$
|
33,591
|
|
|
|
|
$
|
51,787
|
|
|
|
|
$
|
503
|
|
|
|
|
$
|
85,881
|
|
(1)
|
Equity securities, carried at fair value:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
961
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
1,036
|
|
|
Broker/other
|
|
|
50
|
|
|
|
|
0
|
|
|
|
|
17
|
|
|
|
|
67
|
|
|
||||
Total equity securities
|
|
|
$
|
1,011
|
|
|
|
|
$
|
75
|
|
|
|
|
$
|
17
|
|
|
|
|
$
|
1,103
|
|
(1)
|
|
|
June 30, 2018
|
||||||||||||||||||||||
(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 held to maturity, carried at amortized cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
27,209
|
|
|
|
|
$
|
8
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
27,217
|
|
|
Total government and agencies
|
|
|
27,209
|
|
|
|
|
8
|
|
|
|
|
0
|
|
|
|
|
27,217
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
474
|
|
|
|
|
0
|
|
|
|
|
474
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
474
|
|
|
|
|
0
|
|
|
|
|
474
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
17
|
|
|
|
|
17
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
17
|
|
|
|
|
17
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
3,552
|
|
|
|
|
0
|
|
|
|
|
3,552
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
3,552
|
|
|
|
|
0
|
|
|
|
|
3,552
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,843
|
|
|
|
|
0
|
|
|
|
|
1,843
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,843
|
|
|
|
|
0
|
|
|
|
|
1,843
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,700
|
|
|
|
|
0
|
|
|
|
|
1,700
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
1,700
|
|
|
|
|
0
|
|
|
|
|
1,700
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
3,153
|
|
|
|
|
0
|
|
|
|
|
3,153
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
3,153
|
|
|
|
|
0
|
|
|
|
|
3,153
|
|
|
||||
Total securities held to maturity
|
|
|
$
|
27,209
|
|
|
|
|
$
|
10,730
|
|
|
|
|
$
|
17
|
|
|
|
|
$
|
37,956
|
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||
(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:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
30,109
|
|
|
|
|
$
|
1,121
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
31,230
|
|
|
Total government and agencies
|
|
|
30,109
|
|
|
|
|
1,121
|
|
|
|
|
0
|
|
|
|
|
31,230
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,370
|
|
|
|
|
0
|
|
|
|
|
1,370
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
1,370
|
|
|
|
|
0
|
|
|
|
|
1,370
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
269
|
|
|
|
|
0
|
|
|
|
|
269
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
175
|
|
|
|
|
175
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
269
|
|
|
|
|
175
|
|
|
|
|
444
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
7,886
|
|
|
|
|
0
|
|
|
|
|
7,886
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
68
|
|
|
|
|
68
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
7,886
|
|
|
|
|
68
|
|
|
|
|
7,954
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,807
|
|
|
|
|
0
|
|
|
|
|
1,807
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
102
|
|
|
|
|
0
|
|
|
|
|
102
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,909
|
|
|
|
|
0
|
|
|
|
|
1,909
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
8,908
|
|
|
|
|
0
|
|
|
|
|
8,908
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
25
|
|
|
|
|
25
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
8,908
|
|
|
|
|
25
|
|
|
|
|
8,933
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
32,327
|
|
|
|
|
0
|
|
|
|
|
32,327
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
146
|
|
|
|
|
146
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
32,327
|
|
|
|
|
146
|
|
|
|
|
32,473
|
|
|
||||
Total fixed maturity securities
|
|
|
30,109
|
|
|
|
|
53,790
|
|
|
|
|
414
|
|
|
|
|
84,313
|
|
|
||||
Total securities available for sale
|
|
|
$
|
30,109
|
|
|
|
|
$
|
53,790
|
|
|
|
|
$
|
414
|
|
|
|
|
$
|
84,313
|
|
(1)
|
Equity securities, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
1,001
|
|
|
|
|
$
|
6
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
1,007
|
|
|
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
16
|
|
|
|
|
16
|
|
|
||||
Total equity securities
|
|
|
$
|
1,001
|
|
|
|
|
$
|
6
|
|
|
|
|
$
|
16
|
|
|
|
|
$
|
1,023
|
|
|
|
|
December 31, 2017
|
||||||||||||||||||||||
(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 held to maturity, carried at amortized cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Government and agencies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
$
|
26,491
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
26,491
|
|
|
Total government and agencies
|
|
|
26,491
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
26,491
|
|
|
||||
Municipalities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
462
|
|
|
|
|
0
|
|
|
|
|
462
|
|
|
||||
Total municipalities
|
|
|
0
|
|
|
|
|
462
|
|
|
|
|
0
|
|
|
|
|
462
|
|
|
||||
Mortgage- and asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
8
|
|
|
|
|
0
|
|
|
|
|
8
|
|
|
||||
Broker/other
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
19
|
|
|
|
|
19
|
|
|
||||
Total mortgage- and asset-backed securities
|
|
|
0
|
|
|
|
|
8
|
|
|
|
|
19
|
|
|
|
|
27
|
|
|
||||
Public utilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
3,698
|
|
|
|
|
0
|
|
|
|
|
3,698
|
|
|
||||
Total public utilities
|
|
|
0
|
|
|
|
|
3,698
|
|
|
|
|
0
|
|
|
|
|
3,698
|
|
|
||||
Sovereign and supranational:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
1,835
|
|
|
|
|
0
|
|
|
|
|
1,835
|
|
|
||||
Total sovereign and supranational
|
|
|
0
|
|
|
|
|
1,835
|
|
|
|
|
0
|
|
|
|
|
1,835
|
|
|
||||
Banks/financial institutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
2,387
|
|
|
|
|
0
|
|
|
|
|
2,387
|
|
|
||||
Total banks/financial institutions
|
|
|
0
|
|
|
|
|
2,387
|
|
|
|
|
0
|
|
|
|
|
2,387
|
|
|
||||
Other corporate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Third party pricing vendor
|
|
|
0
|
|
|
|
|
3,172
|
|
|
|
|
0
|
|
|
|
|
3,172
|
|
|
||||
Total other corporate
|
|
|
0
|
|
|
|
|
3,172
|
|
|
|
|
0
|
|
|
|
|
3,172
|
|
|
||||
Total securities held to maturity
|
|
|
$
|
26,491
|
|
|
|
|
$
|
11,562
|
|
|
|
|
$
|
19
|
|
|
|
|
$
|
38,072
|
|
|
Three Months Ended
June 30, 2018 |
||||||||||||||||||||||||||||||||
|
Fixed Maturities
|
|
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
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
186
|
|
|
$
|
83
|
|
|
$
|
24
|
|
|
$
|
143
|
|
|
$
|
16
|
|
|
$
|
154
|
|
|
$
|
1
|
|
|
$
|
607
|
|
|
Realized investment gains (losses) included
in earnings
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(42
|
)
|
|
(1
|
)
|
|
(43
|
)
|
|
||||||||
Unrealized gains (losses) included in other
comprehensive income (loss)
|
(8
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
(13
|
)
|
|
||||||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
0
|
|
|
24
|
|
|
0
|
|
|
56
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
81
|
|
|
||||||||
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Sales
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Settlements
|
0
|
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(2
|
)
|
|
||||||||
Transfers into Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Transfers out of Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Balance, end of period
|
$
|
178
|
|
|
$
|
106
|
|
|
$
|
23
|
|
|
$
|
196
|
|
|
$
|
17
|
|
|
$
|
110
|
|
|
$
|
0
|
|
|
$
|
630
|
|
|
Changes in unrealized gains (losses) relating
to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses) |
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(42
|
)
|
|
$
|
(1
|
)
|
|
$
|
(43
|
)
|
|
Three Months Ended
June 30, 2017 |
||||||||||||||||||||||||||||||||
|
Fixed Maturities
|
|
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
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
195
|
|
|
$
|
16
|
|
|
$
|
24
|
|
|
$
|
35
|
|
|
$
|
4
|
|
|
$
|
19
|
|
|
$
|
2
|
|
|
$
|
295
|
|
|
Realized investment gains (losses) included in
earnings |
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(10
|
)
|
|
0
|
|
|
(10
|
)
|
|
||||||||
Unrealized gains (losses) included in other
comprehensive income (loss) |
0
|
|
|
0
|
|
|
1
|
|
|
2
|
|
|
0
|
|
|
(2
|
)
|
|
0
|
|
|
1
|
|
|
||||||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
0
|
|
|
37
|
|
|
0
|
|
|
40
|
|
|
10
|
|
|
0
|
|
|
0
|
|
|
87
|
|
|
||||||||
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Sales
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Settlements
|
(7
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(7
|
)
|
|
||||||||
Transfers into Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Transfers out of Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Balance, end of period
|
$
|
188
|
|
|
$
|
53
|
|
|
$
|
25
|
|
|
$
|
77
|
|
|
$
|
14
|
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
366
|
|
|
Changes in unrealized gains (losses) relating
to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses) |
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(10
|
)
|
|
$
|
0
|
|
|
$
|
(10
|
)
|
|
Six Months Ended
June 30, 2018 |
||||||||||||||||||||||||||||||||
|
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
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
175
|
|
|
$
|
68
|
|
|
$
|
25
|
|
|
$
|
146
|
|
|
$
|
16
|
|
|
$
|
22
|
|
|
$
|
1
|
|
|
$
|
453
|
|
|
Realized investment gains (losses) included
in earnings |
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
84
|
|
|
(1
|
)
|
|
83
|
|
|
||||||||
Unrealized gains (losses) included in other
comprehensive income (loss) |
3
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
0
|
|
|
4
|
|
|
0
|
|
|
0
|
|
|
||||||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
0
|
|
|
40
|
|
|
0
|
|
|
56
|
|
|
1
|
|
|
0
|
|
|
0
|
|
|
97
|
|
|
||||||||
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Sales
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Settlements
|
0
|
|
|
0
|
|
|
0
|
|
|
(3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(3
|
)
|
|
||||||||
Transfers into Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Transfers out of Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Balance, end of period
|
$
|
178
|
|
|
$
|
106
|
|
|
$
|
23
|
|
|
$
|
196
|
|
|
$
|
17
|
|
|
$
|
110
|
|
|
$
|
0
|
|
|
$
|
630
|
|
|
Changes in unrealized gains (losses) relating
to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses) |
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
84
|
|
|
$
|
(1
|
)
|
|
$
|
83
|
|
|
Six Months Ended
June 30, 2017 |
||||||||||||||||||||||||||||||||
|
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
|
|
||||||||||||||||
Balance, beginning of period
|
$
|
198
|
|
|
$
|
16
|
|
|
$
|
25
|
|
|
$
|
0
|
|
|
$
|
3
|
|
|
$
|
(21
|
)
|
|
$
|
2
|
|
|
$
|
223
|
|
|
Realized investment gains (losses) included
in earnings
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
28
|
|
|
0
|
|
|
28
|
|
|
||||||||
Unrealized gains (losses) included in other
comprehensive income (loss)
|
6
|
|
|
0
|
|
|
0
|
|
|
2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
8
|
|
|
||||||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Purchases
|
0
|
|
|
37
|
|
|
0
|
|
|
75
|
|
|
12
|
|
|
0
|
|
|
0
|
|
|
124
|
|
|
||||||||
Issuances
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Sales
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
0
|
|
|
0
|
|
|
(1
|
)
|
|
||||||||
Settlements
|
(16
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(16
|
)
|
|
||||||||
Transfers into Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Transfers out of Level 3
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
||||||||
Balance, end of period
|
$
|
188
|
|
|
$
|
53
|
|
|
$
|
25
|
|
|
$
|
77
|
|
|
$
|
14
|
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
366
|
|
|
Changes in unrealized gains (losses) relating
to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses) |
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
28
|
|
|
$
|
0
|
|
|
$
|
28
|
|
|
June 30, 2018
|
|||||||||||||
(In millions)
|
|
Fair Value
|
|
Valuation Technique(s)
|
|
Unobservable Input
|
|
Range
(Weighted Average) |
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
|
$
|
178
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(c)
|
Public utilities
|
|
|
106
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(c)
|
|
Banks/financial institutions
|
|
|
23
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(c)
|
|
Other corporate
|
|
|
196
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(c)
|
|
Equity securities
|
|
|
17
|
|
|
|
Net asset value
|
|
Offered quotes
|
|
N/A
|
(c)
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
145
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.92%
|
(a)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.25% - .75%
|
(b)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
15 - 105 bps
|
|
||
|
|
|
57
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.92%
|
(a)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.25% - .75%
|
(b)
|
||
Total assets
|
|
|
$
|
722
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
$
|
88
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.92%
|
(a)
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.25% - .75%
|
(b)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
34 - 188 bps
|
|
||
|
|
|
4
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.92%
|
(a)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.25% - .75%
|
(b)
|
||
Total liabilities
|
|
|
$
|
92
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|||||||||||||
(In millions)
|
|
Fair Value
|
|
Valuation Technique(s)
|
|
Unobservable Input
|
|
Range
(Weighted Average) |
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Securities available for sale, carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Mortgage- and asset-backed securities
|
|
|
$
|
175
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(c)
|
Public utilities
|
|
|
68
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(c)
|
|
Banks/financial institutions
|
|
|
25
|
|
|
|
Consensus pricing
|
|
Offered quotes
|
|
N/A
|
(c)
|
|
Other corporate
|
|
|
146
|
|
|
|
Discounted cash flow
|
|
Credit spreads
|
|
N/A
|
(c)
|
|
Equity securities
|
|
|
16
|
|
|
|
Net asset value
|
|
Offered quotes
|
|
N/A
|
(c)
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
80
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.40% - 2.54%
|
(a)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.26% - .85%
|
(b)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
9 - 90 bps
|
|
||
|
|
|
70
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.40% - 2.54%
|
(a)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.26% - .85%
|
(b)
|
||
Credit default swaps
|
|
|
1
|
|
|
|
Discounted cash flow
|
|
Base correlation
|
|
46.33% - 49.65%
|
(d)
|
|
|
|
|
|
|
|
|
|
CDS spreads
|
|
25 bps
|
|
||
|
|
|
|
|
|
|
|
Recovery rate
|
|
37.24%
|
|
||
Total assets
|
|
|
$
|
581
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||
Foreign currency swaps
|
|
|
$
|
120
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.40% - 2.54%
|
(a)
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.26% - .85%
|
(b)
|
||
|
|
|
|
|
|
|
|
CDS spreads
|
|
13 - 157 bps
|
|
||
|
|
|
8
|
|
|
|
Discounted cash flow
|
|
Interest rates (USD)
|
|
2.40% - 2.54%
|
(a)
|
|
|
|
|
|
|
|
|
|
Interest rates (JPY)
|
|
.26% - .85%
|
(b)
|
||
Total liabilities
|
|
|
$
|
128
|
|
|
|
|
|
|
|
|
|
6.
|
POLICY LIABILITIES
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
||||||||
Unpaid supplemental health claims, beginning of period
|
|
$
|
4,041
|
|
|
$
|
3,854
|
|
|
|
|
$
|
3,881
|
|
|
$
|
3,707
|
|
|
|
Less reinsurance recoverables
|
|
31
|
|
|
30
|
|
|
|
|
28
|
|
|
27
|
|
|
|
||||
Net balance, beginning of period
|
|
4,010
|
|
|
3,824
|
|
|
|
|
3,853
|
|
|
3,680
|
|
|
|
||||
Add claims incurred during the period related to:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current year
|
|
1,779
|
|
|
1,772
|
|
|
|
|
3,621
|
|
|
3,520
|
|
|
|
||||
Prior years
|
|
(133
|
)
|
|
(138
|
)
|
|
|
|
(325
|
)
|
|
(260
|
)
|
|
|
||||
Total incurred
|
|
1,646
|
|
|
1,634
|
|
|
|
|
3,296
|
|
|
3,260
|
|
|
|
||||
Less claims paid during the period on claims incurred during:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current year
|
|
1,226
|
|
|
1,220
|
|
|
|
|
1,746
|
|
|
1,721
|
|
|
|
||||
Prior years
|
|
426
|
|
|
400
|
|
|
|
|
1,540
|
|
|
1,461
|
|
|
|
||||
Total paid
|
|
1,652
|
|
|
1,620
|
|
|
|
|
3,286
|
|
|
3,182
|
|
|
|
||||
Effect of foreign exchange rate changes on unpaid claims
|
|
(91
|
)
|
|
4
|
|
|
|
|
50
|
|
|
84
|
|
|
|
||||
Net balance, end of period
|
|
3,913
|
|
|
3,842
|
|
|
|
|
3,913
|
|
|
3,842
|
|
|
|
||||
Add reinsurance recoverables
|
|
29
|
|
|
30
|
|
|
|
|
29
|
|
|
30
|
|
|
|
||||
Unpaid supplemental health claims, end of period
|
|
3,942
|
|
|
3,872
|
|
|
|
|
3,942
|
|
|
3,872
|
|
|
|
||||
Unpaid life claims, end of period
|
|
582
|
|
|
409
|
|
|
|
|
582
|
|
|
409
|
|
|
|
||||
Total liability for unpaid policy claims
|
|
$
|
4,524
|
|
|
$
|
4,281
|
|
|
|
|
$
|
4,524
|
|
|
$
|
4,281
|
|
|
|
7.
|
REINSURANCE
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Direct premium income
|
|
$
|
4,793
|
|
|
|
|
$
|
4,752
|
|
|
|
|
$
|
9,626
|
|
|
|
|
$
|
9,476
|
|
|
Ceded to other companies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ceded Aflac Japan closed blocks
|
|
(126
|
)
|
|
|
|
(130
|
)
|
|
|
|
(256
|
)
|
|
|
|
(260
|
)
|
|
||||
Other
|
|
(16
|
)
|
|
|
|
(13
|
)
|
|
|
|
(30
|
)
|
|
|
|
(25
|
)
|
|
||||
Assumed from other companies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retrocession activities
|
|
53
|
|
|
|
|
55
|
|
|
|
|
107
|
|
|
|
|
109
|
|
|
||||
Other
|
|
2
|
|
|
|
|
1
|
|
|
|
|
3
|
|
|
|
|
3
|
|
|
||||
Net premium income
|
|
$
|
4,706
|
|
|
|
|
$
|
4,665
|
|
|
|
|
$
|
9,450
|
|
|
|
|
$
|
9,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct benefits and claims
|
|
$
|
3,106
|
|
|
|
|
$
|
3,117
|
|
|
|
|
$
|
6,225
|
|
|
|
|
$
|
6,246
|
|
|
Ceded benefits and change in reserves for future benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ceded Aflac Japan closed blocks
|
|
(114
|
)
|
|
|
|
(119
|
)
|
|
|
|
(231
|
)
|
|
|
|
(241
|
)
|
|
||||
Eliminations
|
|
11
|
|
|
|
|
13
|
|
|
|
|
23
|
|
|
|
|
26
|
|
|
||||
Other
|
|
(12
|
)
|
|
|
|
(11
|
)
|
|
|
|
(23
|
)
|
|
|
|
(22
|
)
|
|
||||
Assumed from other companies:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retrocession activities
|
|
49
|
|
|
|
|
52
|
|
|
|
|
101
|
|
|
|
|
106
|
|
|
||||
Eliminations
|
|
(11
|
)
|
|
|
|
(13
|
)
|
|
|
|
(23
|
)
|
|
|
|
(26
|
)
|
|
||||
Other
|
|
2
|
|
|
|
|
0
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
||||
Benefits and claims, net
|
|
$
|
3,031
|
|
|
|
|
$
|
3,039
|
|
|
|
|
$
|
6,073
|
|
|
|
|
$
|
6,091
|
|
|
8.
|
NOTES PAYABLE
|
(In millions)
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
2.40% senior notes due March 2020
|
|
$
|
549
|
|
|
|
|
$
|
548
|
|
|
4.00% senior notes due February 2022
|
|
348
|
|
|
|
|
348
|
|
|
||
3.625% senior notes due June 2023
|
|
697
|
|
|
|
|
697
|
|
|
||
3.625% senior notes due November 2024
|
|
746
|
|
|
|
|
745
|
|
|
||
3.25% senior notes due March 2025
|
|
446
|
|
|
|
|
446
|
|
|
||
2.875% senior notes due October 2026
|
|
297
|
|
|
|
|
297
|
|
|
||
6.90% senior notes due December 2039
|
|
220
|
|
|
|
|
220
|
|
|
||
6.45% senior notes due August 2040
|
|
254
|
|
|
|
|
254
|
|
|
||
4.00% senior notes due October 2046
|
|
394
|
|
|
|
|
394
|
|
|
||
Yen-denominated senior notes and subordinated debentures:
|
|
|
|
|
|
|
|
||||
.932% senior notes due January 2027 (principal amount 60.0 billion yen)
|
|
540
|
|
|
|
|
528
|
|
|
||
2.108% subordinated debentures due October 2047 (principal amount 60.0 billion yen)
|
|
538
|
|
|
|
|
526
|
|
|
||
Yen-denominated loans:
|
|
|
|
|
|
|
|
||||
Variable interest rate loan due September 2021 (.32% in 2018 and 2017, principal amount 5.0 billion yen)
|
|
45
|
|
|
|
|
44
|
|
|
||
Variable interest rate loan due September 2023 (.47% in 2018 and 2017, principal amount 25.0 billion yen)
|
|
225
|
|
|
|
|
220
|
|
|
||
Capitalized lease obligations payable through 2025
|
|
16
|
|
|
|
|
22
|
|
|
||
Total notes payable
|
|
$
|
5,315
|
|
|
|
|
$
|
5,289
|
|
|
9.
|
INCOME TAXES
|
10.
|
SHAREHOLDERS’ EQUITY
|
(In thousands of shares)
|
2018
|
|
2017
|
||
Common stock - issued:
|
|
|
|
||
Balance, beginning of period
|
1,345,762
|
|
|
1,342,498
|
|
Exercise of stock options and issuance of restricted shares
|
1,299
|
|
|
1,576
|
|
Balance, end of period
|
1,347,061
|
|
|
1,344,074
|
|
Treasury stock:
|
|
|
|
||
Balance, beginning of period
|
564,852
|
|
|
530,877
|
|
Purchases of treasury stock:
|
|
|
|
||
Open market
|
13,441
|
|
|
22,310
|
|
Other
|
328
|
|
|
346
|
|
Dispositions of treasury stock:
|
|
|
|
||
Shares issued to AFL Stock Plan
|
(400
|
)
|
|
(998
|
)
|
Exercise of stock options
|
(327
|
)
|
|
(414
|
)
|
Other
|
(105
|
)
|
|
(44
|
)
|
Balance, end of period
|
577,789
|
|
|
552,077
|
|
Shares outstanding, end of period
|
769,272
|
|
|
791,997
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
|
|||||||||||||||
(In thousands)
|
2018
|
|
2017
|
2018
|
|
2017
|
||||||||||||
Anti-dilutive share-based awards
|
|
48
|
|
|
|
|
838
|
|
|
|
28
|
|
|
|
|
740
|
|
|
Three Months Ended
June 30, 2018 |
|||||||||||||||||||||||||||||
(In millions)
|
Unrealized Foreign
Currency Translation Gains (Losses) |
|
Unrealized
Gains (Losses) on Investment Securities |
|
Unrealized
Gains (Losses) on Derivatives |
|
Pension
Liability Adjustment |
|
Total
|
||||||||||||||||||||
Balance, beginning of period
|
|
$
|
(1,303
|
)
|
|
|
|
$
|
5,206
|
|
|
|
|
$
|
(21
|
)
|
|
|
|
$
|
(197
|
)
|
|
|
|
$
|
3,685
|
|
|
Other comprehensive
income (loss) before reclassification (1) |
|
(463
|
)
|
|
|
|
(391
|
)
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
|
(857
|
)
|
|
|||||
Amounts reclassified from
accumulated other comprehensive income (loss) |
|
0
|
|
|
|
|
21
|
|
|
|
|
0
|
|
|
|
|
3
|
|
|
|
|
24
|
|
|
|||||
Net current-period other
comprehensive income (loss) |
|
(463
|
)
|
|
|
|
(370
|
)
|
|
|
|
(2
|
)
|
|
|
|
2
|
|
|
|
|
(833
|
)
|
|
|||||
Balance, end of period
|
|
$
|
(1,766
|
)
|
|
|
|
$
|
4,836
|
|
|
|
|
$
|
(23
|
)
|
|
|
|
$
|
(195
|
)
|
|
|
|
$
|
2,852
|
|
|
Three Months Ended
June 30, 2017 |
|||||||||||||||||||||||||||||
(In millions)
|
Unrealized Foreign
Currency Translation Gains (Losses) |
|
Unrealized
Gains (Losses) on Investment Securities |
|
Unrealized
Gains (Losses) on Derivatives |
|
Pension Liability Adjustment
|
|
Total
|
||||||||||||||||||||
Balance, beginning of period
|
|
$
|
(1,650
|
)
|
|
|
|
$
|
4,474
|
|
|
|
|
$
|
(22
|
)
|
|
|
|
$
|
(170
|
)
|
|
|
|
$
|
2,632
|
|
|
Other comprehensive
income (loss) before reclassification |
|
70
|
|
|
|
|
698
|
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
|
|
765
|
|
|
|||||
Amounts reclassified from
accumulated other comprehensive income (loss) |
|
0
|
|
|
|
|
1
|
|
|
|
|
0
|
|
|
|
|
3
|
|
|
|
|
4
|
|
|
|||||
Net current-period other
comprehensive income (loss) |
|
70
|
|
|
|
|
699
|
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
769
|
|
|
|||||
Balance, end of period
|
|
$
|
(1,580
|
)
|
|
|
|
$
|
5,173
|
|
|
|
|
$
|
(23
|
)
|
|
|
|
$
|
(169
|
)
|
|
|
|
$
|
3,401
|
|
|
Six Months Ended
June 30, 2018 |
|||||||||||||||||||||||||||||
(In millions)
|
Unrealized Foreign
Currency Translation Gains (Losses) |
|
Unrealized
Gains (Losses) on Investment Securities |
|
Unrealized
Gains (Losses) on Derivatives |
|
Pension
Liability Adjustment |
|
Total
|
||||||||||||||||||||
Balance, beginning of period
|
|
$
|
(1,750
|
)
|
|
|
|
$
|
5,964
|
|
|
|
|
$
|
(23
|
)
|
|
|
|
$
|
(163
|
)
|
|
|
|
$
|
4,028
|
|
|
Cumulative effect of change
in accounting principle - financial instruments |
|
0
|
|
|
|
|
(148
|
)
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
(148
|
)
|
|
|||||
Cumulative effect of change
in accounting principle - tax effects from tax reform |
|
(325
|
)
|
|
|
|
734
|
|
|
|
|
(3
|
)
|
|
|
|
(32
|
)
|
|
|
|
374
|
|
|
|||||
Other comprehensive
income (loss) before reclassification (1) |
|
309
|
|
|
|
|
(1,733
|
)
|
|
|
|
3
|
|
|
|
|
(5
|
)
|
|
|
|
(1,426
|
)
|
|
|||||
Amounts reclassified from
accumulated other comprehensive income (loss) |
|
0
|
|
|
|
|
19
|
|
|
|
|
0
|
|
|
|
|
5
|
|
|
|
|
24
|
|
|
|||||
Net current-period other
comprehensive income (loss) |
|
309
|
|
|
|
|
(1,714
|
)
|
|
|
|
3
|
|
|
|
|
0
|
|
|
|
|
(1,402
|
)
|
|
|||||
Balance, end of period
|
|
$
|
(1,766
|
)
|
|
|
|
$
|
4,836
|
|
|
|
|
$
|
(23
|
)
|
|
|
|
$
|
(195
|
)
|
|
|
|
$
|
2,852
|
|
|
Six Months Ended
June 30, 2017 |
|||||||||||||||||||||||||||||
(In millions)
|
Unrealized Foreign
Currency Translation Gains (Losses) |
|
Unrealized
Gains (Losses) on Investment Securities |
|
Unrealized
Gains (Losses) on Derivatives |
|
Pension Liability Adjustment
|
|
Total
|
||||||||||||||||||||
Balance, beginning of period
|
|
$
|
(1,983
|
)
|
|
|
|
$
|
4,805
|
|
|
|
|
$
|
(24
|
)
|
|
|
|
$
|
(168
|
)
|
|
|
|
$
|
2,630
|
|
|
Other comprehensive
income (loss) before reclassification |
|
403
|
|
|
|
|
357
|
|
|
|
|
1
|
|
|
|
|
(6
|
)
|
|
|
|
755
|
|
|
|||||
Amounts reclassified from
accumulated other comprehensive income (loss) |
|
0
|
|
|
|
|
11
|
|
|
|
|
0
|
|
|
|
|
5
|
|
|
|
|
16
|
|
|
|||||
Net current-period other
comprehensive income (loss) |
|
403
|
|
|
|
|
368
|
|
|
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
|
771
|
|
|
|||||
Balance, end of period
|
|
$
|
(1,580
|
)
|
|
|
|
$
|
5,173
|
|
|
|
|
$
|
(23
|
)
|
|
|
|
$
|
(169
|
)
|
|
|
|
$
|
3,401
|
|
|
(In millions)
|
Three Months Ended
June 30, 2018 |
|
||||
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 |
|
$
|
(2
|
)
|
|
Other-than-temporary impairment
losses realized |
|
|
(26
|
)
|
|
Other gains (losses)
|
|
|
|
(28
|
)
|
|
Total before tax
|
|
|
|
7
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(21
|
)
|
|
Net of tax
|
Amortization of defined benefit pension items:
|
|
|
|
|
||
Actuarial gains (losses)
|
|
$
|
(4
|
)
|
|
Acquisition and operating expenses
(2)
|
Prior service (cost) credit
|
|
0
|
|
|
Acquisition and operating expenses
(2)
|
|
|
|
1
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(3
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
(24
|
)
|
|
Net of tax
|
(In millions)
|
Three Months Ended
June 30, 2017 |
|
||||
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 |
|
$
|
(6
|
)
|
|
Other-than-temporary impairment
losses realized |
|
|
5
|
|
|
Other gains (losses)
|
|
|
|
(1
|
)
|
|
Total before tax
|
|
|
|
0
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(1
|
)
|
|
Net of tax
|
Amortization of defined benefit pension items:
|
|
|
|
|
||
Actuarial gains (losses)
|
|
$
|
(5
|
)
|
|
Acquisition and operating expenses
(2)
|
Prior service (cost) credit
|
|
0
|
|
|
Acquisition and operating expenses
(2)
|
|
|
|
2
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(3
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
(4
|
)
|
|
Net of tax
|
(In millions)
|
Six Months Ended
June 30, 2018 |
|
||||
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 |
|
$
|
(2
|
)
|
|
Other-than-temporary impairment
losses realized |
|
|
(24
|
)
|
|
Other gains (losses)
|
|
|
|
(26
|
)
|
|
Total before tax
|
|
|
|
7
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(19
|
)
|
|
Net of tax
|
Amortization of defined benefit pension items:
|
|
|
|
|
||
Actuarial gains (losses)
|
|
$
|
(8
|
)
|
|
Acquisition and operating expenses
(2)
|
Prior service (cost) credit
|
|
0
|
|
|
Acquisition and operating expenses
(2)
|
|
|
|
3
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(5
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
(24
|
)
|
|
Net of tax
|
(In millions)
|
Six Months Ended
June 30, 2017 |
|
||||
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 |
|
$
|
(16
|
)
|
|
Other-than-temporary impairment
losses realized |
|
|
(1
|
)
|
|
Other gains (losses)
|
|
|
|
(17
|
)
|
|
Total before tax
|
|
|
|
6
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(11
|
)
|
|
Net of tax
|
Amortization of defined benefit pension items:
|
|
|
|
|
||
Actuarial gains (losses)
|
|
$
|
(8
|
)
|
|
Acquisition and operating expenses
(2)
|
Prior service (cost) credit
|
|
0
|
|
|
Acquisition and operating expenses
(2)
|
|
|
|
3
|
|
|
Tax (expense) or benefit
(1)
|
|
|
|
$
|
(5
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
(16
|
)
|
|
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
|
|
6,057
|
|
|
|
|
5.4
|
|
|
|
$
|
89
|
|
|
|
|
$
|
28.26
|
|
|
Exercisable
|
|
4,365
|
|
|
|
|
4.4
|
|
|
|
71
|
|
|
|
|
26.77
|
|
|
(In thousands of shares)
|
|
Shares
|
|
Weighted-Average
Grant-Date Fair Value
Per Share
|
|||||
Restricted stock at December 31, 2017
|
|
3,635
|
|
|
|
$
|
32.40
|
|
|
Granted in 2018
|
|
993
|
|
|
|
44.10
|
|
|
|
Canceled in 2018
|
|
(69
|
)
|
|
|
33.38
|
|
|
|
Vested in 2018
|
|
(1,062
|
)
|
|
|
31.69
|
|
|
|
Restricted stock at June 30, 2018
|
|
3,497
|
|
|
|
$
|
35.91
|
|
|
12.
|
BENEFIT PLANS
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||||||||||||||
|
|
Pension Benefits
|
|
Other
|
||||||||||||||||||||||||||||||||
|
|
Japan
|
|
U.S.
|
|
Postretirement Benefits
|
||||||||||||||||||||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
Components of net periodic
benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
|
|
$
|
5
|
|
|
|
|
$
|
4
|
|
|
|
|
$
|
7
|
|
|
|
|
$
|
6
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
Interest cost
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
||||||
Expected return on plan
assets |
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(6
|
)
|
|
|
|
(5
|
)
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Amortization of net actuarial
loss |
|
|
0
|
|
|
|
|
1
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Amortization of prior service
cost (credit) |
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Net periodic (benefit) cost
|
|
|
$
|
5
|
|
|
|
|
$
|
6
|
|
|
|
|
$
|
13
|
|
|
|
|
$
|
13
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
1
|
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||||
|
|
Pension Benefits
|
|
Other
|
||||||||||||||||||||||||||||||||
|
|
Japan
|
|
U.S.
|
|
Postretirement Benefits
|
||||||||||||||||||||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||||||
Components of net periodic
benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
|
|
$
|
10
|
|
|
|
|
$
|
9
|
|
|
|
|
$
|
14
|
|
|
|
|
$
|
12
|
|
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
Interest cost
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
17
|
|
|
|
|
16
|
|
|
|
|
1
|
|
|
|
|
1
|
|
|
||||||
Expected return on plan
assets |
|
|
(3
|
)
|
|
|
|
(2
|
)
|
|
|
|
(13
|
)
|
|
|
|
(11
|
)
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Amortization of net actuarial
loss |
|
|
0
|
|
|
|
|
1
|
|
|
|
|
8
|
|
|
|
|
7
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Amortization of prior service
cost (credit) |
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||||
Net periodic (benefit) cost
|
|
|
$
|
10
|
|
|
|
|
$
|
11
|
|
|
|
|
$
|
26
|
|
|
|
|
$
|
24
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
1
|
|
|
13.
|
COMMITMENTS AND CONTINGENT LIABILITIES
|
• expect
|
• anticipate
|
• believe
|
• goal
|
• objective
|
• may
|
• should
|
• estimate
|
• intends
|
• projects
|
• will
|
• assumes
|
• potential
|
• target
|
• outlook
|
•
|
difficult conditions in global capital markets and the economy
|
•
|
exposure to significant interest rate risk
|
•
|
concentration of business in Japan
|
•
|
foreign currency fluctuations in the yen/dollar exchange rate
|
•
|
operation of the former Japan branch as a legal subsidiary
|
•
|
limited availability of acceptable yen-denominated investments
|
•
|
deviations in actual experience from pricing and reserving assumptions
|
•
|
ability to continue to develop and implement improvements in information technology systems
|
•
|
governmental actions for the purpose of stabilizing the financial markets
|
•
|
interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems
|
•
|
ongoing changes in the Company's industry
|
•
|
failure to comply with restrictions on patient privacy and information security
|
•
|
extensive regulation and changes in law or regulation by governmental authorities
|
•
|
tax rates applicable to the Company may change
|
•
|
defaults and credit downgrades of investments
|
•
|
ability to attract and retain qualified sales associates, brokers, employees and distribution partners
|
•
|
decline in creditworthiness of other financial institutions
|
•
|
subsidiaries' ability to pay dividends to Aflac Incorporated
|
•
|
decreases in the Company's financial strength or debt ratings
|
•
|
inherent limitations to risk management policies and procedures
|
•
|
concentration of the Company's investments in any particular single-issuer or sector
|
•
|
differing judgments applied to investment valuations
|
•
|
ability to effectively manage key executive succession
|
•
|
significant valuation judgments in determination of amount of impairments taken on the Company's investments
|
•
|
catastrophic events including, but not necessarily limited to, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, terrorism or other acts of violence, and damage incidental to such events
|
•
|
changes in U.S. and/or Japanese accounting standards
|
•
|
loss of consumer trust resulting from events external to the Company's operations
|
•
|
increased expenses and reduced profitability resulting from changes in assumptions for pension and other postretirement benefit plans
|
•
|
level and outcome of litigation
|
•
|
failure of internal controls or corporate governance policies and procedures
|
|
In Millions
|
|
Per Diluted Share
|
|
In Millions
|
|
Per Diluted Share
|
|
|||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
||||||||||||||||
Net earnings
|
$
|
832
|
|
|
$
|
713
|
|
|
$
|
1.07
|
|
|
$
|
.89
|
|
|
$
|
1,550
|
|
|
$
|
1,305
|
|
|
$
|
1.98
|
|
|
$
|
1.62
|
|
|
|
Items impacting net earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Realized investment (gains)
losses (2),(3),(4) |
(35
|
)
|
|
19
|
|
|
(.04
|
)
|
|
.02
|
|
|
63
|
|
|
128
|
|
|
.08
|
|
|
.16
|
|
|
|
||||||||
Other and non-recurring
(income) loss |
41
|
|
|
8
|
|
|
.05
|
|
|
.01
|
|
|
70
|
|
|
28
|
|
|
.09
|
|
|
.04
|
|
|
|
||||||||
Income tax (benefit)
expense on items excluded from adjusted earnings |
(4
|
)
|
|
(10
|
)
|
|
(.01
|
)
|
|
(.01
|
)
|
|
(28
|
)
|
|
(55
|
)
|
|
(.04
|
)
|
|
(.07
|
)
|
|
|
||||||||
Adjusted earnings
|
835
|
|
|
731
|
|
|
1.07
|
|
|
.92
|
|
|
1,655
|
|
|
1,406
|
|
|
2.12
|
|
|
1.75
|
|
|
|
||||||||
Current period foreign currency impact
(5)
|
(7
|
)
|
|
N/A
|
|
|
(.01
|
)
|
|
N/A
|
|
|
(29
|
)
|
|
N/A
|
|
|
(.04
|
)
|
|
N/A
|
|
|
|
||||||||
Adjusted earnings excluding
current period foreign currency impact (6) |
$
|
827
|
|
|
$
|
731
|
|
|
$
|
1.06
|
|
|
$
|
.92
|
|
|
$
|
1,627
|
|
|
$
|
1,406
|
|
|
$
|
2.08
|
|
|
$
|
1.75
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Net premium income
|
$
|
3,227
|
|
|
$
|
3,222
|
|
|
$
|
6,490
|
|
|
$
|
6,416
|
|
|
Net investment income:
|
|
|
|
|
|
|
|
|
||||||||
Yen-denominated investment income
|
326
|
|
|
322
|
|
|
657
|
|
|
646
|
|
|
||||
U.S. dollar-denominated investment income
|
335
|
|
|
291
|
|
|
647
|
|
|
577
|
|
|
||||
Net investment income
|
661
|
|
|
613
|
|
|
1,304
|
|
|
1,223
|
|
|
||||
Amortized hedge costs related to foreign currency denominated investments
|
55
|
|
|
56
|
|
|
110
|
|
|
108
|
|
|
||||
Net investment income, less amortized hedge costs
|
606
|
|
|
557
|
|
|
1,194
|
|
|
1,115
|
|
|
||||
Other income (loss)
|
11
|
|
|
10
|
|
|
22
|
|
|
20
|
|
|
||||
Total adjusted revenues
|
3,844
|
|
|
3,789
|
|
|
7,706
|
|
|
7,551
|
|
|
||||
Benefits and claims, net
|
2,237
|
|
|
2,272
|
|
|
4,530
|
|
|
4,559
|
|
|
||||
Adjusted expenses:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of deferred policy acquisition costs
|
180
|
|
|
167
|
|
|
348
|
|
|
322
|
|
|
||||
Insurance commissions
|
194
|
|
|
189
|
|
|
383
|
|
|
373
|
|
|
||||
Insurance and other expenses
|
397
|
|
|
370
|
|
|
791
|
|
|
737
|
|
|
||||
Total adjusted expenses
|
771
|
|
|
726
|
|
|
1,522
|
|
|
1,432
|
|
|
||||
Total benefits and expenses
|
3,008
|
|
|
2,998
|
|
|
6,052
|
|
|
5,991
|
|
|
||||
Pretax adjusted earnings
(1)
|
$
|
836
|
|
|
$
|
791
|
|
|
$
|
1,654
|
|
|
$
|
1,560
|
|
|
Weighted-average yen/dollar exchange rate
|
109.14
|
|
|
111.10
|
|
|
108.61
|
|
|
112.31
|
|
|
|
In Dollars
|
|
In Yen
|
||||||||||||||||||||
Percentage change over
previous period:
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
|
Three Months
Ended June 30, |
|
Six Months
Ended June 30, |
||||||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Net premium income
|
.2
|
%
|
|
(5.3
|
)%
|
|
1.2
|
%
|
|
(2.5
|
)%
|
|
(1.7
|
)%
|
|
(2.7
|
)%
|
|
(2.2
|
)%
|
|
(1.9
|
)%
|
Net investment income, less
amortized hedge costs |
8.8
|
|
|
(7.9
|
)
|
|
7.1
|
|
|
(6.7
|
)
|
|
6.4
|
|
|
(4.7
|
)
|
|
3.2
|
|
|
(5.5
|
)
|
Total adjusted revenues
|
1.5
|
|
|
(5.7
|
)
|
|
2.1
|
|
|
(3.1
|
)
|
|
(.5
|
)
|
|
(3.0
|
)
|
|
(1.4
|
)
|
|
(2.4
|
)
|
Pretax adjusted earnings
(1)
|
5.7
|
|
|
(1.4
|
)
|
|
6.0
|
|
|
(3.0
|
)
|
|
3.6
|
|
|
1.8
|
|
|
2.2
|
|
|
(2.0
|
)
|
|
Including Foreign
Currency Changes |
|
|
Excluding Foreign
Currency Changes
(2)
|
|
||||||||||||||||||||||||||
|
Three Months
|
|
|
Six Months
|
|
Three Months
|
|
|
Six Months
|
||||||||||||||||||||||
|
2018
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
||||
Net investment income, less
amortized hedge costs |
6.4
|
|
%
|
|
(4.7
|
)
|
%
|
|
3.2
|
|
%
|
|
(5.5
|
)
|
%
|
|
7.5
|
|
%
|
|
(5.9
|
)
|
%
|
|
5.0
|
|
%
|
|
(5.7
|
)
|
%
|
Total adjusted revenues
|
(.5
|
)
|
|
|
(3.0
|
)
|
|
|
(1.4
|
)
|
|
|
(2.4
|
)
|
|
|
(.3
|
)
|
|
|
(3.2
|
)
|
|
|
(1.1
|
)
|
|
|
(2.5
|
)
|
|
Pretax adjusted earnings
(1)
|
3.6
|
|
|
|
1.8
|
|
|
|
2.2
|
|
|
|
(2.0
|
)
|
|
|
4.3
|
|
|
|
1.0
|
|
|
|
3.5
|
|
|
|
(2.2
|
)
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
||||||
Ratios to total revenues:
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
Benefits and claims, net
|
58.2
|
%
|
|
59.9
|
%
|
|
58.8
|
%
|
|
60.4
|
%
|
|
Adjusted expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
4.7
|
|
|
4.4
|
|
|
4.5
|
|
|
4.3
|
|
|
Insurance commissions
|
5.0
|
|
|
5.0
|
|
|
5.0
|
|
|
4.9
|
|
|
Insurance and other expenses
|
10.3
|
|
|
9.8
|
|
|
10.3
|
|
|
9.7
|
|
|
Total adjusted expenses
|
20.0
|
|
|
19.2
|
|
|
19.7
|
|
|
18.9
|
|
|
Pretax adjusted earnings
(1)
|
21.8
|
|
|
20.9
|
|
|
21.5
|
|
|
20.7
|
|
|
Ratios to total premiums:
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and claims, net
|
69.3
|
%
|
|
70.5
|
%
|
|
69.8
|
%
|
|
71.1
|
%
|
|
Adjusted expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
5.6
|
|
|
5.2
|
|
|
5.4
|
|
|
5.0
|
|
|
|
In Dollars
|
In Yen
|
|||||||||||||||||||||||||
|
Three Months
|
|
Six Months
|
|
Three Months
|
Six Months
|
|
||||||||||||||||||||
(In millions of dollars and billions of yen)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
2018
|
|
2017
|
|
||||||||||||
New annualized premium sales
|
$
|
265
|
|
|
$
|
229
|
|
|
$
|
443
|
|
|
$
|
423
|
|
|
29.0
|
|
|
25.4
|
|
48.1
|
|
|
47.5
|
|
|
Increase (decrease) over prior period
|
16.1
|
%
|
|
(18.3
|
)%
|
|
4.7
|
%
|
|
(23.2
|
)%
|
|
14.0
|
%
|
|
(16.0
|
)%
|
1.4
|
%
|
|
(22.7
|
)%
|
|
|
Three Months
|
|
|
Six Months
|
|
||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Cancer
|
72.2
|
%
|
|
|
56.0
|
%
|
|
|
65.5
|
%
|
|
|
53.3
|
%
|
|
Medical
|
21.3
|
|
|
|
35.3
|
|
|
|
26.4
|
|
|
|
36.0
|
|
|
Income support
|
1.3
|
|
|
|
1.9
|
|
|
|
1.7
|
|
|
|
1.9
|
|
|
Ordinary life:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
WAYS
|
.5
|
|
|
|
.6
|
|
|
|
.6
|
|
|
|
.6
|
|
|
Child endowment
|
.3
|
|
|
|
.4
|
|
|
|
.3
|
|
|
|
.6
|
|
|
Other ordinary life
(1)
|
4.1
|
|
|
|
5.3
|
|
|
|
5.0
|
|
|
|
6.7
|
|
|
Other
|
.3
|
|
|
|
.5
|
|
|
|
.5
|
|
|
|
.9
|
|
|
Total
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
||||||||
Yen-denominated:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Japan government and agencies
|
|
$
|
212
|
|
|
$
|
687
|
|
|
|
$
|
3,399
|
|
|
$
|
3,228
|
|
|
Other fixed maturity securities
|
|
622
|
|
|
371
|
|
|
|
1,034
|
|
|
909
|
|
|
||||
Equity securities
|
|
8
|
|
|
3
|
|
|
|
106
|
|
|
152
|
|
|
||||
Total yen-denominated
|
|
$
|
842
|
|
|
$
|
1,061
|
|
|
|
$
|
4,539
|
|
|
$
|
4,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. dollar-denominated:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other fixed maturity securities
|
|
$
|
998
|
|
|
$
|
23
|
|
|
|
$
|
1,038
|
|
|
$
|
81
|
|
|
Infrastructure debt
|
|
0
|
|
|
64
|
|
|
|
0
|
|
|
94
|
|
|
||||
Bank loans
(1)
|
|
193
|
|
|
0
|
|
|
|
373
|
|
|
0
|
|
|
||||
Equity securities
|
|
39
|
|
|
144
|
|
|
|
80
|
|
|
151
|
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans
|
|
579
|
|
|
145
|
|
|
|
2,149
|
|
|
145
|
|
|
||||
Commercial mortgage loans
|
|
0
|
|
|
0
|
|
|
|
13
|
|
|
48
|
|
|
||||
Middle market loans
|
|
161
|
|
|
154
|
|
|
|
278
|
|
|
251
|
|
|
||||
Limited partnerships
|
|
45
|
|
|
0
|
|
|
|
172
|
|
|
0
|
|
|
||||
Total dollar-denominated
|
|
$
|
2,015
|
|
|
$
|
530
|
|
|
|
$
|
4,103
|
|
|
$
|
770
|
|
|
Total Aflac Japan purchases
|
|
$
|
2,857
|
|
|
$
|
1,591
|
|
|
|
$
|
8,642
|
|
|
$
|
5,059
|
|
|
|
Three Months
|
|
Six Months
|
|
|||||||||||||||
|
2018
|
|
|
|
2017
|
|
|
|
2018
|
|
|
|
2017
|
|
|
||||
Total purchases for the period (in millions)
(1)
|
$
|
2,812
|
|
|
|
$
|
1,591
|
|
|
|
$
|
8,470
|
|
|
|
$
|
5,059
|
|
|
New money yield
(1), (2)
|
3.55
|
|
%
|
|
2.25
|
|
%
|
|
2.88
|
|
%
|
|
1.54
|
|
%
|
||||
Return on average invested assets
(3)
|
2.30
|
|
|
|
2.28
|
|
|
|
2.29
|
|
|
|
2.31
|
|
|
||||
Portfolio book yield, including U.S. dollar-denominated investments,
end of period
(1)
|
2.59
|
|
%
|
|
2.55
|
|
%
|
|
2.59
|
|
%
|
|
2.55
|
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Net premium income
|
$
|
1,426
|
|
|
$
|
1,388
|
|
|
$
|
2,853
|
|
|
$
|
2,778
|
|
|
Net investment income
|
182
|
|
|
180
|
|
|
357
|
|
|
358
|
|
|
||||
Other income
|
2
|
|
|
2
|
|
|
4
|
|
|
3
|
|
|
||||
Total adjusted revenues
|
1,610
|
|
|
1,570
|
|
|
3,214
|
|
|
3,139
|
|
|
||||
Benefits and claims
|
744
|
|
|
715
|
|
|
1,441
|
|
|
1,425
|
|
|
||||
Adjusted expenses:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of deferred policy acquisition costs
|
123
|
|
|
116
|
|
|
269
|
|
|
256
|
|
|
||||
Insurance commissions
|
145
|
|
|
146
|
|
|
292
|
|
|
291
|
|
|
||||
Insurance and other expenses
|
258
|
|
|
263
|
|
|
535
|
|
|
527
|
|
|
||||
Total adjusted expenses
|
526
|
|
|
525
|
|
|
1,096
|
|
|
1,074
|
|
|
||||
Total benefits and expenses
|
1,270
|
|
|
1,240
|
|
|
2,537
|
|
|
2,499
|
|
|
||||
Pretax adjusted earnings
(1)
|
$
|
340
|
|
|
$
|
330
|
|
|
$
|
677
|
|
|
$
|
640
|
|
|
Percentage change over previous period:
|
|
|
|
|
|
|
|
|
||||||||
Net premium income
|
2.7
|
|
%
|
1.9
|
|
%
|
2.7
|
|
%
|
1.8
|
|
%
|
||||
Net investment income
|
1.1
|
|
|
2.3
|
|
|
(.3
|
)
|
|
2.3
|
|
|
||||
Total adjusted revenues
|
2.5
|
|
|
2.1
|
|
|
2.4
|
|
|
1.8
|
|
|
||||
Pretax adjusted earnings
(1)
|
3.0
|
|
|
13.4
|
|
|
5.8
|
|
|
2.7
|
|
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
||||||
Ratios to total revenues:
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Benefits and claims
|
46.2
|
%
|
|
45.6
|
%
|
|
44.8
|
%
|
|
45.4
|
%
|
Adjusted expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
7.6
|
|
|
7.4
|
|
|
8.4
|
|
|
8.1
|
|
Insurance commissions
|
9.0
|
|
|
9.3
|
|
|
9.1
|
|
|
9.3
|
|
Insurance and other expenses
|
16.0
|
|
|
16.7
|
|
|
16.6
|
|
|
16.8
|
|
Total adjusted expenses
|
32.7
|
|
|
33.4
|
|
|
34.1
|
|
|
34.2
|
|
Pretax adjusted earnin
gs
(1)
|
21.1
|
|
|
21.0
|
|
|
21.1
|
|
|
20.4
|
|
Ratios to total premiums:
|
|
|
|
|
|
|
|
|
|
|
|
Benefits and claims
|
52.2
|
%
|
|
51.5
|
%
|
|
50.5
|
%
|
|
51.3
|
%
|
Adjusted expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred policy acquisition costs
|
8.6
|
|
|
8.4
|
|
|
9.4
|
|
|
9.2
|
|
|
Three Months
|
|
Six Months
|
|
||||||||||||||||
(In millions)
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
||||||
New annualized premium sales
|
$
|
370
|
|
|
|
$
|
356
|
|
|
|
$
|
705
|
|
|
|
$
|
689
|
|
|
|
Increase (decrease) over prior period
|
3.9
|
|
%
|
|
2.4
|
|
%
|
|
2.3
|
|
%
|
|
2.1
|
|
%
|
|
|
Three Months
|
|
Six Months
|
|
||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
Accident
|
29.5
|
%
|
|
29.8
|
%
|
|
29.4
|
%
|
|
29.5
|
%
|
|
Short-term disability
|
23.5
|
|
|
23.9
|
|
|
23.3
|
|
|
24.5
|
|
|
Critical care
(1)
|
20.8
|
|
|
21.1
|
|
|
21.4
|
|
|
21.0
|
|
|
Hospital indemnity
|
15.1
|
|
|
14.0
|
|
|
15.0
|
|
|
14.0
|
|
|
Dental/vision
|
5.4
|
|
|
5.9
|
|
|
5.4
|
|
|
5.6
|
|
|
Life
|
5.7
|
|
|
5.3
|
|
|
5.5
|
|
|
5.4
|
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
||||||||||||
(In millions)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Other fixed maturity securities
|
|
$
|
560
|
|
|
$
|
226
|
|
|
$
|
679
|
|
|
$
|
485
|
|
|
Infrastructure debt
|
|
80
|
|
|
10
|
|
|
96
|
|
|
15
|
|
|
||||
Equity securities
|
|
26
|
|
|
36
|
|
|
49
|
|
|
38
|
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans
|
|
98
|
|
|
41
|
|
|
170
|
|
|
41
|
|
|
||||
Commercial mortgage loans
|
|
55
|
|
|
0
|
|
|
55
|
|
|
0
|
|
|
||||
Middle market loans
|
|
44
|
|
|
42
|
|
|
75
|
|
|
93
|
|
|
||||
Limited partnerships
|
|
4
|
|
|
0
|
|
|
26
|
|
|
0
|
|
|
||||
Total Aflac U.S. Purchases
|
|
$
|
867
|
|
|
$
|
355
|
|
|
$
|
1,150
|
|
|
$
|
672
|
|
|
|
Three Months
|
|
Six Months
|
|
|||||||||||||||
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||||||
Total purchases for period (in millions)
(1)
|
$
|
863
|
|
|
|
$
|
355
|
|
|
|
$
|
1,124
|
|
|
|
$
|
672
|
|
|
New money yield
(1), (2)
|
4.21
|
|
%
|
|
4.46
|
|
%
|
|
4.33
|
|
%
|
|
4.40
|
|
%
|
||||
Return on average invested assets
(3)
|
5.14
|
|
|
|
5.05
|
|
|
|
5.09
|
|
|
|
5.02
|
|
|
||||
Portfolio book yield, end of period
(1)
|
5.53
|
|
%
|
|
5.54
|
|
%
|
|
5.53
|
|
%
|
|
5.54
|
|
%
|
|
|
Aflac Japan
|
|
|
Aflac U.S.
|
|
||||||||||||||||
(In millions)
|
June 30,
2018 |
|
December 31,
2017 |
June 30,
2018 |
|
December 31,
2017 |
||||||||||||||||
Available for sale, fixed maturity securities,
at fair value (1) |
|
$
|
71,655
|
|
|
|
|
$
|
69,338
|
|
|
|
$
|
12,837
|
|
|
|
|
$
|
13,606
|
|
|
Held to maturity, fixed maturity securities,
at amortized cost |
|
31,259
|
|
|
|
|
31,430
|
|
|
|
0
|
|
|
|
|
0
|
|
|
||||
Equity securities
(1)
|
|
890
|
|
|
|
|
868
|
|
|
|
149
|
|
|
|
|
92
|
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans
|
|
2,892
|
|
|
|
|
986
|
|
|
|
355
|
|
|
|
|
249
|
|
|
||||
Commercial mortgage loans
|
|
772
|
|
|
|
|
767
|
|
|
|
194
|
|
|
|
|
141
|
|
|
||||
Middle market loans
|
|
750
|
|
|
|
|
527
|
|
|
|
347
|
|
|
|
|
332
|
|
|
||||
Policy loans
|
|
210
|
|
|
|
|
198
|
|
|
|
12
|
|
|
|
|
12
|
|
|
||||
Short-term investments
|
|
0
|
|
|
|
|
57
|
|
|
|
1
|
|
|
|
|
0
|
|
|
||||
Other
|
|
238
|
|
|
|
|
98
|
|
|
|
55
|
|
|
|
|
31
|
|
|
||||
Total other investments
|
|
4,862
|
|
|
|
|
2,633
|
|
|
|
964
|
|
|
|
|
765
|
|
|
||||
Total investments
|
|
108,666
|
|
|
|
|
104,269
|
|
|
|
13,950
|
|
|
|
|
14,463
|
|
|
||||
Cash and cash equivalents
|
|
1,588
|
|
|
|
|
636
|
|
|
|
1,195
|
|
|
|
|
1,011
|
|
|
||||
Total investments and cash
(2)
|
|
$
|
110,254
|
|
|
|
|
$
|
104,905
|
|
|
|
$
|
15,145
|
|
|
|
|
$
|
15,474
|
|
|
|
|
June 30, 2018
|
|
|
|
December 31, 2017
|
|
||||||||||||
|
Amortized
Cost |
|
Fair
Value |
|
Amortized
Cost |
|
Fair
Value |
||||||||||||
AAA
|
|
1.1
|
%
|
|
|
|
1.1
|
%
|
|
|
|
1.0
|
%
|
|
|
|
.9
|
%
|
|
AA
|
|
4.0
|
|
|
|
|
4.1
|
|
|
|
|
3.9
|
|
|
|
|
4.0
|
|
|
A
|
|
66.9
|
|
|
|
|
68.5
|
|
|
|
|
65.8
|
|
|
|
|
66.9
|
|
|
BBB
|
|
23.3
|
|
|
|
|
21.9
|
|
|
|
|
24.0
|
|
|
|
|
23.3
|
|
|
BB or lower
|
|
4.7
|
|
|
|
|
4.4
|
|
|
|
|
5.3
|
|
|
|
|
4.9
|
|
|
Total
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
|
|
100.0
|
%
|
|
(In millions)
|
Credit
Rating |
|
Amortized
Cost |
|
Fair
Value |
|
Unrealized
Loss |
||||||||||||||
Diamond Offshore Drilling Inc.
|
|
B
|
|
|
|
$
|
142
|
|
|
|
|
$
|
98
|
|
|
|
|
$
|
(44
|
)
|
|
AXA
|
|
BBB
|
|
|
|
294
|
|
|
|
|
253
|
|
|
|
|
(41
|
)
|
|
|||
Noble Holdings International Ltd.
|
|
CCC
|
|
|
|
98
|
|
|
|
|
68
|
|
|
|
|
(30
|
)
|
|
|||
The Sultanate of Oman
|
|
BBB
|
|
|
|
316
|
|
|
|
|
286
|
|
|
|
|
(30
|
)
|
|
|||
Time Warner Cable Inc.
|
|
BBB
|
|
|
|
118
|
|
|
|
|
101
|
|
|
|
|
(17
|
)
|
|
|||
Kommunal Landspensjonskasse (KLP)
|
|
BBB
|
|
|
|
135
|
|
|
|
|
118
|
|
|
|
|
(17
|
)
|
|
|||
Baker Hughes Inc.
|
|
A
|
|
|
|
121
|
|
|
|
|
105
|
|
|
|
|
(16
|
)
|
|
|||
Oracle Corp.
|
|
A
|
|
|
|
208
|
|
|
|
|
193
|
|
|
|
|
(15
|
)
|
|
|||
Microsoft Corp.
|
|
AAA
|
|
|
|
217
|
|
|
|
|
202
|
|
|
|
|
(15
|
)
|
|
|||
National Oilwell Varco Inc.
|
|
BBB
|
|
|
|
83
|
|
|
|
|
70
|
|
|
|
|
(13
|
)
|
|
|
June 30, 2018
|
||||||||||||||
(In millions)
|
Par
Value |
|
Amortized
Cost |
|
Fair
Value |
|
Unrealized
Gain (Loss) |
||||||||
Republic of South Africa
|
$
|
452
|
|
|
$
|
452
|
|
|
$
|
474
|
|
|
$
|
22
|
|
Investcorp Capital Limited
|
385
|
|
|
385
|
|
|
396
|
|
|
11
|
|
||||
Navient Corp.
|
301
|
|
|
160
|
|
|
226
|
|
|
66
|
|
||||
KLM Royal Dutch Airlines
|
271
|
|
|
199
|
|
|
221
|
|
|
22
|
|
||||
Republic of Tunisia
|
190
|
|
|
111
|
|
|
135
|
|
|
24
|
|
||||
Telecom Italia SpA
|
181
|
|
|
181
|
|
|
227
|
|
|
46
|
|
||||
Barclays Bank PLC
|
181
|
|
|
112
|
|
|
164
|
|
|
52
|
|
||||
Generalitat de Catalunya
|
145
|
|
|
53
|
|
|
136
|
|
|
83
|
|
||||
Transnet
|
136
|
|
|
136
|
|
|
136
|
|
|
0
|
|
||||
Diamond Offshore Drilling Inc.
|
124
|
|
|
142
|
|
|
98
|
|
|
(44
|
)
|
||||
IKB Deutsche Industriebank AG
|
118
|
|
|
50
|
|
|
109
|
|
|
59
|
|
||||
Alcoa, Inc.
|
100
|
|
|
84
|
|
|
97
|
|
|
13
|
|
||||
Noble Holdings International Ltd.
|
94
|
|
|
98
|
|
|
68
|
|
|
(30
|
)
|
||||
Petrobras International Finance Company
|
84
|
|
|
85
|
|
|
79
|
|
|
(6
|
)
|
||||
EMC Corp.
|
80
|
|
|
80
|
|
|
73
|
|
|
(7
|
)
|
||||
Teva Pharmaceuticals
|
76
|
|
|
74
|
|
|
69
|
|
|
(5
|
)
|
||||
Teck Resources Ltd.
|
70
|
|
|
76
|
|
|
66
|
|
|
(10
|
)
|
||||
Transocean Inc.
|
68
|
|
|
72
|
|
|
63
|
|
|
(9
|
)
|
||||
Nabors Industries Inc.
|
59
|
|
|
56
|
|
|
60
|
|
|
4
|
|
||||
National Gas Co. Trinidad and Tobago
|
52
|
|
|
50
|
|
|
53
|
|
|
3
|
|
||||
Votorantim Overseas Trading IV Ltd.
|
50
|
|
|
49
|
|
|
53
|
|
|
4
|
|
||||
CF Industries Inc.
|
50
|
|
|
49
|
|
|
47
|
|
|
(2
|
)
|
||||
Other Issuers (below $50 million in par value)
|
278
|
|
|
272
|
|
|
264
|
|
|
(8
|
)
|
||||
Subtotal
(1)
|
3,545
|
|
|
3,026
|
|
|
3,314
|
|
|
288
|
|
||||
Senior secured bank loans
|
1,586
|
|
|
1,609
|
|
|
1,583
|
|
|
(26
|
)
|
||||
High yield corporate bonds
|
516
|
|
|
513
|
|
|
509
|
|
|
(4
|
)
|
||||
Middle market loans, net of reserves
(2)
|
1,113
|
|
|
1,097
|
|
|
1,095
|
|
|
(2
|
)
|
||||
Grand Total
|
$
|
6,760
|
|
|
$
|
6,245
|
|
|
$
|
6,501
|
|
|
$
|
256
|
|
(Amortized cost, in millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
Privately issued securities as a percentage of total investment securities
|
|
22.2
|
%
|
|
|
|
23.4
|
%
|
|
||
Privately issued securities held by Aflac Japan
|
|
$
|
21,975
|
|
|
|
|
$
|
22,354
|
|
|
Privately issued securities held by Aflac Japan as a percentage of total
investment securities |
|
19.7
|
%
|
|
|
|
20.8
|
%
|
|
(Amortized cost, in millions)
|
June 30,
2018 |
|
December 31,
2017 |
||||||||
Privately issued reverse-dual currency securities
|
|
$
|
5,549
|
|
|
|
|
$
|
5,669
|
|
|
Publicly issued collateral structured as reverse-dual currency securities
|
|
1,664
|
|
|
|
|
1,390
|
|
|
||
Total reverse-dual currency securities
|
|
$
|
7,213
|
|
|
|
|
$
|
7,059
|
|
|
Reverse-dual currency securities as a percentage of total investment
securities |
|
6.5
|
%
|
|
|
|
6.6
|
%
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
||||||||||||
(In millions)
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities (excluding bank loans)
(1)
|
$
|
17,563
|
|
|
$
|
17,671
|
|
|
$
|
17,972
|
|
|
$
|
19,314
|
|
|
Fixed maturity securities - bank loans (floating rate)
|
1,835
|
|
|
1,799
|
|
|
1,936
|
|
|
1,865
|
|
|
||||
Fixed maturity securities - economically converted to yen
|
1,686
|
|
|
2,335
|
|
|
1,650
|
|
|
2,549
|
|
|
||||
Equity securities
(1)
|
187
|
|
|
187
|
|
|
147
|
|
|
173
|
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
Transitional real estate loans (floating rate)
|
2,892
|
|
|
2,910
|
|
|
986
|
|
|
984
|
|
|
||||
Commercial mortgage loans
|
772
|
|
|
742
|
|
|
767
|
|
|
753
|
|
|
||||
Middle market loans (floating rate)
|
750
|
|
|
753
|
|
|
527
|
|
|
530
|
|
|
||||
Alternative investments
|
238
|
|
|
238
|
|
|
97
|
|
|
97
|
|
|
||||
Total U.S. dollar-denominated investments in Aflac Japan
|
$
|
25,923
|
|
|
$
|
26,635
|
|
|
$
|
24,082
|
|
|
$
|
26,265
|
|
|
|
Three Months
|
|
Six Months
|
||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
FX forward notional at end of period (in billions of dollars)
(2)
|
9.9
|
|
10.9
|
|
9.9
|
|
10.9
|
Weighted average original tenor (in months)
(3)
|
29.5
|
|
27.1
|
|
29.5
|
|
27.1
|
Weighted average remaining tenor (in months)
(4)
|
19.8
|
|
20.6
|
|
19.8
|
|
20.6
|
Annualized amortized hedge costs (in basis points)
(5)
|
223
|
|
209
|
|
225
|
|
190
|
Amortized hedge costs for period (in millions of dollars)
|
(55)
|
|
(56)
|
|
(110)
|
|
(108)
|
(In millions)
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
% Change
|
|||||||||
Aflac Japan
|
|
$
|
6,342
|
|
|
|
|
$
|
6,150
|
|
|
|
|
3.1
|
%
|
(1)
|
Aflac U.S.
|
|
3,398
|
|
|
|
|
3,355
|
|
|
|
|
1.3
|
|
|
||
Total
|
|
$
|
9,740
|
|
|
|
|
$
|
9,505
|
|
|
|
|
2.5
|
%
|
|
(In millions)
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
% Change
|
|||||||||
Aflac Japan
|
|
$
|
92,125
|
|
|
|
|
$
|
89,132
|
|
|
|
|
3.4
|
%
|
(1)
|
Aflac U.S.
|
|
10,789
|
|
|
|
|
10,625
|
|
|
|
|
1.5
|
|
|
||
Other
|
|
167
|
|
|
|
|
138
|
|
|
|
|
21.0
|
|
|
||
Intercompany eliminations
(2)
|
|
(771
|
)
|
|
|
|
(748
|
)
|
|
|
|
3.1
|
|
|
||
Total
|
|
$
|
102,310
|
|
|
|
|
$
|
99,147
|
|
|
|
|
3.2
|
%
|
|
(In millions)
|
2018
|
|
2017
|
|
||||
Dividends declared or paid by Aflac
|
$
|
258
|
|
|
$
|
800
|
|
|
Management fees paid by Aflac Japan and Aflac U.S.
|
98
|
|
|
156
|
|
|
(In millions)
|
2018
|
|
2017
|
|
||||
Operating activities
|
$
|
2,807
|
|
|
$
|
3,165
|
|
|
Investing activities
|
(1,443
|
)
|
|
(2,517
|
)
|
|
||
Financing activities
|
(988
|
)
|
|
(1,231
|
)
|
|
||
Exchange effect on cash and cash equivalents
|
(20
|
)
|
|
(12
|
)
|
|
||
Net change in cash and cash equivalents
|
$
|
356
|
|
|
$
|
(595
|
)
|
|
(In millions)
|
2018
|
|
2017
|
|
||||
Aflac Japan
|
$
|
2,947
|
|
|
$
|
2,509
|
|
|
Aflac U.S. and other operations
|
(140
|
)
|
|
656
|
|
|
||
Total
|
$
|
2,807
|
|
|
$
|
3,165
|
|
|
(In millions)
|
2018
|
|
2017
|
|
||||
Aflac Japan
|
$
|
(889
|
)
|
|
$
|
(2,073
|
)
|
|
Aflac U.S. and other operations
|
(554
|
)
|
|
(444
|
)
|
|
||
Total
|
$
|
(1,443
|
)
|
|
$
|
(2,517
|
)
|
|
(In millions of dollars and thousands of shares)
|
2018
|
|
2017
|
|
||||
Treasury stock purchases
|
$
|
601
|
|
|
$
|
813
|
|
|
Number of shares purchased:
|
|
|
|
|
||||
Open market
|
13,441
|
|
|
22,310
|
|
|
||
Other
|
328
|
|
|
346
|
|
|
||
Total shares purchased
|
13,769
|
|
|
22,656
|
|
|
(In millions of dollars and thousands of shares)
|
2018
|
|
2017
|
|
||||
Stock issued from treasury:
|
|
|
|
|
||||
Cash financing
|
$
|
12
|
|
|
$
|
34
|
|
|
Noncash financing
|
15
|
|
|
66
|
|
|
||
Total stock issued from treasury
|
$
|
27
|
|
|
$
|
100
|
|
|
Number of shares issued
|
832
|
|
|
1,452
|
|
|
(In millions)
|
2018
|
|
2017
|
|
||||
Dividends paid in cash
|
$
|
396
|
|
|
$
|
328
|
|
|
Dividends through issuance of treasury shares
|
8
|
|
|
16
|
|
|
||
Total dividends to shareholders
|
$
|
404
|
|
|
$
|
344
|
|
|
(In millions of dollars and billions of yen)
|
2018
|
|
2017
|
|
||||
Aflac Japan management fees paid to Parent Company
|
$
|
40
|
|
|
$
|
55
|
|
|
Expenses allocated to Aflac Japan (in dollars)
|
8
|
|
|
56
|
|
|
||
Aflac Japan profit remittances to the Parent Company or Aflac U.S. (in dollars)
|
312
|
|
|
275
|
|
|
||
Aflac Japan profit remittances to the Parent Company or Aflac U.S. (in yen)
|
33.4
|
|
|
31.3
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total
Number of Shares Purchased |
|
Average
Price Paid Per Share |
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
Maximum
Number of Shares that May Yet Be Purchased Under the Plans or Programs |
|
|||||
January 1 - January 31
|
2,370,284
|
|
|
$
|
44.31
|
|
|
2,370,284
|
|
|
95,626,488
|
|
|
February 1 - February 28
|
2,349,600
|
|
|
44.70
|
|
|
2,349,600
|
|
|
93,276,888
|
|
|
|
March 1 - March 31
|
1,937,161
|
|
|
44.49
|
|
|
1,920,400
|
|
|
91,356,488
|
|
|
|
April 1 - April 30
|
2,082,500
|
|
|
44.62
|
|
|
2,082,500
|
|
|
89,273,988
|
|
|
|
May 1 - May 31
|
2,558,472
|
|
|
45.17
|
|
|
2,542,900
|
|
|
86,731,088
|
|
|
|
June 1 - June 30
|
2,175,100
|
|
|
44.99
|
|
|
2,175,100
|
|
|
84,555,988
|
|
|
|
Total
|
13,473,117
|
|
(2)
|
$
|
44.73
|
|
|
13,440,784
|
|
|
84,555,988
|
|
(1)
|
Item 6.
|
Exhibits
|
(1)
|
Includes the following materials contained in this Quarterly Report on Form 10-Q for the period ended June 30, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to the Consolidated Financial Statements
|
|||
|
|
|
|
|
|
Aflac Incorporated
|
|
|
|
August 3, 2018
|
|
/s/
Frederick J. Crawford
|
|
|
(Frederick J. Crawford)
|
|
|
Executive Vice President,
Chief Financial Officer
|
|
|
|
August 3, 2018
|
|
/s/
June Howard
|
|
|
(June Howard)
|
|
|
Senior Vice President, Financial Services; Chief Accounting Officer
|
/s/ KPMG LLP
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Aflac Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
Date:
|
August 3, 2018
|
|
/s/
Daniel P. Amos
|
|
|
|
Daniel P. Amos
|
|
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Aflac Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
Date:
|
August 3, 2018
|
|
/s/ Frederick J. Crawford
|
|
|
|
Frederick J. Crawford
|
|
|
|
Executive Vice President, Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/
Daniel P. Amos
|
||
Name:
|
|
Daniel P. Amos
|
Title:
|
|
Chief Executive Officer
|
Date:
|
|
August 3, 2018
|
/s/
Frederick J. Crawford
|
||
Name:
|
|
Frederick J. Crawford
|
Title:
|
|
Chief Financial Officer
|
Date:
|
|
August 3, 2018
|