AFLAC INC – 10-K – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements included in this section constitute forward-looking
statements within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements are made based on management's current
expectations and beliefs concerning future developments and their potential
effects upon the Company. The Company's actual results may differ, possibly
materially, from expectations or estimates reflected in such forward-looking
statements. Certain important factors that could cause actual results to differ,
possibly materially, from expectations or estimates reflected in such
forward-looking statements can be found in the "Risk Factors" and
"Forward-Looking Statements" sections herein.

                                 MD&A OVERVIEW

The following financial review provides a discussion of the Company's results of
operations and financial condition, as well as a summary of the Company's
critical accounting estimates. This section should be read in conjunction with
Part I - Item 1. Business and the audited consolidated financial statements and
accompanying notes included in Part II - Item 8. Financial Statements and
Supplementary Data of this report. This MD&A is divided into the following
sections:

                                                              Page
                     Executive Summary                        33
                     Industry Trends                          33
                     Outlook                                  34
                     Results of Operations                    35
                     Investments                              49
                     Hedging Activities                       53
                     Policy Liabilities                       56
                     Benefit Plans                            57
                     Policyholder Protection                  57
                     Liquidity and Capital Resources          57
                     Critical Accounting Estimates            64



The Company elected to omit discussion on the earliest of the three years
covered by the consolidated financial statements presented in Item 8. Financial
Statements and Supplementary Data. Readers should refer to Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations located
in the Company's   Annual Report on Form 10-K for the year ended December 31,
2021  , filed on February 23, 2022, for reference to discussion of the year
ended December 31, 2020, the earliest of the three years presented. Amounts
reported in this MD&A may not foot due to rounding.



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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

                               EXECUTIVE SUMMARY

Market Conditions

The impact of the COVID-19 global pandemic on the Company continues to evolve
and the continued path of the global economic recovery remains uncertain given
the potential longer-term impacts that have resulted from or are coincidental
with the pandemic. For example, economic conditions have acted as headwinds to
sales and earned premiums in 2022. Further, continued widening of the
differential between U.S. and Japan interest rates has contributed to a
weakening of the yen, which has the effect of suppressing the Company's current
period results in relation to the comparable prior period. For additional
information see the Result of Operations by Segment section of this MD&A.

Performance Highlights

For the full year of 2022, total revenues were down 11.8% to $19.5 billion,
compared with $22.1 billion for the full year of 2021. Net earnings were $4.2
billion, or $6.59 per diluted share, for the full year of 2022, compared with
$4.3 billion, or $6.39 per diluted share, for the full year of 2021, reflecting
an income tax benefit of $452 million from the release of a deferred tax
liability.

Results for 2022 included pretax net investment gains of $363 million, compared
with net investment gains of $468 million in 2021. Net investment gains in 2022
included an increase in credit loss allowances of $36 million; $273 million of
net gains from certain derivative and foreign currency gains or losses; $341
million of net losses on equity securities; and $467 million of net gains from
sales and redemptions.

The average yen/dollar exchange rate(1) in 2022 was 130.17, or 15.7% weaker than
the rate of 109.79 in 2021.

Adjusted earnings(2) for the full year of 2022 were $3.4 billion, or $5.33 per
diluted share, compared with $4.0 billion, or $5.94 per diluted share, in 2021.
The weaker yen/dollar exchange rate negatively impacted adjusted earnings per
diluted share by $.34.

Total investments and cash at December 31, 2022 were $117.4 billion, compared
with $143.0 billion at December 31, 2021. The decline in the portfolio was
principally driven by the weaker yen and higher interest rates. In 2022, Aflac
Incorporated repurchased $2.4 billion, or 39.2 million of its common shares. At
December 31, 2022, the Company had 116.6 million remaining shares authorized for
repurchase.

Shareholders' equity was $22.4 billion, or $36.35 per share, at December 31,
2022, compared with $33.3 billion, or $50.99 per share, at December 31, 2021.
Shareholders' equity at December 31, 2022 included a net unrealized loss on
investment securities and derivatives of $729 million, compared with a net
unrealized gain of $9.6 billion at December 31, 2021. Shareholders' equity at
December 31, 2022 also included an unrealized foreign currency translation loss
of $3.6 billion, compared with an unrealized foreign currency translation loss
of $2.0 billion at December 31, 2021. The annualized return on average
shareholders' equity in 2022 was 15.1%.

Shareholders' equity excluding accumulated other comprehensive income (AOCI)
(adjusted book value)(2) was $26.8 billion, or $43.51 per share at December 31,
2022, compared with $25.9 billion, or $39.65 per share, at December 31, 2021.
The annualized adjusted return on equity excluding foreign currency impact(2) in
2022 was 13.7%.

(1) Yen/U.S. dollar exchange rates are based on the published MUFG Bank, Ltd.
telegraphic transfer middle rate (TTM).
(2) See the Results of Operations section of this MD&A for a definition of this
non-U.S. GAAP financial measure.

                                INDUSTRY TRENDS

The Company is impacted by financial markets, economic conditions, regulatory
oversight and a variety of trends that affect the industries where it competes.

Financial and Economic Environment

The Company's business and results of operations are materially affected by
conditions in the global capital markets and the economy generally. Stressed
conditions, volatility and disruptions in global capital markets, particular
markets, or financial asset classes can have an adverse effect on the Company,
in part because the Company has a large investment portfolio and its insurance
liabilities and derivatives are sensitive to changing market factors. See Item
1A. Risk Factors for the risk factor entitled, "Difficult conditions in global
capital markets and the economy, including those caused by


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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
COVID-19, could have a material adverse effect on the Company's investments,
capital position, revenue, profitability, and liquidity and harm the Company's
business."

Demographics

Aflac Japan Segment

With Japan's aging population and the rise in healthcare costs, supplemental
health care insurance products remain attractive. However, due to the aging
population and decline in birthrate, new opportunities for customer demographics
are not as readily available. Japan's existing customers and potential customers
seek products that are easily understood, cost-effective and can be accessed
through technology-enabled devices.

Aflac U.S. Segment

Customer demographics continue to evolve and new opportunities present
themselves in different customer segments such as the millennial and
multicultural markets. Customer expectations and preferences are changing.
Trends indicate existing customers and potential customers seek cost-effective
solutions that are easily understood and can be accessed through
technology-enabled devices. Additionally, income protection and the health needs
of retiring baby boomers are continuing to shape the insurance industry.

Regulatory Environment

See Item 1. Business - Aflac Japan Government Regulation and Aflac U.S.
Government Regulation for a discussion of regulatory developments that may
impact the Company and the associated risks.

Competitive Environment

See Item 1. Business - Aflac Japan Competitive Markets and Aflac U.S.
Competitive Markets for a discussion of the competitive environment and the
basis on which the Company competes in each of its segments.

                                  2023 OUTLOOK

The Company's strategy to drive long-term shareholder value is to pursue growth
through product development and distribution expansion and to achieve
efficiencies by modernizing its technology and streamlining its operations.

The Company's objectives in 2023 are to maintain strong pre-tax margins with
increased sales production through product refreshment in its Aflac Japan
segment and to begin realizing benefits from its buy to build initiatives and
other platform investments, manage expenses and strengthen the number of career
agents for Aflac U.S. The Company believes that its strategy of positioning
itself for future growth and efficiency while defending and leveraging its
market-leading position, powerful brand recognition and diverse distribution in
Japan and the U.S. will provide support toward these objectives.

The Company announced a 5.0% increase in the first quarter 2023 dividend
compared to the prior quarter, and it intends to maintain strong capital ratios
in Aflac Japan and Aflac U.S. in support of its commitment to shareholder
dividends while remaining tactical in its deployment of capital in the form of
share repurchases and opportunistic investments. The Company intends to maintain
a minimum SMR of 500% for Aflac Japan and a target combined RBC over time of
approximately 400% for Aflac U.S., consistent with the Company's risk management
practices.

Aflac Japan Segment

For Aflac Japan, the Company anticipates that the shift in premiums over the
last several years from first sector savings products to third sector cancer and
medical products and first sector protection products, will continue to result
in moderately lower benefit ratios in the Aflac Japan segment. The Company
expects that benefit and expense ratios will continue to experience some level
of revenue pressure due to the impact of paid up policies and reduced sales
compared to years prior to the COVID-19 pandemic. For the 2023 through 2024
period, the Company expects a decline in Aflac Japan net earned premiums in the
low single digit range after adjusting for the impact of deferred profit
liability reclassification and an expected new internal reinsurance program,
with a benefit ratio in the range of 66% to 68% and an expense ratio in the
range of 20% to 22%.



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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Aflac U.S. Segment

For Aflac U.S., the Company expects benefit ratios to normalize in 2023 and for
expense ratios to decline over the next five years as the Company begins to
realize the benefits from investments into U.S. platforms, continues to scale
its acquisitions, and focuses on earned premium growth. For the 2023 through
2024 period, the Company expects Aflac U.S. net earned premium growth of 3% to
5% on a compound annual growth rate basis, with a benefit ratio in the range of
47% to 50% and an expense ratio in the range of 37% to 40%.

Corporate and other

The Company expects Corporate and other results to reflect stable net investment
income in 2023 compared to 2022, assuming that U.S. interest rates remain
stable.

For important disclosures applicable to statements made in this 2023 Outlook,
please see the statement on Forward-Looking Information at the beginning of Item
1. Business, the Risk Factors identified in Item 1A. and this Item 7. MD&A.

                             RESULTS OF OPERATIONS

The Company earns its revenues principally from insurance premiums and
investments. The Company's operating expenses primarily consist of insurance
benefits provided and reserves established for anticipated future insurance
benefits, general business expenses, commissions and other costs of selling and
servicing its products. Profitability for the Company depends principally on its
ability to price its insurance products at a level that enables the Company to
earn a margin over the costs associated with providing benefits and
administering those products. Profitability also depends on, among other items,
actuarial and policyholder behavior experience on insurance products, and the
Company's ability to attract and retain customer assets, generate and maintain
favorable investment results, effectively deploy capital and utilize tax
capacity, and manage expenses.

This document includes references to the Company's financial performance
measures which are not calculated in accordance with United States generally
accepted accounting principles (U.S. GAAP) (non-U.S. GAAP). The financial
measures exclude items that the Company believes may obscure the underlying
fundamentals and trends in insurance operations because they tend to be driven
by general economic conditions and events or related to infrequent activities
not directly associated with insurance operations.

Due to the size of Aflac Japan, where the functional currency is the Japanese
yen, fluctuations in the yen/dollar exchange rate can have a significant effect
on reported results. In periods when the yen weakens, translating yen into
dollars results in fewer dollars being reported. When the yen strengthens,
translating yen into dollars results in more dollars being reported.
Consequently, yen weakening has the effect of suppressing current period results
in relation to the comparable prior period, while yen strengthening has the
effect of magnifying current period results in relation to the comparable prior
period. A significant portion of the Company's business is conducted in yen and
never converted into dollars but translated into dollars for U.S. GAAP reporting
purposes, which results in foreign currency impact to earnings, cash flows and
book value on a U.S. GAAP basis. Management evaluates the Company's financial
performance both including and excluding the impact of foreign currency
translation to monitor, respectively, cumulative currency impacts and the
currency-neutral operating performance over time. The average yen/dollar
exchange rate is based on the published MUFG Bank, Ltd. telegraphic transfer
middle rate (TTM).

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

•Adjusted earnings are adjusted revenues less benefits and adjusted expenses.
Adjusted earnings per share (basic or diluted) are the adjusted earnings for the
period divided by the weighted average outstanding shares (basic or diluted) for
the period presented. The adjustments to both revenues and expenses account for
certain items that cannot be predicted or that are outside management's control.
Adjusted revenues are U.S. GAAP total revenues excluding adjusted net investment
gains and losses. Adjusted expenses are U.S. GAAP total acquisition and
operating expenses including the impact of interest cash flows from derivatives
associated with notes payable but excluding any nonrecurring or other items not
associated with the normal course of the Company's insurance operations and that
do not reflect the Company's underlying business performance. Management uses
adjusted earnings and adjusted earnings per diluted share to evaluate the
financial performance of the Company's insurance operations on a consolidated
basis and believes that a presentation of these financial measures is vitally
important to an understanding of the underlying profitability drivers and trends
of the Company's insurance business. The most comparable U.S. GAAP financial
measures for adjusted earnings and adjusted earnings per share (basic or
diluted) are net earnings and net earnings per share, respectively.


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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

•Adjusted net investment gains and losses are net investment gains and losses
adjusted for i) amortized hedge cost/income related to foreign currency exposure
management strategies and certain derivative activity, ii) net interest cash
flows from foreign currency and interest rate derivatives associated with
certain investment strategies, which are both reclassified to net investment
income, and iii) the impact of interest cash flows from derivatives associated
with notes payable, which is reclassified to interest expense as a component of
total adjusted expenses. The Company considers adjusted net investment gains and
losses important as it represents the remainder amount that is considered
outside management's control, while excluding the components that are within
management's control and are accordingly reclassified to net investment income
and interest expense. The most comparable U.S. GAAP financial measure for
adjusted net investment gains and losses is net investment gains and losses.

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

•Adjusted earnings excluding current period foreign currency impact are computed
using the average foreign currency exchange rate for the comparable prior-year
period, which eliminates fluctuations driven solely by foreign currency exchange
rate changes. Adjusted earnings per diluted share excluding current period
foreign currency impact is adjusted earnings excluding current period foreign
currency impact divided by the weighted average outstanding diluted shares for
the period presented. The Company considers adjusted earnings excluding current
period foreign currency impact and adjusted earnings per diluted share excluding
current period foreign currency impact important because a significant portion
of the Company's business is conducted in Japan and foreign exchange rates are
outside management's control; therefore, the Company believes it is important to
understand the impact of translating foreign currency (primarily Japanese yen)
into U.S. dollars. The most comparable U.S. GAAP financial measures for adjusted
earnings excluding current period foreign currency impact and adjusted earnings
per diluted share excluding current period foreign currency impact are net
earnings and net earnings per share, respectively.

•Adjusted book value is the U.S. GAAP book value (representing total
shareholders' equity), less AOCI as recorded on the U.S. GAAP balance sheet.
Adjusted book value per common share is adjusted book value at the period end
divided by the ending outstanding common shares for the period presented. The
Company considers adjusted book value and adjusted book value per common share
important as they exclude AOCI, which fluctuates due to market movements that
are outside management's control. The most comparable U.S. GAAP financial
measures for adjusted book value and adjusted book value per common share are
total book value and total book value per common share, respectively.

•Adjusted return on equity excluding foreign currency impact is adjusted
earnings excluding the current period foreign currency impact divided by average
shareholders' equity, excluding AOCI. The Company considers adjusted return on
equity excluding foreign currency impact important as it excludes changes in
foreign currency and components of AOCI, which fluctuate due to market movements
that are outside management's control. The most comparable U.S. GAAP financial
measure for adjusted return on equity excluding foreign currency impact is ROE
as determined using net earnings and average total shareholders' equity.

•U.S. dollar-denominated investment income excluding foreign currency impact
represents amounts excluding foreign currency impact on U.S. dollar-denominated
investment income using the average foreign currency exchange rate for the
comparable prior year period. The Company considers U.S. dollar-denominated
investment income excluding foreign currency impact important as it eliminates
the impact of foreign currency changes on the Aflac Japan segment results, which
are outside management's control. The most comparable U.S. GAAP financial
measure for U.S. dollar-denominated investment income excluding foreign currency
impact is the corresponding net investment income amount from the U.S. dollar
denominated investments translated to yen.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The following table is a reconciliation of items impacting adjusted earnings and
adjusted earnings per diluted share to the most directly comparable U.S. GAAP
financial measures of net earnings and net earnings per diluted share,
respectively, for the years ended December 31.

              Reconciliation of Net Earnings to Adjusted Earnings

                                                  In Millions              Per Diluted Share
                                               2022         2021                          2022        2021
Net earnings                                 $ 4,201      $ 4,325                       $ 6.59      $ 6.39
Items impacting net earnings:
Adjusted net investment (gains) losses (1)      (447)        (462)                        (.70)       (.68)
Other and non-recurring (income) loss             (1)          73                          .00         .11

Income tax (benefit) expense on items

  excluded from adjusted earnings (2)           (357)          83                         (.56)        .12

Adjusted earnings                              3,397        4,019                         5.33        5.94
Current period foreign currency impact (3)       215            N/A                        .34           N/A

Adjusted earnings excluding current period

  foreign currency impact                    $ 3,613      $ 4,019                       $ 5.67      $ 5.94


(1) See reconciliation of net investment (gains) losses to adjusted net
investment (gains) losses below.
(2) Includes release of $452 in deferred taxes in 2022.
(3) Prior period foreign currency impact reflected as "N/A" to isolate change
for current period only.

Reconciling Items

Net Investment Gains and Losses

   Reconciliation of Net Investment (Gains) Losses to Adjusted Net Investment
                                 (Gains) Losses

(In millions)                                                             2022             2021
Net investment (gains) losses                                          $  (363)         $  (468)
Items impacting net investment (gains) losses:
Amortized hedge costs                                                     (112)             (76)
Amortized hedge income                                                      68               57

Net interest cash flows from derivatives associated with certain
investment strategies

                                                      (90)             (30)

Interest rate component of the change in fair value of foreign
currency swaps on

  notes payable                                                             50               55
Adjusted net investment (gains) losses                                 $  

(447) $ (462)

The Company's investment strategy is to invest primarily in fixed maturity
securities to provide a reliable stream of investment income, which is one of
the drivers of the Company's profitability. This investment strategy
incorporates asset-liability matching (ALM) to align the expected cash flows of
the portfolio to the needs of the Company's liability structure. The Company
does not purchase securities with the intent of generating investment gains or
losses. However, investment gains and losses may be realized as a result of
changes in the financial markets and the creditworthiness of specific issuers,
tax planning strategies, and/or general portfolio management and rebalancing.
The realization of investment gains and losses is independent of the
underwriting and administration of the Company's insurance products.

Net investment gains and losses excluded from adjusted earnings include the
following:

•Securities Transactions
•Credit Losses
•Changes in the Fair Value of Equity Securities
•Certain Derivative and Foreign Currency Activities.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
Securities Transactions, Credit Losses and Changes in the Fair Value of Equity
Securities

Securities transactions include gains and losses from sales and redemptions of
investments where the amount received is different from the amortized cost of
the investment. Credit losses include losses for held-to-maturity fixed maturity
securities, available-for-sale fixed maturity securities, loan receivables, loan
commitments and reinsurance recoverables. Changes in the fair value of equity
securities are the result of gains or losses driven by fluctuations in market
prices.

Certain Derivative and Foreign Currency Activities

The Company's derivative activities include:

•foreign currency forwards and options used in hedging foreign exchange risk on
U.S. dollar-denominated investments in Aflac Japan's portfolio, with options
used on a standalone basis and/or in a collar strategy;

•foreign currency forwards and options used to economically hedge certain
portions of forecasted cash flows denominated in yen and hedge the Company's
long term exposure to a weakening yen;

•cross-currency interest rate swaps, also referred to as foreign currency swaps,
associated with certain senior notes and subordinated debentures;

•foreign currency swaps that are associated with variable interest entity (VIE)
bond purchase commitments, and investments in special-purpose entities,
including VIEs where the Company is the primary beneficiary;

•interest rate swaps used to economically hedge interest rate fluctuations in
certain variable-rate investments;

•interest rate swaptions used to hedge changes in the fair value associated with
interest rate fluctuations for certain U.S. dollar-denominated
available-for-sale fixed-maturity securities; and

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

Gains and losses are recognized as a result of valuing these derivatives, net of
the effects of hedge accounting. The Company also excludes from adjusted
earnings the accounting impacts of remeasurement associated with changes in the
foreign currency exchange rate.

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

Other and Non-recurring Items

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

In Japan, the government also requires the insurance industry to contribute to a
policyholder protection corporation that provides funds for the policyholders of
insolvent insurers; however, these costs are calculated and administered
differently than in the U.S. In Japan, these costs are not directly related to
specific insolvencies or bankruptcies, but are rather a regular operational cost
for an insurance company. Based on this structure, the Company does not remove
the Japan policyholder protection expenses from adjusted earnings.

The Company considers the costs associated with the early redemption of its debt
to be unrelated to the underlying fundamentals and trends in its insurance
operations. Additionally, these costs are driven by changes in interest rates
subsequent to the issuance of the debt, and the Company considers these interest
rate changes to represent economic conditions not directly associated with its
insurance operations. In May 2021, the Parent Company used a portion of the net
proceeds from its April 2021 issuance of various series of senior notes to
redeem $700 million of its 3.625% senior notes due June 2023. The pretax expense
due to the early redemption of these notes was $48 million.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
Other items excluded from adjusted earnings included integration costs related
to the Company's acquisition of Zurich North America's U.S. Corporate Life and
Pensions business; these costs primarily consist of expenditures for legal,
accounting, consulting, integration of systems and processes and other similar
services. These integration costs are excluded from adjusted earnings for one
year following the acquisition and amounted to $26 million for the year ended
December 31, 2021.

Income Taxes

The Company's combined U.S. and Japanese effective income tax rate on pretax
earnings was 8.8% in 2022 and 18.7% in 2021. In 2022, the combined effective tax
rate differs from the U.S. statutory rate primarily due to the impact of the tax
accounting method change discussed below, as well as historic and solar tax
credits. In 2021, the combined effective tax rate differs from the U.S.
statutory rate primarily due to historic and solar tax credits. Total income
taxes were $403 million in 2022 and $997 million in 2021. Japanese income taxes
on Aflac Japan's results account for most of the Company's consolidated income
tax expense.

Aflac Japan holds certain U.S. dollar-denominated assets in a Delaware Statutory
Trust (DST). These assets are mostly comprised of various U.S.
dollar-denominated commercial mortgage loans. The functional currency of the DST
for U.S. tax purposes was historically the Japanese yen. In 2022, the Company
requested a change in tax accounting method through the Internal Revenue
Service's automatic consent procedures to change its functional currency on the
DST for U.S. tax purposes to the U.S. dollar. As a result, foreign currency
translation gains or losses on assets held in the DST will no longer be
recognized for U.S. tax purposes. The Company historically recorded a deferred
tax liability for foreign currency translation gains on the DST assets, which
was released in the third quarter of 2022 as a result of the functional currency
change and subsequently adjusted for foreign currency impacts in the fourth
quarter of 2022. This change in functional currency resulted in the Company
recognizing an income tax benefit of $452 million ($0.71 per basic and diluted
share, respectively) in 2022.

In August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into U.S.
law. Effective January 1, 2023, the law imposes a 15% corporate alternative
minimum tax rate and a 1% excise tax on the Company's repurchases of its common
stock. The Company does not anticipate any impacts from the new corporate
minimum tax rate since its current tax rate is above the 15% minimum rate.
Further, the Company expects the charges associated with the excise tax to be
recognized in equity consistent with other costs related to treasury stock.

For additional information, see Note 10 of the Notes to the Consolidated
Financial Statements and the Critical Accounting Estimates - Income Taxes
section of this MD&A.

The Company expects that its adjusted effective tax rate for future periods will
be approximately 20%. The effective tax rate continues to be subject to future
tax law changes both in the U.S. and in foreign jurisdictions. See the risk
factor entitled "Tax rates applicable to the Company may change" in Part I, Item
1A. Risk Factors for more information.

Foreign Currency Translation

Aflac Japan's premiums and a significant portion of its investment income are
received in yen, and its claims and most expenses are paid in yen. Aflac Japan
purchases yen-denominated assets and U.S. dollar-denominated assets, which may
be hedged to yen, to support yen-denominated policy liabilities. Yen-denominated
income statement accounts are translated to U.S. dollars using the weighted
average Japanese yen/U.S. dollar foreign exchange rate for the reporting period,
except realized gains and losses on securities transactions which are translated
at the exchange rate on the trade date of each transaction. Yen-denominated
balance sheet accounts are translated to U.S. dollars using the spot Japanese
yen/U.S. dollar foreign exchange rate at the end of the reporting period.

                        RESULTS OF OPERATIONS BY SEGMENT

U.S. GAAP financial reporting requires that a company report financial and
descriptive information about operating segments in its annual and interim
period financial statements. Furthermore, the Company is required to report a
measure of segment profit or loss, certain revenue and expense items, and
segment assets. The Company's insurance business consists of two segments: Aflac
Japan and Aflac U.S. Aflac Japan is the principal contributor to consolidated
earnings. In addition, the Parent Company, other business units that are not
individually reportable, and business activities, including reinsurance
retrocession activities, not included in Aflac Japan or Aflac U.S. are included
in Corporate and other. See the Item 1. Business section of this Form 10-K for a
summary of each segment's products and distribution channels.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
Consistent with U.S. GAAP guidance for segment reporting, pretax adjusted
earnings is the Company's U.S. GAAP measure of segment performance. The Company
believes that a presentation of this measure is vitally important to an
understanding of the underlying profitability drivers and trends of its
business. Additional performance measures used to evaluate the financial
condition and performance of the Company's segments are listed below.

•Operating Ratios
•New Annualized Premium Sales
•New Money Yield
•Return on Average Invested Assets
•Average Weekly Producer

For additional information on the Company's performance measures included in
this MD&A, see the Glossary of Selected Terms found directly following Part IV.
See Note 2 of the Notes to the Consolidated Financial Statements for the
reconciliation of segment results to the Company's consolidated U.S. GAAP
results and additional information.

                              AFLAC JAPAN SEGMENT

Aflac Japan Pretax Adjusted Earnings

Changes in Aflac Japan's pretax adjusted earnings and profit margins are
primarily affected by morbidity, mortality, expenses, persistency and investment
yields. The following table presents a summary of operating results for Aflac
Japan for the years ended December 31.
                    Aflac Japan Summary of Operating Results

(In millions)                                                  2022          2021
Net earned premiums                                          $ 9,548      $ 11,853
Net investment income: (1)
Yen-denominated investment income                              1,140        

1,262

U.S. dollar-denominated investment income                      1,641        

1,845

Net investment income                                          2,782        

3,107

Amortized hedge costs related to certain foreign currency

  exposure management strategies                                 112        

76

Adjusted net investment income                                 2,669         3,031
Other income (loss)                                               35            41
Total adjusted revenues                                       12,252        14,925
Benefits and claims, net                                       6,565         7,963
Adjusted expenses:
Amortization of deferred policy acquisition costs                547           653
Insurance commissions                                            563           706
Insurance and other expenses                                   1,520         1,849
Total adjusted expenses                                        2,630         3,208
Total benefits and adjusted expenses                           9,195        

11,171

Pretax adjusted earnings                                     $ 3,056      $ 

3,754

Weighted-average yen/dollar exchange rate                     130.17        109.79


                                                In Dollars                   In Yen
Percentage change over previous period:      2022          2021                   2022        2021
Net earned premiums                          (19.4) %     (6.4) %                (4.2) %     (3.9) %
Adjusted net investment income               (11.9)       14.0                    5.5        17.6
Total adjusted revenues                      (17.9)       (2.9)                  (2.2)        (.2)
Pretax adjusted earnings                     (18.6)       15.0                   (3.1)       18.5

(1) Net interest cash flows from derivatives associated with certain investment
strategies of $(86) and $(33) in 2022 and 2021, respectively, have been
reclassified from net investment gains (losses) and included in adjusted
earnings as a component of net investment income.

                                       40

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

In yen terms, Aflac Japan's net earned premiums decreased in 2022, mainly due to
limited-pay products reaching premium paid-up status and a slightly declining in
force. Adjusted net investment income, in yen terms, increased in 2022 primarily
due to increases in floating rate income earned from U.S. dollar-denominated
investment that were driven by stronger dollar exchange rates, increasing
interest rates, and higher income from make whole payments received on called
securities, which were partially offset by lower income from alternative assets
and higher hedge costs. The decrease in pretax adjusted earnings in yen was
primarily due to a decrease in revenues and an increase in the benefit ratio
resulting from a wider scope of "deemed hospitalization" that was in effect
through most of the third quarter of 2022.

Annualized premiums in force at December 31, 2022, were ¥1.30 trillion, compared
with ¥1.36 trillion in 2021. The decrease in annualized premiums in force in yen
of 4.4% in 2022 and 4.7% in 2021 was driven primarily by limited-pay products
reaching paid up status and lower sales as a result of pandemic conditions.
Annualized premiums in force, translated into dollars at respective year-end
exchange rates, were $9.8 billion in 2022 and $11.8 billion in 2021. As of
December 31, 2022, Aflac Japan exceeded 23 million individual policies in force
in Japan. Aflac Japan continued to be the number one seller of cancer insurance
policies in Japan throughout 2022, with more than 14 million cancer policies in
force as of December 31, 2022.

Aflac Japan's investment portfolios include U.S. dollar-denominated securities
and reverse-dual currency securities (yen-denominated debt securities with
dollar coupon payments). In years when the yen strengthens in relation to the
dollar, translating Aflac Japan's U.S. dollar-denominated investment income into
yen lowers growth rates for net investment income, total adjusted revenues, and
pretax adjusted earnings in yen terms. In years when the yen weakens,
translating U.S. dollar-denominated investment income into yen magnifies growth
rates for net investment income, total adjusted revenues, and pretax adjusted
earnings in yen terms.

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

                 Aflac Japan Percentage Changes Over Prior Year
                            (Yen Operating Results)
                        For the Years Ended December 31,

                                                                    Including Foreign                                      Excluding Foreign
                                                                     Currency Changes                                      Currency Changes
                                                              2022                     2021                                      2022                 2021
Adjusted net investment income                                       5.5  %             17.6  %                                    (5.0) %             15.6  %
Total adjusted revenues                                             (2.2)                (.2)                                      (4.3)                (.5)
Pretax adjusted earnings                                            (3.1)               18.5                                      (11.3)               16.9

The following table presents a summary of operating ratios in yen terms for Aflac Japan for the years ended December 31.

Ratios to total adjusted revenues:                      2022        2021
Benefits and claims, net                               53.6  %     53.3  %
Adjusted expenses:
Amortization of deferred policy acquisition costs       4.5         4.4
Insurance commissions                                   4.6         4.7
Insurance and other expenses                           12.4        12.4
Total adjusted expenses                                21.5        21.5
Pretax adjusted earnings                               24.9        25.2
Ratios to total premiums:
Benefits and claims, net                               68.9  %     67.2  %
Adjusted expenses:
Amortization of deferred policy acquisition costs       5.7         5.5





                                       41

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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
In 2022, the benefit ratio to total premiums increased, compared with 2021,
primarily due to a decrease in total premiums and higher third sector benefits
due substantially to an increase in medical hospitalization claims as a result
of a wider scope of "deemed hospitalization" related to COVID-19, partially
offset by the continued change in mix of first and third sector business. In
2022, the adjusted expense ratio was flat, compared with 2021, reflecting the
decrease in total adjusted revenues and an offsetting decrease in total adjusted
expenses. In total for 2022, the pretax adjusted profit margin decreased when
compared with 2021, primarily due to lower adjusted revenues, a higher benefit
ratio and a flat expense ratio.

Aflac Japan Sales

The following table presents Aflac Japan's new annualized premium sales for the
years ended December 31.

                                                      In Dollars                    In Yen
(In millions of dollars and billions of yen)     2022         2021              2022         2021
New annualized premium sales                   $  416       $ 499             ¥ 54.8       ¥ 54.8
Increase (decrease) over prior period           (16.7) %      4.6  %        

.0 % 7.7 %

In 2022, new annualized premium sales on a yen basis were essentially flat,
compared with 2021, reflecting constrained sales in the first half of the year
due to ongoing pandemic conditions offset by a new cancer product launch in
certain distribution channels and first sector product updates in the second
half of the year.

The following table details the contributions to Aflac Japan's new annualized
premium sales by major insurance product for the years ended December 31.

                                2022         2021
Cancer                          56.5  %      49.2  %
Medical and other health:
Medical                         26.6         37.2
Income support                   1.3           .5
Life insurance:
Traditional life (1)             8.1          9.0
WAYS                             3.5           .8
Child endowment                   .3           .3
Other                            3.7          3.0
  Total                        100.0  %     100.0  %

(1) Includes term and whole life

The foundation of Aflac Japan's product portfolio has been, and continues to be,
third sector products, which include cancer, medical, income support, and
nursing care insurance products. With continued cost pressure on Japan's health
care system, the Company expects the need for third sector products will
continue to rise in the future and that the medical and cancer insurance
products Aflac Japan provides will continue to be an important part of its
product portfolio. Moreover, in November 2022, Aflac Japan refreshed its first
sector savings-type products WAYS and Child Endowment and began to actively
promote sales of these products after having curtailed sales of both products
beginning in 2013. The refreshment of these first sector products position Aflac
Japan for potential future long-term sales opportunities by marketing these
products to a younger demographic as well as potential cross-selling
opportunities of Aflac Japan's third sector products.

Sales of Aflac Japan cancer products in the Japan Post Group channel experienced
a material decline beginning in August 2019. Japan Post Group resumed proactive
sales of cancer insurance policies on April 1, 2021 and Aflac Japan continues to
strengthen the strategic alliance. In April 2022, approximately 10,000 employees
of Japan Post Co. were transferred to Japan Post Insurance. Japan Post Group has
informed Aflac Japan that the transferred employees' responsibilities will
include sales of Japan Post Insurance products and Aflac Japan cancer products
but will not include sales of other financial products. The Company expects
continued collaboration to further position both companies for long-term growth
and a gradual improvement of Japan Post Group cancer insurance sales in the
intermediate term. For example, in 2021 and 2022, Aflac Japan observed an
increase in the number of proposals to potential customers in the Japan Post
Group channel, and the Japan Post Group continues to conduct a nationwide
campaign to improve certain sales process practices. For additional information,
see the risk factor entitled "Sales of the Company's products and


                                       42
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
services are dependent on its ability to attract, retain and support a network
of qualified sales associates, brokers and employees in the U.S. and sales
associates and other distribution partners in Japan," in Part I, Item 1A. Risk
Factors.

Aflac Japan continues to promote digital and web-based sales to groups and use
of its system that enables smart device-based insurance application by allowing
the customer and an Aflac Japan operator to see the same screen through their
smart devices. Further, Aflac Japan continues to utilize its virtual sales tool
that enables online consultations and policy applications to be completed
entirely online.

The following table details the contributions to Aflac Japan's new annualized
premium sales by agency type for the years ended December 31.

                                         2022         2021
Independent corporate and individual     49.5  %      51.1  %
Affiliated corporate (1)                 46.5         43.7
Bank                                      4.0          5.2
  Total                                 100.0  %     100.0  %

(1) Includes Japan Post, Dai-ichi Life and Daido Life

In 2022, Aflac Japan recruited 38 new sales agencies. At December 31, 2022,
Aflac Japan was represented by approximately 7,400 sales agencies, with
approximately 110,000 licensed sales associates employed by those agencies. The
number of sales agencies has declined in recent years due to Aflac Japan's focus
on supporting agencies with strong management frameworks, high productivity and
more producing agents.

At December 31, 2022, Aflac Japan had agreements to sell its products at 359
banks, approximately 90% of the total number of banks in Japan.

Strategic Alliance with Japan Post Holdings

As previously reported, on December 19, 2018, the Parent Company and Aflac Japan
entered into a Basic Agreement with Japan Post Holdings Co., Ltd., a Japanese
corporation (Japan Post Holdings). Pursuant to the terms of the Basic Agreement,
among other items, Japan Post Holdings and Aflac Japan agreed to reconfirm
existing initiatives regarding cancer insurance and to consider new joint
initiatives. In June 2021, the Parent Company, Aflac Japan and Japan Post Group
agreed to pursue several specific initiatives toward building a "'Co-creation
Platform' to support customers and local communities," consistent with Japan
Post Group's medium-term management plan announced in May 2021. The initiatives
are directed at, among other items, the promotion of Aflac Japan cancer
insurance, digital transformation within the Japan Post Group, and certain
diversity efforts.

As previously reported, on February 28, 2019, the Parent Company entered a
Shareholders Agreement with Japan Post Holdings, J&A Alliance Holdings
Corporation, a Delaware corporation, solely in its capacity as trustee of J&A
Alliance Trust, a New York voting trust (Trust), and General Incorporated
Association J&A Alliance, a Japanese general incorporated association. According
to a Schedule 13G/A filed by Japan Post Holdings with the SEC on January 6,
2021, the Trust had beneficially acquired 7.45% of the outstanding Aflac
Incorporated common shares as of December 31, 2020. Japan Post Holdings is the
sole beneficiary of the Trust. According to a Form 13F filed by Japan Post
Holdings with the SEC on November 2, 2022, Japan Post Holdings owned
52.3 million Aflac Incorporated common shares as of September 30, 2022.

On May 1, 2020, the Parent Company filed a registration statement on Form S-3
that registered the sale of its common stock from time to time by J&A Alliance
Holdings Corporation in its capacity as trustee of the Trust. The filing was
made strictly pursuant to a contractual requirement contained in the
Shareholders Agreement. Notwithstanding the filing of the Form S-3, the Trust
continues to be subject to a lockup period for a period expiring four years
after the Trust acquired 7% of the Parent Company's outstanding shares. After
expiration of such period, the Trust has agreed not to own more than the greater
of 10% of the Parent Company's outstanding shares or such shares representing
22.5% of the voting rights in the Parent Company.

In light of the fact that the shares acquired by the Trust, like all Aflac
Incorporated common shares, will be eligible for 10-for-1 voting rights after
being held for 48 consecutive months, the Shareholders Agreement further
provides for voting restrictions that effectively limit the trustee's voting
rights to no more than 20% of the voting rights in the Parent Company and
further restrict the trustee's voting rights with respect to certain change in
control transactions. Japan Post Holdings


                                       43
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
will not have a Board seat on the Parent Company's Board of Directors and will
not have rights to control, manage or intervene in the management of the Parent
Company.

The foregoing is subject to and qualified in its entirety by reference to the
full text of the Basic Agreement, a copy of which is attached as Exhibit 10.1 to
the Company's Current Report on Form 8-K filed December 19, 2018, and the
Shareholders Agreement, a copy of which is attached as Exhibit 10.50 to the
Company's Quarterly Report on Form 10-Q filed April 26, 2019, the terms of which
exhibits are incorporated herein by reference.

Aflac Japan Investments

The level of investment income in yen is affected by available cash flow from
operations, the timing of investing the cash flow, yields on new investments,
the effect of yen/dollar exchange rates on U.S. dollar-denominated investment
income, and other factors.

As part of the Company's portfolio management and asset allocation process,
Aflac Japan invests in yen and U.S. dollar-denominated investments.
Yen-denominated investments primarily consist of JGBs, public and private fixed
maturity securities and public equity securities. Aflac Japan's U.S.
dollar-denominated investments include fixed maturity investments and growth
assets, including alternative investments in limited partnerships or similar
investment vehicles. Aflac Japan has been investing in both publicly-traded and
privately originated U.S. dollar-denominated investment-grade and
below-investment-grade fixed maturity securities and loan receivables, and has
entered into foreign currency forwards and options to hedge the currency risk on
the fair value of a portion of the U.S. dollar investments.

The following table details the investment purchases for Aflac Japan for the
years ended December 31.

              (In millions)                                2022         2021
              Yen-denominated:
               Fixed maturity securities:
                 Japan government and agencies           $     0      $ 1,208
                 Private placements                          854          695
                 Other fixed maturity securities             113          171
               Equity securities                             398          216
               Other investments                              22           10
                  Total yen-denominated                  $ 1,387      $ 2,300

              U.S. dollar-denominated:
               Fixed maturity securities:
                 Other fixed maturity securities         $   559      $ 1,963
                 Infrastructure debt                         347           52

                 Collateralized loan obligations             498          216
               Equity securities                              22            8
               Commercial mortgage and other loans:
                 Transitional real estate loans            1,645        1,768
                 Commercial mortgage loans                     0           31
                 Middle market loans                       1,203        2,428
               Other investments                             391          404
                  Total U.S. dollar-denominated          $ 4,666      $ 6,870
                    Total Aflac Japan purchases          $ 6,053      $ 9,170

See the Investments section of this MD&A for further discussion of these
investment programs, and see Notes 1, 3 and 4 of the Notes to the Consolidated
Financial Statements for more information regarding loans and loan receivables.

Funds available for investment include cash flows from operations, investment
income, and funds generated from maturities, redemptions, securities lending,
and other securities transactions. Securities lending is also used from time to
time to accelerate the availability of funds for investment. Purchases of
securities from period to period are determined


                                       44
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
based on multiple objectives including appropriate portfolio diversification,
the relative value of a potential investment and availability of investment
opportunities, liquidity, credit and other risk factors while adhering to the
Company's investment policy guidelines.

The following table presents the results of Aflac Japan's investment yields for
the years ended and as of December 31.

                                                                           2022             2021
Total purchases for the period (in millions) (1)                        $ 5,640          $ 8,756
New money yield (1),(2)                                                    4.48  %          3.50  %
Return on average invested assets (3)                                      2.78             2.72

Portfolio book yield, including U.S. dollar-denominated investments,
end of period (1),(2)

3.06 % 2.60 %

(1) Includes fixed maturity securities, commercial mortgage and other loans,
equity securities, and excludes alternative investments in limited partnerships
(2) Reported on a gross yield basis; excludes investment expenses, external
management fees, and amortized hedge costs
(3) Net of investment expenses and amortized hedge costs, year-to-date number
reflected on a quarterly average basis

The increase in the Aflac Japan new money yield in 2022 was primarily due to
increases in U.S. interest rates.

See Notes 3, 4 and 5 of the Notes to the Consolidated Financial Statements and
the Investments and Hedging Activities sections of this MD&A for additional
information on the Company's investments and hedging strategies.

                               AFLAC U.S. SEGMENT

Aflac U.S. Pretax Adjusted Earnings

Changes in Aflac U.S. pretax adjusted earnings and profit margins are primarily
affected by morbidity, mortality, expenses, persistency and investment yields.
The following table presents a summary of operating results for Aflac U.S. for
the years ended December 31.
                    Aflac U.S. Summary of Operating Results

(In millions)                                            2022          2021
Net earned premiums                                   $ 5,570       $ 5,614
Adjusted net investment income (1)                        755           754
Other income                                              161           121
Total adjusted revenues                                 6,486         6,489
Benefits and claims                                     2,442         2,447
Adjusted expenses:
Amortization of deferred policy acquisition costs         605           517
Insurance commissions                                     553           550
Insurance and other expenses                            1,562         1,498
Total adjusted expenses                                 2,720         2,564
Total benefits and adjusted expenses                    5,162         5,011
Pretax adjusted earnings                              $ 1,324       $ 1,478
Percentage change over previous period:
Net earned premiums                                       (.8) %       (2.5) %
Adjusted net investment income                             .1           7.0
Total adjusted revenues                                    .0          (1.2)
Pretax adjusted earnings                                (10.4)         16.6


(1) Net interest cash flows from derivatives associated with certain investment
strategies of $(4) and $2 in 2022 and 2021, respectively, have been reclassified
from net investment gains (losses) and included in adjusted earnings as a
component of net investment income.

In 2022, Aflac U.S. net earned premiums decreased, primarily due to lower
persistency. Other income increased in 2022 due to an increase in fee income.
The decrease in pretax adjusted earnings was driven primarily by an increase in

                                       45
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
deferred policy acquisition cost (DAC) amortization associated with lower
persistency and an increase in planned spending reflecting, in part, platform
and growth investments.

Annualized premiums in force were essentially flat in 2022 and decreased 1.6% in
2021. Annualized premiums in force at December 31 were $6.0 billion in 2022 and
2021.

The following table presents a summary of operating ratios for Aflac U.S. for
the years ended December 31.

Ratios to total adjusted revenues:                      2022        2021
Benefits and claims                                    37.7  %     37.7  %
Adjusted expenses:
Amortization of deferred policy acquisition costs       9.3         8.0
Insurance commissions                                   8.5         8.5
Insurance and other expenses                           24.1        23.1
Total adjusted expenses                                41.9        39.5
Pretax adjusted earnings                               20.4        22.8
Ratios to total premiums:
Benefits and claims                                    43.8  %     43.6  %
Adjusted expenses:
Amortization of deferred policy acquisition costs      10.9         9.2



The benefit ratio to total premiums increased slightly in 2022, compared with
2021, reflecting higher incurred claims, mostly offset by reserve releases
related to lower persistency. The adjusted expense ratio increased in 2022,
compared with 2021, primarily due to higher DAC amortization associated with
lower persistency and higher planned spending reflecting ongoing investments in
the U.S. platform. The pretax adjusted profit margin decreased in 2022 when
compared with 2021, primarily due to the higher adjusted expense ratio.

Aflac U.S. Sales

The following table presents Aflac's U.S. new annualized premium sales for the
years ended December 31.

(In millions)                                2022          2021
New annualized premium sales              $ 1,483       $ 1,278

Increase (decrease) over prior period 16.1 % 16.9 %

New annualized premium sales for accident insurance increased 5.2%; disability
sales increased 28.1%; critical care insurance sales (including cancer
insurance) increased 9.6%; hospital indemnity insurance sales increased 8.1%;
dental/vision sales increased 32.3%; and life sales increased 36.5% in 2022,
compared with 2021. The increase in sales for Aflac U.S. in 2022 reflects
continued improvement from investment in growth initiatives as well as
productivity gains.

The following table details the contributions to Aflac's U.S. new annualized
premium sales by major insurance product category for the years ended
December 31.

                         2022         2021
Accident                 22.8  %     25.1  %
Disability               25.5        23.1
  Critical care (1)      20.1        21.3
Hospital indemnity       15.3        16.4
Dental/vision             5.8         5.1
Life                     10.5         9.0
Total                   100.0  %     100.0%

(1) Includes cancer, critical illness and hospital intensive care products

                                       46
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
In 2022, the Aflac U.S. sales force included an average of approximately 6,200
U.S. agents, including brokers, who were actively producing business on a weekly
basis. The Company believes that this average weekly producer equivalent metric
allows sales management to monitor progress and needs, as well as serve as a
leading indicator of future production capacity. Aflac U.S. believes that during
2021 and 2022, constraints in the labor market limited its recruiting of new
sales agents, and that limitations on face-to-face sales opportunities during
the COVID-19 pandemic suppressed the development of newly recruited agents into
business producers and the productivity of veteran agents and brokers. Aflac
U.S. believes that the above factors have acted as a headwind to sales and to
growth in the number of average weekly producers. Aflac U.S. remains focused on
mitigating and reversing these trends as the U.S. economy continues to recover
from the pandemic.

Aflac U.S. remains focused on supporting its agency channel, most of which are
small businesses, by offering financial support and an extended value
proposition. The Aflac U.S. sales team has pivoted to accommodate preferred
enrollment conditions which include realizing sales at the worksite through
in-person enrollment, an enrollment call center, video enrollment through
co-browsing and self-enrollment. The traditional agent sales team is also using
virtual recruiting and training through video conferencing in order to maintain
or increase the recruiting pipeline. The Aflac U.S. broker sales team is focused
on product enhancements, as well as leveraging technology based solutions to
drive enrollment.

Aflac U.S. Investments

The level of investment income is affected by available cash flow from
operations, the timing of investing the cash flow, yields on new investments,
and other factors.

As part of the Company's portfolio management and asset allocation process,
Aflac U.S. invests in fixed maturity investments and growth assets, including
public equity securities and alternative investments in limited partnerships.
Aflac U.S. has been investing in both publicly traded and privately originated
investment-grade and below-investment-grade fixed maturity securities and loan
receivables.

The following table details the investment purchases for Aflac U.S. as of
December 31.

               (In millions)                               2022         2021
               Fixed maturity securities:
                  Other fixed maturity securities        $   635      $   770
                  Infrastructure debt                        191           91
                  Collateralized loan obligations            199           65
               Equity securities                              33          213
               Commercial mortgage and other loans:
                  Transitional real estate loans             342          525
                  Commercial mortgage loans                    0          276
                  Middle market loans                        301          190
               Other investments                              44           45
                   Total Aflac U.S. Purchases            $ 1,745      $ 2,175



Funds available for investment include cash flows from operations, investment
income, and funds generated from maturities, redemptions, and other securities
transactions. Purchases of securities from period to period are determined based
on multiple objectives, including appropriate portfolio diversification, the
relative value of a potential investment and availability of investment
opportunities, liquidity, credit and other risk factors while adhering to the
Company's investment policy guidelines.



                                       47
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The following table presents the results of Aflac's U.S. investment yields for
the years ended and as of December 31.

                                                   2022          2021

Total purchases for period (in millions) (1) $ 1,701 $ 2,130
New money yield (1),(2)

                            5.16  %       3.41  %
Return on average invested assets (3)              4.72          4.87

Portfolio book yield, end of period (1),(2) 5.39 % 4.94 %

(1) Includes fixed maturity securities, commercial mortgage and other loans,
equity securities, and excludes alternative investments in limited partnerships
(2) Reported on a gross yield basis; excludes investment expenses and external
management fees
(3) Net of investment expenses, year-to-date number reflected on a quarterly
average basis

The increase in the Aflac U.S. new money yield for the year ended December 31,
2022 was primarily due to increases in U.S. interest rates.

See Note 3 of the Notes to the Consolidated Financial Statements and the Market
Risks of Financial Instruments - Credit Risk subsection of Item 7A. for more
information regarding the sector concentrations of the Company's investments.

                              CORPORATE AND OTHER

Changes in the pretax adjusted earnings of Corporate and other are primarily
affected by investment income. The following table presents a summary operating
results for Corporate and other for the years ended December 31.

                Corporate and Other Summary of Operating Results

(In millions)                                                    2022       

2021

Net earned premiums                                            $  145      $  180
Net investment income (loss) (1)                                   30       

(73)

Amortized hedge income related to certain foreign currency

  management strategies                                            68       

57

Adjusted net investment income                                     98         (16)
Other income                                                       24          11
Total adjusted revenues                                           267         175
Benefits and claims, net                                          146         166
Adjusted expenses:
Interest expense                                                  162         165
Other adjusted expenses                                           182         142
Total adjusted expenses                                           344         307
Total benefits and adjusted expenses                              490         473
Pretax adjusted earnings                                       $ (223)     $ (298)


(1) The change in value of federal historic rehabilitation and solar investments
in partnerships of $91 and $138 in 2022 and 2021, respectively, is included as a
reduction to net investment income. Tax credits on these investments of $83 and
$115 in 2022 and 2021, respectively, have been recorded as an income tax benefit
in the consolidated statement of earnings. See Note 3 of the Notes to the
Consolidated Financial Statements for additional information on these
investments.

In 2022, total adjusted revenues increased compared with 2021, primarily due to
higher adjusted net investment income from higher interest rates and an increase
in amortized hedge income, partially offset by the impact of federal tax credit
investments and a reduction in net earned premiums as a result of significant
yen weakening. Total adjusted expenses increased, as compared to 2021, primarily
due to higher expenses associated with employee compensation and benefits and
travel. These results also reflect the impact of foreign currency on net earned
premiums and the corresponding benefits.

The Parent Company invests in partnerships that specialize in rehabilitating
historic structures or the installation of solar equipment in order to receive
federal historic rehabilitation and solar tax credits. These investments are
classified as limited partnerships and included in other investments in the
consolidated balance sheet. The change in value of each investment is recorded
as a reduction to net investment income. Tax credits generated by these
investments are recorded as an income tax benefit in the consolidated statement
of earnings.


                                       48

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

                                  INVESTMENTS

The Company's investment strategy utilizes disciplined asset and liability
management while seeking long-term risk-adjusted investment returns and the
delivery of stable income within regulatory and capital objectives, and
preserving shareholder value. In attempting to optimally balance these
objectives, the Company seeks to maintain on behalf of Aflac Japan a diversified
portfolio of yen-denominated investment assets, a U.S. dollar-denominated
investment portfolio hedged back to yen and a portfolio of unhedged U.S.
dollar-denominated assets. As part of the Company's portfolio management and
asset allocation process, Aflac U.S. invests in fixed maturity investments and
growth assets, including public equity securities and alternative investments in
limited partnerships. Aflac U.S. invests in both publicly traded and privately
originated investment-grade and below-investment-grade fixed maturity securities
and loans. The Company is also a signatory to the Principles for Responsible
Investment, a global framework for incorporating environmental, social and
governance (ESG) considerations into investment and ownership decisions.

For additional information concerning the Company's investments, see Notes 3, 4,
and 5 of the Notes to the Consolidated Financial Statements.

The following tables detail investments by segment as of December 31.

                        Investment Securities by Segment

                                                                            2022
                                                                                    Corporate and
(In millions)                            Aflac Japan            Aflac U.S.              Other                Total
Available for sale, fixed maturity
securities,
  at fair value                        $     61,615           $    12,231           $     1,895           $  75,741
Held to maturity, fixed maturity
securities,
  at amortized cost (1)                      19,056                     0                     0              19,056
Equity securities                               650                    51                   390               1,091
Commercial mortgage and other loans:
Transitional real estate loans (1)            5,133                 1,140                   182               6,455
Commercial mortgage loans (1)                 1,269                   729                    15               2,013
Middle market loans (1)                       4,557                   471                     0               5,028
Other investments:
Policy loans                                    190                    24                     0                 214
Short-term investments (2)                      319                   184                 1,029               1,532
Limited partnerships                          1,900                   208                   182               2,290
Other                                             0                    34                     0                  34
Investment in affiliate (3)                       0                   195                  (195)                  0
   Total investments                         94,689                15,267                 3,498             113,454
Cash and cash equivalents                     1,601                   720                 1,622               3,943
       Total investments and cash      $     96,290           $    15,987           $     5,120           $ 117,397


(1) Net of allowance for credit losses
(2) Includes securities lending collateral
(3) For consolidated reporting, Aflac U.S.'s investment in Aflac Re Bermuda is
eliminated in Corporate and other



                                       49

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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
                                                                            2021
                                                                                    Corporate and
(In millions)                            Aflac Japan            Aflac U.S.              Other                Total
Available for sale, fixed maturity
securities,
  at fair value                        $     81,793           $    14,910           $     1,993           $  98,696
Held to maturity, fixed maturity
securities,
  at amortized cost (1)                      22,000                     0                     0              22,000
Equity securities                               714                   226                   663               1,603
Commercial mortgage and other loans:
Transitional real estate loans (1)            4,226                 1,020                    45               5,291
Commercial mortgage loans (1)                 1,217                   669                     8               1,894
Middle market loans (1)                       4,297                   304                     0               4,601
Other investments:
Policy loans                                    216                    20                     0                 236
Short-term investments (2)                      590                   302                   834               1,726
Limited partnerships                          1,534                   169                   155               1,858
Other                                             0                    22                     0                  22
   Total investments                        116,587                17,642                 3,698             137,927
Cash and cash equivalents                     2,053                   681                 2,317               5,051
       Total investments and cash      $    118,640           $    18,323           $     6,015           $ 142,978


(1) Net of allowance for credit losses
(2) Includes securities lending collateral

The ratings of the Company's securities referenced in the table below are based
on the ratings designations provided by major rating organizations such as
Moody's, Standard & Poor's and Fitch or, if not rated, are determined based on
the Company's internal analysis of such securities. When the ratings issued by
the rating agencies differ, the Company utilizes the second lowest rating when
three or more rating agency ratings are available or the lowest rating when only
two rating agency ratings are available.

The distributions of fixed maturity securities the Company owns, by credit
rating, as of December 31 were as follows:

           Composition of Fixed Maturity Securities by Credit Rating

                                      2022                                               2021
                    Amortized                  Fair                    Amortized                  Fair
                      Cost                     Value                     Cost                     Value
AAA                       1.6  %                    1.5  %                   1.0  %                     .9  %
AA                        5.2                       5.3                      5.1                       5.2
A                        68.0                      68.1                     68.9                      68.5
BBB                      23.0                      22.9                     22.5                      22.8
BB or lower               2.2                       2.2                      2.5                       2.6
Total                   100.0  %                  100.0  %                 100.0  %                  100.0  %

As of December 31, 2022, the Company's direct and indirect exposure to
securities in its investment portfolio that were guaranteed by third parties was
immaterial both individually and in the aggregate.

The following table presents the 10 largest unrealized loss positions in the
Company's portfolio as of December 31, 2022.

                                       50

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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations

                                  Credit            Amortized            Fair
(In millions)                     Rating              Cost               Value            Unrealized Loss
Autostrade Per Litalia Spa           BBB               $ 149            $ 108                       $ (41)
JP Morgan Chase and Co.               A                  210              171                         (39)
KLM Royal Dutch Airlines              B                  135               96                         (39)
Investcorp Capital Limited           BB                  329              291                         (38)
Prologis LP                           A                  172              142                         (30)
Urban Renaissance Agency              A                  184              154                         (30)
GLP Pte Ltd.                         BBB                 113               83                         (30)
Banco de Chile                        A                  150              127                         (23)
Citigroup Inc                         A                  176              154                         (22)
Morgan Stanley                        A                  135              113                         (22)



Generally, declines in fair values can be a result of changes in interest rates,
yen/dollar exchange rate, and changes in net spreads driven by a broad market
move or a change in the issuer's underlying credit quality. The Company believes
these issuers have the ability to continue making timely payments of principal
and interest. See the Unrealized Investment Gains and Losses section in Note 3
of the Notes to the Consolidated Financial Statements for further discussions of
unrealized losses related to financial institutions and other corporate
investments.

Below-Investment-Grade Securities

The Company's portfolio of below-investment-grade securities includes debt
securities purchased while the issuer was rated investment grade plus other
loans and bonds purchased as part of an allocation to that segment of the
market. The following is the Company's below-investment-grade exposure at
December 31.

                       Below-Investment-Grade Investments

                                                                    2022
                                                                                      Unrealized
                                              Par        Amortized        Fair           Gain
      (In millions)                          Value        Cost (1)        Value         (Loss)

      Investcorp Capital Limited           $   329      $      329      $   291      $      (38)
      Pemex Project Funding Master Trust       226             226          230               4
      Commerzbank                              188             145          209              64
      Telecom Italia SpA                       151             151          178              27
      KLM Royal Dutch Airlines                 151             135           96             (39)
      Apache Corporation                       138             110          130              20
      Howmet Aerospace Inc.                    100              70           97              27
      IKB Deutsche Industriebank AG             98              47           75              28
      Generalitat de Catalunya                  60              24           58              34
      National Gas Co. Trinidad & Tobago        52              50           48              (2)
      Other Issuers                             84              85           69             (16)
           Subtotal (2)                      1,577           1,372        1,481             109

      High yield corporate bonds               785             666         

697              31
      Middle market loans                    4,732           4,562        4,554              (8)
           Grand Total                     $ 7,094      $    6,600      $ 6,732      $      132


(1) Net of allowance for credit losses
(2) Securities initially purchased as investment grade, but have subsequently
been downgraded to below investment grade

The Company invests in middle market loans primarily to U.S. corporate
borrowers, most of which have below-investment-grade ratings. The objectives of
this program include enhancing the yield on invested assets, achieving further
diversification of credit risk, and mitigating the risk of rising interest rates
and hedge costs through the acquisition of floating rate assets.


                                       51

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

The Company maintains an allocation to higher yielding corporate bonds within
the Aflac Japan and Aflac U.S. portfolios. Most of these securities were rated
below-investment-grade at the time of purchase, but the Company also purchased
several that were rated investment grade which, because of market pricing, offer
yields commensurate with below-investment-grade risk profiles. The objective of
this allocation was to enhance the Company's yield on invested assets and
further diversify credit risk. All investments in this program must have a
minimum rating at purchase of low BB using the Company's above described rating
methodology and are managed by the Company's internal credit portfolio
management team.

Fixed Maturity Securities by Sector

The Company maintains diversification in investments by sector to avoid
concentrations to any one sector, thus managing exposure risk. The following
table shows the distribution of fixed maturities by sector classification as of
December 31.

                                                                                    2022
                                                                                              Gross
                                                     Amortized          Gross Unrealized   Unrealized                           % of
(In millions)                                         Cost (1)               Gains           Losses        Fair Value          Total
Government and agencies                      $                43,854    $       3,304    $     (1,732)   $    45,426                 46.4  %
Municipalities                                                 2,590              215            (150)         2,655                  2.7
Mortgage- and asset-backed securities                          2,167               75             (96)         2,146                  2.3
Public utilities                                               7,450              545            (288)         7,707                  7.9
Electric                                                       6,036              456            (197)         6,294                  6.4
Natural Gas                                                      249               28             (10)           267                   .3
Other                                                            565               35             (48)           553                   .6
Utility/Energy                                                   600               26             (33)           593                   .6
Sovereign and supranational                                    1,238              113             (17)         1,334                  1.3
Banks/financial institutions                                   9,340              595            (636)         9,299                  9.9
Banking                                                        5,633              434            (364)         5,704                  6.0
Insurance                                                      1,703              119             (81)         1,740                  1.8
Other                                                          2,004               42            (191)         1,855                  2.1
Other corporate                                               27,886            2,107          (1,609)        28,384                 29.5
Basic Industry                                                 2,452              263            (112)         2,602                  2.6
Capital Goods                                                  3,394              180            (226)         3,350                  3.6
Communications                                                 2,866              284            (109)         3,039                  3.0
Consumer Cyclical                                              2,206              184             (71)         2,320                  2.3
Consumer Non-Cyclical                                          6,238              383            (362)         6,259                  6.7
Energy                                                         2,664              330             (85)         2,909                  2.8
Other                                                          1,371               81            (146)         1,306                  1.5
Technology                                                     3,534              122            (257)         3,399                  3.7
Transportation                                                 3,161              280            (241)         3,200                  3.3
    Total fixed maturity securities          $                94,525    $       6,954    $     (4,528)   $    96,951                100.0  %

(1) Net of allowance for credit losses

Securities by Type of Issuance

The Company has investments in both publicly and privately issued securities.
The Company's ability to sell either type of security is a function of overall
market liquidity which is impacted by, among other things, the amount of
outstanding securities of a particular issuer or issuance, trading history of
the issue or issuer, overall market conditions, and idiosyncratic events
affecting the specific issue or issuer.



                                       52

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following table details investment securities by type of issuance as of
December 31.

                   Investment Securities by Type of Issuance

                                                    2022                                     2021
                                       Amortized             Fair               Amortized              Fair
(In millions)                          Cost (1)             Value               Cost (1)              Value
Publicly issued securities:
Fixed maturity securities              $ 77,176            $ 79,090            $  88,552            $ 103,034
Equity securities                           882                 882                  950                  950
   Total publicly issued                 78,058              79,972               89,502              103,984
Privately issued securities: (2)
Fixed maturity securities (3)            17,349              17,861               18,817               22,531
Equity securities                           209                 209                  653                  653
   Total privately issued                17,558              18,070               19,470               23,184
   Total investment securities         $ 95,616            $ 98,042            $ 108,972            $ 127,168

(1) Net of allowance for credit losses
(2) Primarily consists of securities owned by Aflac Japan (3) Excludes Rule 144A securities

The following table details the Company's reverse-dual currency securities as of
December 31.

                      Reverse-Dual Currency Securities(1)

(Amortized cost, in millions)                                      2022                 2021
Privately issued reverse-dual currency securities               $ 4,049     

$ 4,784
Publicly issued collateral structured as reverse-dual currency
securities

                                                        1,383                1,596
Total reverse-dual currency securities                          $ 5,432              $ 6,380
Reverse-dual currency securities as a percentage of total
investment
  securities                                                        5.7  %               5.9  %

(1)Principal payments in yen and interest payments in dollars

Aflac Japan has a portfolio of privately issued securities to better match
liability characteristics and secure higher yields than those available on
Japanese government or other public corporate bonds. Aflac Japan's investments
in yen-denominated privately issued securities consist primarily of non-Japanese
issuers, are rated investment grade at purchase and have longer maturities,
thereby allowing the Company to improve asset/liability matching and overall
investment returns. These securities are generally either privately negotiated
arrangements or issued under medium-term note programs and have standard
documentation commensurate with credit ratings of the issuer, except when
internal credit analysis indicates that additional protective and/or event-risk
covenants were required. Many of these investments have protective covenants
appropriate to the specific investment. These may include a prohibition of
certain activities by the borrower, maintenance of certain financial measures,
and specific conditions impacting the payment of the Company's notes.

                               HEDGING ACTIVITIES

The Company uses derivative contracts to hedge foreign currency exchange rate
risk and interest rate risk. The Company uses various strategies, including
derivatives, to manage these risks. See Item 7A. Quantitative and Qualitative
Disclosures About Market Risk for more information about market risk and the
Company's use of derivatives.

Derivatives are designed to reduce risk on an economic basis while minimizing
the impact on financial results. The Company's derivatives programs vary
depending on the type of risk being hedged. See Note 4 of the Notes to the
Consolidated Financial Statements for:

•A description of the Company's derivatives, hedging strategies and underlying
risk exposure.
•Information about the notional amount and fair market value of the Company's
derivatives.
•The unrealized and realized gains and losses impact on adjusted earnings of
derivatives in cash flow, fair value, net investments in foreign operations, or
non-qualifying hedging relationships.


                                       53

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Foreign Currency Exchange Rate Risk Hedge Program

The Company has deployed the following hedging strategies to mitigate exposure
to foreign currency exchange rate risk:

•Aflac Japan hedges U.S. dollar-denominated investments back to yen (see Aflac
Japan's U.S. Dollar-Denominated Hedge Program below).

•Aflac Japan maintains certain unhedged U.S. dollar-denominated securities,
which serve as an economic currency hedge of a portion of the Company's
investment in Aflac Japan (see Aflac Japan's U.S. Dollar-Denominated Hedge
Program below).

•The Parent Company designates yen-denominated liabilities (notes payable and
loans) as non-derivative hedging instruments and designates certain foreign
currency forwards and options as derivative hedges of the Company's net
investment in Aflac Japan (see Enterprise Corporate Hedging Program below).

•The Parent Company enters into forward and option contracts to accomplish a
dual objective of hedging foreign currency exchange rate risk related to
dividend payments by its subsidiary, ALIJ, and reducing enterprise-wide hedge
costs (see Enterprise Corporate Hedging Program below).

The following table presents metrics related to Aflac Japan's U.S.
dollar-denominated hedge program and the Parent Company's enterprise corporate
hedging program, including associated amortized hedge costs/income, for the
years ended December 31. See the Results of Operations section of this MD&A for
the Company's definition of amortized hedge costs/income.

                                                                            2022               2021
Aflac Japan:
FX Forwards

FX forward (sell USD, buy yen) notional at end of period (in
billions) (1)

                                                               $4.1               $6.4
  Weighted average remaining tenor (in months) (2)                           .7                2.6
  Amortized hedge income (cost) for period (in millions)                   $(44)              $(55)
FX Options
FX option notional at the end of period (in billions) (1)                  $13.5              $11.6
Weighted average remaining tenor (in months) (2)                            6.4                6.0
Amortized hedge income (cost) for period (in millions)                     $(68)              $(22)
Corporate and other (Parent Company):
FX Forwards

FX forward (buy USD, sell yen) notional at end of period (in
billions)(1)

                                                                $5.0               $5.0
  Weighted average remaining tenor (in months)(2)                           10.8               11.5
  Amortized hedge income (cost) for period (in millions)                    $71                $62
FX Options
FX option notional at the end of period (in billions) (1)                   $2.6               $1.9
Weighted average remaining tenor (in months) (2)                            9.0                7.3
Amortized hedge income (cost) for period (in millions)                      $(3)               $(5)


(1) Notional is reported net of any offsetting positions within Aflac Japan or
the Parent Company, respectively.
(2) Tenor based on period reporting date to settlement date

Amortized hedge costs/income can fluctuate based upon many factors, including
the derivative notional amount, the length of time of the derivative contract,
changes in both U.S. and Japan interest rates, and supply and demand for dollar
funding. Amortized hedge costs/income have fluctuated in recent periods due to
changes in the previously mentioned factors.

Aflac Japan's U.S. Dollar-Denominated Hedge Program (U.S. Dollar Program)

Aflac Japan buys U.S. dollar-denominated investments, typically corporate bonds,
and hedges them back to yen with foreign currency forwards and options to hedge
foreign currency exchange rate risk. This economically creates yen assets that
match yen liabilities during the life of the derivative and provides favorable
capital treatment under the Japan SMR



                                       54
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
calculations. The currency risk being hedged is generally based on fair value of
hedged investments. The following table summarizes the U.S. dollar-denominated
investments held by Aflac Japan as of December 31.

                                                                  2022                           2021
                                                         Amortized      Fair            Amortized      Fair
(In millions)                                             Cost (1)      Value            Cost (1)      Value

Available-for-sale securities:

 Fixed maturity securities                              $  14,321    $ 15,191          $  17,615    $ 20,478

Equity securities                                              33          33                 24          24

Commercial mortgage and other loans:

 Transitional real estate loans (floating rate)             5,133       5,088              4,226       4,293
 Commercial mortgage and other loans                        1,269       1,129              1,217       1,265
 Middle market loans (floating rate)                        4,557       4,545              4,297       4,352
Other investments                                           1,899       1,899              1,534       1,534
   Total U.S. Dollar Program                               27,212      27,885             28,913      31,946

Available-for-sale securities:

Fixed maturity securities - economically converted to
yen

                                                         2,209       2,795              2,236       3,328

Total U.S. dollar-denominated investments in Aflac
Japan

                                                   $  29,421    $ 

30,680 $ 31,149 $ 35,274

(1) Net of allowance for credit losses

The U.S. Dollar Program includes all U.S. dollar-denominated investments in
Aflac Japan other than the investments in certain consolidated VIEs where the
instrument is economically converted to yen as a result of a derivative in the
consolidated VIE. The Company uses one-sided foreign currency put options to
mitigate the settlement risk on U.S. dollar-denominated assets related to
extreme foreign currency rate changes. From time to time, Aflac Japan also
maintains a collar program on a portion of its U.S. Dollar Program to mitigate
against more extreme moves in foreign exchange and therefore support SMR. As of
December 31, 2022, there were no collars in Aflac Japan, and none of the
Company's foreign currency options hedging Aflac Japan's U.S. dollar-denominated
assets were in-the-money.

In 2021, the Company moved to a strategy that contains one-sided put options,
fewer foreign currency forwards and no collars in order to reduce its exposure
to pricing volatility and the related risk of negative settlements should there
be a material weakening in the yen. Depending on further developments, including
the possibility of further market volatility, there may be additional costs
associated with maintaining the options program. The Company is continually
evaluating other adjustments, including the possibility of changing the level of
hedging employed with the U.S. dollar-denominated investments.

As of December 31, 2022, the fair value of Aflac Japan's unhedged U.S.
dollar-denominated portfolio was $10.3 billion (excluding certain U.S.
dollar-denominated assets shown in the table above as a result of consolidation
that have been economically converted to yen using derivatives).

Foreign exchange derivatives used for hedging are periodically settled, which
results in cash receipt or payment at maturity or early termination. The
following table presents the settlements associated with the Company's currency
derivatives used for hedging Aflac Japan's U.S. dollar-denominated investments
for the years ended December 31.

(In millions)                   2022       2021

Net cash inflows (outflows) $ (757) $ 66

Enterprise Corporate Hedging Program

The Company has designated certain yen-denominated liabilities and foreign
currency forwards and options of the Parent Company as accounting hedges of its
net investment in Aflac Japan. The Company's consolidated yen-denominated net
asset position was partially hedged at $11.6 billion as of December 31, 2022,
with hedging instruments comprised of $4.0 billion of yen-denominated debt and
$7.6 billion of foreign currency forwards and options, compared with
$10.2 billion as of December 31, 2021, with hedging instruments comprised of
$3.3 billion of yen-denominated debt and $6.9 billion of foreign currency
forwards and options.



                                       55

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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The Company makes its accounting designation of net investment hedge at the
beginning of each quarter. If the total of the designated Parent Company
non-derivative and derivative notional is equal to or less than the Company's
net investment in Aflac Japan, the hedge is deemed to be effective, and the
currency exchange effect on the yen-denominated liabilities and the change in
estimated fair value of the derivatives are reported in the unrealized foreign
currency component of other comprehensive income. The Company's net investment
hedge was effective during the years ended December 31, 2022 and 2021,
respectively. For additional information on the Company's net investment hedging
strategy, see Note 4 of the Notes to the Consolidated Financial Statements.

In order to economically mitigate risks associated with the enterprise-wide
exposure to the yen and the level and volatility of hedge costs, the Parent
Company enters into foreign exchange forward and option contracts. By buying
U.S. dollars and selling yen, the Parent Company is effectively lowering its
overall economic exposure to the yen, while Aflac Japan's U.S. dollar exposure
remains reduced as a result of Aflac Japan's U.S. Dollar Program that
economically creates yen assets. Among other objectives, this strategy is
intended to offset the enterprise-wide amortized hedge costs by generating
amortized hedge income. This activity is reported in Corporate and other. The
Company continually evaluates the program's efficacy.

Interest Rate Risk Hedge Program

Aflac Japan and Aflac U.S. use interest rate swaps from time to time to mitigate
the risk of investment income volatility for certain variable-rate investments.
In 2022, the Company expanded the use of interest rate swaps for this hedging
strategy. Additionally, to manage interest rate risk associated with its U.S.
dollar-denominated investments held by Aflac Japan, from time to time the
Company utilizes interest rate swaptions.

For additional discussion of the risks associated with the foreign currency
exposure refer to the Currency Risk section in Item 7A., Quantitative and
Qualitative Disclosures about Market Risk, and Item 1A, specifically to the Risk
Factors titled "The Company is exposed to foreign currency fluctuations in the
yen/dollar exchange rate" and "Lack of availability of acceptable
yen-denominated investments could adversely affect the Company's results of
operations, financial position or liquidity."

See Note 4 of the Notes to the Consolidated Financial Statements for additional
information on the Company's hedging activities.

                               POLICY LIABILITIES

The following table presents policy liabilities by segment and in total for the
years ended December 31.

          (In millions)                                   2022          2021
          Japan segment:
          Future policy benefits                       $ 71,150      $  81,176
          Unpaid policy claims                            2,610          2,903
          Other policy liabilities                        7,835          9,534
          Total Japan policy liabilities                 81,594         93,613
          U.S. segment:
          Future policy benefits                          9,960          9,865
          Unpaid policy claims                            1,952          1,933
          Other policy liabilities                          117            119
          Total U.S. policy liabilities                  12,029         11,916
          Consolidated:
          Future policy benefits                         80,749         90,588
          Unpaid policy claims                            4,561          4,836
          Other policy liabilities                        7,948          9,648
          Total consolidated policy liabilities (1)    $ 93,258      $ 105,072

(1) The sum of the Japan and U.S. segments exceeds the total due to reinsurance
and retrocession activity.

See Note 7 of the Notes to the Consolidated Financial Statements for additional
information on the Company's policy liabilities.

                                       56

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

                                 BENEFIT PLANS

Aflac Japan and Aflac U.S. have various benefit plans. For additional
information on the Company's Japanese and U.S. plans, see Note 14 of the Notes
to the Consolidated Financial Statements.

                            POLICYHOLDER PROTECTION

Policyholder Protection Corporation

The Japanese insurance industry has a policyholder protection system that
provides funds for the policyholders of insolvent insurers. Legislation enacted
regarding the framework of the Life Insurance Policyholder Protection
Corporation (LIPPC) included government fiscal measures supporting the LIPPC. In
March 2022, Japan's Diet passed legislation that extended the government's
fiscal support of the LIPPC through March 2027. In March 2022, the LIPPC reached
the required balance for the total life industry of ¥400 billion as specified by
its Articles of Incorporation. As a result, additional contributions are not
expected to be required unless the balance is reduced due to payments made by
the LIPPC to the policyholders of insolvent insurers. Aflac Japan recognized an
expense of ¥.9 billion and ¥1.8 billion for LIPPC assessments in the years ended
December 31, 2022 and 2021, respectively.

Guaranty Fund Assessments

Under U.S. state guaranty association laws, certain insurance companies can be
assessed (up to prescribed limits) for certain obligations to the policyholders
and claimants of impaired or insolvent insurance companies that write the same
line or similar lines of business. The amount of the guaranty fund assessment
that an insurer is assessed is based on its proportionate share of premiums in
that state. See Note 15 of the Notes to the Consolidated Financial Statements
for further information on guaranty fund assessments.

                        LIQUIDITY AND CAPITAL RESOURCES

Liquidity refers to the ability to generate sufficient cash resources to meet
the payment obligations of the Company. Capital refers to the long-term
financial resources available to support the operations of the businesses, fund
business growth and provide for an ability to withstand adverse circumstances.
Financial leverage (leverage) refers to an investment strategy of using debt to
increase the potential ROE. The Company targets and actively manages liquidity,
capital and leverage in the context of a number of considerations, including:

•business investment and growth needs
•strategic growth objectives
•financial flexibility and obligations
•capital support for hedging activity
•a constantly evolving business and economic environment
•a balanced approach to capital allocation and shareholder deployment.

The governance framework supporting liquidity, capital and leverage includes
global senior management and board committees that review and approve all
significant capital related decisions.

The Company's cash and cash equivalents include unrestricted cash on hand, money
market instruments, and other debt instruments with a maturity of 90 days or
less when purchased, all of which has minimal market, settlement or other risk
exposure. The target minimum amount for the Parent Company's cash and cash
equivalents is approximately $1.8 billion to provide a capital buffer and
liquidity support at the holding company. This amount excludes $400 million of
proceeds from the issuance of senior sustainability notes in 2021, unallocated
proceeds of which contribute to total cash but are not intended to support
holding company liquidity. The Company remains committed to prudent liquidity
and capital management. At December 31, 2022, the Company held $3.9 billion in
cash and cash equivalents for stress conditions, which includes the Parent
Company's target minimum amount of $1.8 billion.

Aflac Japan and Aflac U.S. generate cash flows from their operations and provide
the primary sources of liquidity to the Parent Company through management fees
and dividends, with Aflac Japan being the largest contributor. The primary uses
of cash by the Parent Company are shareholder dividends, the repurchase of its
common stock, interest on its outstanding indebtedness and operating expenses.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The following table presents the amounts provided to the Parent Company for the
years ended December 31.

              Liquidity Provided by Subsidiaries to Parent Company

             (In millions)                                  2022        2021
             Management fees paid by subsidiaries         $  136      $  130
             Dividends declared or paid by subsidiaries    3,006       2,791

The following table details Aflac Japan remittances, which are included in the
totals above, for the years ended December 31.

                            Aflac Japan Remittances

(In millions of dollars and billions of yen)                         2022                 2021
Aflac Japan management fees paid to Parent Company                $    61              $    59

Aflac Japan dividends declared or paid to Parent Company (in
dollars)

                                                            2,412                2,138

Aflac Japan dividends declared or paid to Parent Company (in yen) ¥ 324.2

             ¥ 236.7



The Company intends to maintain higher than historical levels of liquidity and
capital at the Parent Company for stress conditions and with the goals of
addressing the Company's hedge costs and related potential need for collateral
and mitigating against long-term weakening of the Japanese yen. Further, the
Company plans to continue to maintain a portfolio of unhedged U.S.
dollar-denominated investments at Aflac Japan and to consider whether the amount
of such investments should be increased or decreased relative to the Company's
view of economic equity surplus in Aflac Japan in light of potentially rising
hedge costs and other factors. See the Hedging Activity subsection of this MD&A
for more information.

The Company believes that its balance of cash and cash equivalents and cash
generated by operations will be sufficient to satisfy both its short-term and
long-term cash requirements and plans for cash, including material cash
requirements from known contractual obligations and returning capital to
shareholders through share repurchases and dividends.

In addition to cash and cash equivalents, the Company also maintains credit
facilities, both intercompany and with external partners, and a number of other
available tools to support liquidity needs on a global basis. In September 2021,
the Parent Company filed a shelf registration statement with the SEC that allows
the Company to issue an indefinite amount of debt securities, in one or more
series, from time to time until September 2024. The Company believes outside
sources for additional debt and equity capital, if needed, will continue to be
available. Additionally, as of December 31, 2022, the Parent Company and Aflac
had four lines of credit with third parties and ten intercompany lines of
credit. The Company was in compliance with all of the covenants of its notes
payable and lines of credit at December 31, 2022. For additional information,
see Note 9 of the Notes to the Consolidated Financial Statements.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The following table presents the estimated payments of the Company's material
cash requirements from known contractual obligations as of December 31, 2022.
The Company translated its yen-denominated obligations using the December 31,
2022, exchange rate. Actual future payments as reported in dollars will
fluctuate with changes in the yen/dollar exchange rate.

                                                      Total                Total             Short-term            Long-term
(In millions)                                      Liability(1)           Payments            Payments             Payments

Future policy benefits liability (Note 7)(2) $ 80,749 $ 193,394 $ 7,763 $ 185,631
Unpaid policy claims liability (Note 7)(3)

               4,561              4,555                 2,862               1,693
Other policyholders' funds (Note 7)(4)                   6,123              7,533                   352               7,181
Long-term debt - principal (Note 9)                      7,295              7,103                     0               7,103
Long-term debt - interest (Note 9)                          44              2,705                   165               2,540
Cash collateral on loaned securities (Note 3)            1,809              1,809                 1,809                   0
Operating service agreements (Note 15)                        N/A             386                   175                 211
Operating lease obligations (Note 9)                       139                144                    44                 100
Finance lease obligations (Note 9)                           8                  8                     3                   5
Total contractual obligations                    $     100,728          $ 217,637          $     13,173          $  204,464


(1) Liability amounts are those reported on the consolidated balance sheet as of
December 31, 2022.
(2) The estimated payments reflect future estimated cash payments to be made to
policyholders and others for future policy benefits. These projected cash
outflows are based on assumptions for future policy persistency, mortality,
morbidity, and other assumptions comparable with the Company's experience,
consider future premium receipts on current policies in force and assume market
growth and interest crediting consistent with assumptions used in amortizing
deferred acquisition costs. These cash outflows are undiscounted with respect to
interest and, as a result, the sum of the cash outflows exceeds the
corresponding liability amount. Due to the significance of the assumptions used,
actual cash outflow amounts and timing will differ, possibly materially, from
these estimates.
(3) The estimated payments include assumptions as to the timing of policyholders
reporting claims for prior periods and the amount of those claims. Actual
amounts and timing of unpaid policy claims payments may differ significantly
from the estimates above.
(4) These cash outflows are undiscounted with respect to interest and, as a
result, the sum of the cash outflows exceeds the corresponding liability amount.

For more information on the Company's major contractual obligations, see the
applicable Note in the Notes to the Consolidated Financial Statements as
indicated in the line items in the table above.

The Company's consolidated financial statements convey its financing
arrangements during the periods presented. The Company has not engaged in
material intra-period short-term financings during the periods presented that
are not otherwise reported in its balance sheet or disclosed therein. As of
December 31, 2022, the Company had no material letters of credit, standby
letters of credit, guarantees or standby repurchase obligations. The Company has
not entered into transactions involving the transfer of financial assets with an
obligation to repurchase financial assets that have been accounted for as a sale
under applicable accounting standards, including securities lending
transactions. See Notes 1, 3, and 4 of the Notes to the Consolidated Financial
Statements for more information on the Company's securities lending and
derivative activities. With the exception of disclosed activities in those
referenced footnotes and the Risk Factors entitled, "The Company is exposed to
foreign currency fluctuations in the yen/dollar exchange rate" and "Lack of
availability of acceptable yen-denominated investments could adversely affect
the Company's results of operations, financial position or liquidity," the
Company is not aware of any trend, demand, commitment, event or uncertainty that
would reasonably result in its liquidity increasing or decreasing by a material
amount.

                            Consolidated Cash Flows

The Company consistently generates positive cash flows from operations, and has
the ability to adjust cash flow management from other sources of liquidity
including reinvestment cash flows and selling investments in order to meet
short-term cash needs.

The Company translates cash flows for Aflac Japan's yen-denominated items into
U.S. dollars using weighted-average exchange rates. In years when the yen
weakens, translating yen into dollars causes fewer dollars to be reported. When
the yen strengthens, translating yen into dollars causes more dollars to be
reported.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The following table summarizes consolidated cash flows by activity for the years
ended December 31.

(In millions)                                      2022         2021
Operating activities                            $  3,879      $ 5,051
Investing activities                              (1,540)      (2,378)
Financing activities                              (3,551)      (2,739)

Exchange effect on cash and cash equivalents 104 (24)
Net change in cash and cash equivalents $ (1,108) $ (90)

                              Operating Activities

The principal cash inflows for the Company's insurance activities come from
insurance premiums and investment income. The principal cash outflows are the
result of policy claims, operating expenses, income tax, as well as interest
expense. As a result of policyholder aging, claims payments are expected to
gradually increase over the life of a policy. Therefore, future policy benefit
reserves are accumulated in the early years of a policy and are designed to help
fund future claims payments.

The Company expects its future cash flows from premiums and investment
portfolios to be sufficient to meet its cash needs for benefits and expenses.
Consolidated cash flow from operations decreased 23.2% in 2022, compared with
2021.

                              Investing Activities

The Company's investment objectives provide for liquidity primarily through the
purchase of publicly traded investment-grade debt securities. Prudent portfolio
management dictates that the Company attempts to match the duration of its
assets with the duration of its liabilities. Currently, when the Company's fixed
maturity securities mature, the proceeds may be reinvested at a yield below that
required for the accretion of policy benefit liabilities on policies issued in
earlier years. However, the long-term nature of the Company's business and its
strong cash flows provide the Company with the ability to minimize the effect of
mismatched durations and/or yields identified by various asset adequacy
analyses. From time to time or when market opportunities arise, the Company
disposes of selected fixed maturity securities that are available for sale to
improve the duration matching of assets and liabilities, improve future
investment yields, and/or re-balance its portfolio. As a result, dispositions
before maturity can vary significantly from year to year.

As part of its overall corporate strategy, the Company has committed
$400 million to Aflac Ventures, LLC (Aflac Ventures), as opportunities emerge.
Aflac Ventures is a subsidiary of Aflac Global Ventures, LLC (Aflac Global
Ventures) which is reported in Corporate and other. The central mission of Aflac
Global Ventures is to support the organic growth and business development needs
of Aflac Japan and Aflac U.S. with an emphasis on digital applications designed
to improve the customer experience, gain efficiencies, and develop new markets
in an effort to enhance and defend long-term shareholder value. Investments are
included in equity securities or the other investments line in the consolidated
balance sheets.

As part of an arrangement with Federal Home Loan Bank of Atlanta (FHLB), Aflac
U.S. obtains low-cost funding from FHLB supported by acceptable forms of
collateral pledged by Aflac U.S. In 2022, Aflac U.S. borrowed and repaid $599
million under this program. As of December 31, 2022, Aflac U.S. had outstanding
borrowings of $609 million reported in its balance sheet.

See Note 3 of the Notes to the Consolidated Financial Statements for details on
certain investment commitments.

                              Financing Activities

Cash flows from financing activities consist primarily of share repurchases,
dividends to shareholders and from time to time debt issuances and redemptions.

In October 2022, the Parent Company used a portion of the net proceeds from its
September 2022 issuance of various series of senior notes to redeem $450 million
of its 3.25% senior notes due March 2025.

In September 2022, the Parent Company issued four series of senior notes
totaling ¥73.0 billion through a public debt offering under its U.S. shelf
registration statement. The first series, which totaled ¥33.4 billion, bears
interest at a fixed rate of 1.075% per annum, payable semi-annually, and will
mature in September 2029. The second series, which totaled


                                       60
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
¥21.1 billion, bears interest at a fixed rate of 1.320% per annum, payable
semi-annually, and will mature in December 2032. The third series, which totaled
¥6.5 billion, bears interest at a fixed rate of 1.594% per annum, payable
semi-annually, and will mature in September 2037. The fourth series, which
totaled ¥12.0 billion, bears interest at a fixed rate of 2.144% per annum,
payable semi-annually, and will mature in September 2052. These notes are
redeemable at the Parent Company's option at any time, in whole but not in part,
upon the occurrence of certain changes affecting U.S. taxation, as specified in
the indenture governing the terms of the issuance. In addition, the notes
maturing in September 2029, December 2032 and September 2037 are redeemable at
the Parent Company's option, in whole or in part from time to time, on or after
June 14, 2029, June 14, 2032 and March 14, 2037, respectively, at a redemption
price equal to the aggregate principal amount of the applicable series to be
redeemed plus accrued and unpaid interest on the principal amount to be redeemed
to, but excluding, the date of redemption.

In September 2022, the Parent Company used a portion of the net proceeds from
its September 2022 issuance of various series of senior notes and the August
2022 senior term loan facility to redeem $750 million of its 3.625% senior notes
due November 2024.

In August 2022, the Parent Company renewed a senior term loan facility with a
commitment amount totaling ¥107.0 billion. The first tranche of the facility,
which totaled ¥11.7 billion, bears interest at a rate per annum equal to the
Tokyo interbank market rate (TIBOR), or alternate TIBOR, if applicable, plus the
applicable TIBOR margin and will mature in August 2027. The applicable margin
ranges between .225% and .625%, depending on the Parent Company's debt ratings
as of the date of determination. The second tranche, which totaled
¥25.3 billion, bears interest at a rate per annum equal to TIBOR, or alternate
TIBOR, if applicable, plus the applicable TIBOR margin and will mature in August
2029. The applicable margin ranges between .325% and .725%, depending on the
Parent Company's debt ratings as of the date of determination. The third
tranche, which totaled ¥70.0 billion, bears interest at a rate per annum equal
to TIBOR, or alternate TIBOR, if applicable, plus the applicable TIBOR margin
and will mature in August 2032. The applicable margin ranges between .475% and
1.025%, depending on the Parent Company's debt ratings as of the date of
determination.

In May 2021, the Parent Company used a portion of the net proceeds from the
April 2021 issuance of its various series of senior notes to redeem $700 million
of its 3.625% senior notes due June 2023.

In April 2021, the Parent Company issued five series of senior notes totaling
¥82.0 billion through a public debt offering under its then existing U.S. shelf
registration statement. The first series, which totaled ¥30.0 billion, bears
interest at a fixed rate of .633% per annum, payable semi-annually, and will
mature in April 2031. The second series, which totaled ¥12.0 billion, bears
interest at a fixed rate of .844% per annum, payable semi-annually, and will
mature in April 2033. The third series, which totaled ¥10.0 billion, bears
interest at a fixed rate of 1.039% per annum, payable semi-annually, and will
mature in April 2036. The fourth series, which totaled ¥10.0 billion, bears
interest at a fixed rate of 1.264% per annum, payable semi-annually, and will
mature in April 2041. The fifth series, which totaled ¥20.0 billion, bears
interest at a fixed rate of 1.560% per annum, payable semi-annually, and will
mature in April 2051. The notes are redeemable at the Parent Company's option
(i) at any time, in whole but not in part, upon the occurrence of certain
changes affecting U.S. taxation, as specified in the indenture governing the
terms of the issuance or (ii) on or after the date that is six months prior to
the stated maturity date of the series, in whole or in part, at a redemption
price equal to the aggregate principal amount to be redeemed plus accrued and
unpaid interest on the principal amount to be redeemed to, but excluding, the
date of redemption.

In March 2021, the Parent Company issued $400 million of senior sustainability
notes through a U.S. public debt offering. The notes bear interest at a fixed
rate of 1.125% per annum, payable semi-annually, and will mature in March 2026.
The Company intends, but is not contractually committed, to allocate an amount
at least equivalent to the net proceeds from this issuance exclusively to
existing or future investments in, or financing of, assets, businesses or
projects that meet the eligibility criteria of the Company's sustainability bond
framework described in the offering documentation in connection with such notes.
These notes are redeemable at the Parent Company's option in whole at any time
or in part from time to time at a redemption price equal to the greater of: (i)
the aggregate principal amount of the notes to be redeemed or (ii) the amount
equal to the sum of the present values of the remaining scheduled payments for
principal of and interest on the notes to be redeemed, not including any portion
of the payments of interest accrued as of such redemption date, discounted to
such redemption date on a semiannual basis at the yield to maturity for a U.S.
Treasury security with a maturity comparable to the remaining term of the notes,
plus 10 basis points, plus in each case, accrued and unpaid interest on the
principal amount of the notes to be redeemed to, but excluding, such redemption
date.

See Note 9 of the Notes to the Consolidated Financial Statements for further
information on the debt issuances discussed above.

                                       61
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
Cash returned to shareholders through treasury stock purchases and dividends was
$3.4 billion in 2022, compared with $3.2 billion in 2021.

The following tables present a summary of treasury stock activity during the
years ended December 31.

                            Treasury Stock Purchased

(In millions of dollars and thousands of shares)     2022         2021
Treasury stock purchases                           $ 2,401      $ 2,301
Number of shares purchased:
Share repurchase program                            39,187       43,327
Other                                                  370          437
  Total shares purchased                            39,557       43,764



                             Treasury Stock Issued

(In millions of dollars and thousands of shares) 2022 2021
Stock issued from treasury:

  Cash financing                                   $    17      $    26
  Noncash financing                                     57           55
  Total stock issued from treasury                 $    74      $    81
Number of shares issued                              1,341        1,721



In November 2022, the Company's board of directors authorized the purchase of an
additional 100 million shares of its common stock. As of December 31, 2022, a
remaining balance of 116.6 million shares of the Company's common stock was
available for purchase under share repurchase authorizations by its board of
directors. See Note 11 of the Notes to the Consolidated Financial Statements for
additional information.

In August 2022, the IRA was signed into U.S. law. Effective January 1, 2023, the
law imposes a 1% excise tax on the Company's repurchase of its common stock.

Cash dividends paid to shareholders in 2022 of $1.60 per share increased 21.2%
over 2021. The following table presents the dividend activity for the years
ended December 31.

                         Dividends Paid to Shareholders

(In millions)                                     2022        2021
Dividends paid in cash                          $   979      $ 855

Dividends through issuance of treasury shares 37 32
Total dividends to shareholders

                 $ 1,016      $ 887



In November 2022, the board of directors announced a 5.0% increase in the
quarterly cash dividend, effective with the first quarter of 2023. The first
quarter 2023 cash dividend of $.42 per share is payable on March 1, 2023, to
shareholders of record at the close of business on February 15, 2023.

                            Regulatory Restrictions

Aflac Japan

Aflac Japan is required to meet certain financial criteria as governed by
Japanese corporate law in order to provide dividends to the Parent Company.
Under these criteria, dividend capacity at the Japan subsidiary is basically
defined as total equity excluding common stock, accumulated other comprehensive
income amounts, capital reserves (representing statutorily required amounts in
Japan) but reduced for net after-tax unrealized losses on available-for-sale
securities. These dividend capacity requirements are generally aligned with the
SMR. Japan's FSA maintains its own solvency standard which is quantified through
the SMR. Aflac Japan's SMR is sensitive to interest rate, credit spread, and
foreign exchange rate changes, therefore the Company considers different ways to
offset significant declines in SMR, including


                                       62
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
the reduction of subsidiary dividends paid to the Parent Company and Parent
Company capital contributions. In the event of a rapid change in market risk
conditions causing SMR to decline, the Company has one senior unsecured
revolving credit facility in the amount of ¥100 billion and a committed
reinsurance facility in the amount of approximately ¥120 billion as a capital
contingency plan. Additionally, the Company could take action to enter into
derivatives on unhedged U.S. dollar-denominated investments with foreign
currency options or forwards. See Notes 8 and 9 of the Notes to the Consolidated
Financial Statements for additional information.

The Company has already undertaken various measures to mitigate the sensitivity
of Aflac Japan's SMR. For example, the Company employs policy reserve matching
(PRM) investment strategies, which is a Japan-specific accounting treatment that
reduces SMR interest rate sensitivity since PRM-designated investments are
carried at amortized cost consistent with corresponding liabilities. In order
for a PRM-designated asset to be held at amortized cost, there are certain
criteria that must be maintained. The primary criterion relates to maintaining
the duration of designated assets and liabilities within a specified tolerance
range. If the duration difference is not maintained within the specified range
without rebalancing, then a certain portion of the assets must be re-classified
as available for sale and held at fair value with any associated unrealized gain
or loss recorded in surplus. To rebalance, assets may need to be sold in order
to maintain the duration with the specified range, resulting in realizing a gain
or loss from the sale. For U.S. GAAP, PRM investments are categorized as
available for sale. The Company also uses foreign currency derivatives to hedge
a portion of its U.S. dollar-denominated investments. See Notes 3, 4 and 8 of
the Notes to the Consolidated Financial Statements for additional information on
the Company's investment strategies, hedging activities, and reinsurance,
respectively.

Aflac Japan's SMR ratio remains high and reflects a strong capital and surplus
position. As of December 31, 2022, Aflac Japan's SMR was 878%, compared with
1,012% at December 31, 2021. The Company is committed to maintaining strong
capital levels, consistent with maintaining current insurance financial strength
and credit ratings.

The FSA is considering the introduction of an economic value-based solvency
regime based on the Insurance Capital Standards (ICS) for insurance companies in
Japan. The FSA is currently conducting field testing with insurance companies in
Japan for the purpose of investigating the impact of the introduction of
regulations. The FSA published provisional specifications in June 2022. Final
specifications are expected to be decided in 2024, and a new capital regime to
replace the current solvency regime is expected to be introduced in 2025.

Aflac U.S.

A life insurance company's statutory capital and surplus is determined according
to rules prescribed by the NAIC, as modified by the insurance department in the
insurance company's state of domicile. Statutory accounting rules are different
from U.S. GAAP and are intended to emphasize policyholder protection and company
solvency. The continued long-term growth of the Company's business may require
increases in the statutory capital and surplus of its insurance operations. The
Company's insurance operations may secure additional statutory capital through
various sources, such as internally generated statutory earnings, reduced
dividends paid to the Parent Company, capital contributions by the Parent
Company from funds generated through debt or equity offerings, or reinsurance
transactions. The NAIC's RBC formula is used by insurance regulators to help
identify inadequately capitalized insurance companies. The RBC formula
quantifies insurance risk, business risk, asset risk and interest rate risk by
weighing the types and mixtures of risks inherent in the insurer's operations.

The combined RBC ratio for Aflac U.S. as of December 31, 2022 was 732%, compared
with 659% as of December 31, 2021. The Company calculates its combined RBC ratio
to include all U.S. regulated life insurance entities as if a single combined
U.S. RBC entity net of intercompany items related to capital resources and risk.
The Company intends to maintain a target combined RBC over time of approximately
400% for Aflac U.S., consistent with the Company's risk management practices.

The table below presents RBC ratios for the Company's U.S. life insurance
subsidiaries as of December 31, the most recently statutory fiscal year-end for
the subsidiaries for which RBC was filed.

                    2022         2021
Aflac                692  %       635  %
CAIC               1,056          832
TOIC               4,321        5,829
Aflac New York       859        1,089





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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The NAIC completed its Solvency Modernization Initiative (SMI) process relating
to updating the U.S. insurance solvency regulation framework. The SMI focused on
key issues such as capital requirements, governance and risk management, group
supervision, reinsurance, statutory accounting and financial reporting matters.
The NAIC still has some ongoing initiatives related to SMI, such as monitoring
the international efforts on group capital requirements as well as RBC. The NAIC
utilizes a group capital calculation (GCC) that conceptually uses an RBC
aggregation methodology for all entities within the insurance company holding
system. The GCC is intended to be a regulatory tool used by regulators as a
means to standardize group capital requirements. In 2021, the NAIC concluded its
analysis of bond factor changes and formally adopted the new factors as proposed
by Moody's Analytics. This initiative expanded the RBC bond factors from six
designations to 20 designations to more closely align with rating scales used by
rating agencies. The adopted changes did not have a significant impact on the
combined RBC ratio for Aflac U.S.

Aflac, CAIC and TOIC are domiciled in Nebraska and are subject to its
regulations. The NDOI imposes certain limitations and restrictions on payments
of dividends, management fees, loans and advances to the Parent Company. Under
Nebraska insurance law, prior approval of the NDOI is required for dividend
distributions that exceed the greater of the net income from operations, which
excludes net investment gains, for the previous year determined under statutory
accounting principles, or 10% of statutory capital and surplus as of the
previous year-end. Dividends declared by Aflac during 2023 in excess of $1.1
billion would be considered extraordinary and require such approval. Similar
laws apply in New York, the domiciliary jurisdiction of Aflac New York.

                      Privacy and Cybersecurity Governance

The Company's Board of Directors has adopted an information security policy
directing management to establish and operate a global information security
program with the goals of monitoring existing and emerging threats and ensuring
that the Company's information assets and data, and the data of its customers,
are appropriately protected from loss or theft. The Board has delegated
oversight of the Company's information security program to the Audit and Risk
Committee. The Company's senior officers, including its Global Security and
Chief Information Security Officer, are responsible for the operation of the
global information security program and communicates quarterly with the Audit
and Risk Committee on the program, including with respect to the state of the
program, compliance with applicable regulations, current and evolving threats,
and recommendations for changes in the information security program. The global
information security program also includes a cybersecurity incident response
plan that is designed to provide a management framework across Company functions
for a coordinated assessment and response to potential security incidents. This
framework establishes a protocol to report certain incidents to the Global
Security and Chief Information Security Officer and other senior officers, with
the goal of timely assessing such incidents, determining applicable disclosure
requirements and communicating with the Audit and Risk Committee. The incident
response plan directs the executive officers to report certain incidents
immediately and directly to the Lead Non-Management Director.

                                     Other

For information regarding commitments and contingent liabilities, see Note 15 of
the Notes to the Consolidated Financial Statements.

                             Additional Information

Investors should note that the Company announces material financial information
in its SEC filings, press releases and public conference calls. In accordance
with SEC guidance, the Company may also use the Investor Relations section of
the Company's website (http://investors.aflac.com) to communicate with investors
about the Company. It is possible that the financial and other information the
Company posts there could be deemed to be material information. The information
on the Company's website is not part of this document. Further, the Company's
references to website URLs are intended to be inactive textual references only.

                         CRITICAL ACCOUNTING ESTIMATES

The Company prepares its financial statements in accordance with U.S. GAAP.
These principles are established primarily by the FASB. In this MD&A, references
to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards
Codification™ (ASC). The preparation of financial statements in conformity with
U.S. GAAP requires the Company to make estimates based on currently available
information when recording transactions resulting from business operations. The
estimates that the Company deems to be most critical to an understanding of its
results of operations and financial condition are those related to the valuation
of investments and derivatives, DAC, liabilities for future policy benefits and
unpaid policy claims, and income taxes. The preparation and evaluation of these
critical accounting estimates involve the use of various assumptions developed
from management's analyses and judgments. The


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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
application of these critical accounting estimates determines the values at
which 93% of the Company's assets and 80% of its liabilities are reported as of
December 31, 2022, and thus has a direct effect on net earnings and
shareholders' equity. Subsequent experience or use of other assumptions could
produce significantly different results.

Valuation of Investments, Including Derivatives

The Company's investments, primarily consisting of debt and equity securities,
include both publicly issued and privately issued securities. For publicly
issued securities, the Company determines the fair values from quoted market
prices readily available from public exchange markets and price quotes and
valuations from third party pricing vendors. For the majority of privately
issued securities and derivatives associated with VIEs within the Company's
investment portfolio, a third party pricing vendor has developed valuation
models that the Company utilizes to determine fair values. Starting in June 2021
and July 2022, respectively, these models and associated processes and controls
were transitioned to and executed by Company personnel. For the remaining
privately issued securities, the Company uses non-binding price quotes from
outside brokers. The Company has refined its valuation model for private
placements to explicitly incorporate currency basis swap adjustments (market
observable data) to assumed interest rate curves where appropriate.

The Company estimates the fair values of its securities on a monthly basis. The
Company monitors the estimated fair values obtained from its pricing vendors and
brokers for consistency from month to month, while considering current market
conditions. The Company also periodically discusses with its pricing brokers and
vendors the pricing techniques they use to monitor the consistency of their
approach and periodically assess the appropriateness of the valuation level
assigned to the values obtained from them. If a fair value appears unreasonable,
the Company will re-examine the inputs and assess the reasonableness of the
pricing data with the vendor. Additionally, the Company may compare the inputs
to relevant market indices and other performance measurements. Based on
management's analysis, the valuation is confirmed or may be revised if there is
evidence of a more appropriate estimate of fair value based on available market
data. The Company has performed verification of the inputs and calculations in
any valuation models to confirm that the valuations represent reasonable
estimates of fair value. Inputs used to value derivatives include, but are not
limited to, interest rates, credit spreads, foreign currency forward and spot
rates, and interest volatility.

The Company estimates an expected lifetime credit loss on investments measured
at amortized cost including held-to-maturity fixed maturity securities, loan
receivables and loan commitments on a quarterly basis. For the Company's
available-for-sale fixed maturity securities, the Company evaluates estimated
credit losses only when the fair value of the available-for-sale fixed maturity
security is below its amortized cost basis

The Company's approach to estimating credit losses is complex and incorporates
significant judgments. In addition to a security, or an asset class, or an
issuer-specific credit fundamentals, it considers past events, current economic
conditions and forecasts of future economic conditions. The Company's estimates
are revised as conditions change and new information becomes available.

See the tabular disclosure entitled "Sensitivity of Fair Values of Financial
Instruments to Interest Rate Change" in Item 7A. Quantitative and Qualitative
Disclosures About Market Risk and Notes 1, 3, 4 and 5 of the Notes to the
Consolidated Financial Statements for additional information.

Deferred Policy Acquisition Costs and Policy Liabilities

Insurance premiums for most of the Company's health and life policies, including
cancer, accident, hospital, critical illness, dental, vision, term life, whole
life, long-term care and disability, are recognized as earned premiums over the
premium-paying periods of the contracts when due from policyholders. When earned
premiums are reported, the related amounts of benefits and expenses are charged
against such revenues, so that profits are recognized in proportion to earned
premiums during the period the policies are expected to remain in force. This
association is accomplished by means of annual additions to the liability for
future policy benefits and the deferral and subsequent amortization of policy
acquisition costs.

Premiums from the Company's products with limited-pay features, including term
life, whole life, WAYS, and child endowment, are collected over a significantly
shorter period than the period over which benefits are provided. Premiums for
these products are recognized as earned premiums over the premium-paying periods
of the contracts when due from policyholders. Any gross premium in excess of the
net premium is deferred and recorded in earnings, such that profits are
recognized in a constant relationship with insurance in force. Benefits are
recorded as an expense when they are incurred. A liability for future policy
benefits is recorded when premiums are recognized using the net premium method.



                                       65

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Deferred Policy Acquisition Costs

The calculation of DAC and the liability for future policy benefits requires the
use of estimates based on sound actuarial valuation techniques. For new policy
issues, the Company reviews its actuarial assumptions and deferrable acquisition
costs each year and revise them when necessary to more closely reflect recent
experience and studies of actual acquisition costs. For policies in force, the
Company evaluates DAC by major product groupings to determine that they are
recoverable from future revenues, and any amounts determined not to be
recoverable are charged against net earnings. See Note 6 of the Notes to the
Consolidated Financial Statements for a detail of the DAC activity for the past
two years.

Policy Liabilities

The Company's policy liabilities, which are determined in accordance with
applicable guidelines as defined under U.S. GAAP and Actuarial Standards of
Practice, include two components that involve analysis and judgment: future
policy benefits and unpaid policy claims, which accounted for 87% and 5% of
total policy liabilities as of December 31, 2022, respectively.

Future policy benefits provide for claims that will occur in the future and are
generally calculated as the present value of future expected benefits to be
incurred less the present value of future expected net benefit premiums. The
Company calculates future policy benefits based on assumptions of morbidity,
mortality, persistency and interest. These assumptions are generally established
and considered locked at the time a policy is issued. The assumptions used in
the calculations are closely related to those used in developing the gross
premiums for a policy. As required by U.S. GAAP, the Company also includes a
provision for adverse deviation, which is intended to accommodate adverse
fluctuations in actual experience. These assumptions may only be unlocked in
certain circumstances based on the results of periodic DAC recoverability and
premium deficiency testing.

Unpaid policy claims include those claims that have been incurred and are in the
process of payment as well as an estimate of those claims that have been
incurred but have not yet been reported to the Company. The Company computes
unpaid policy claims on a non-discounted basis using statistical analyses of
historical claims payments, adjusted for current trends and changed conditions.
The Company updates the assumptions underlying the estimate of unpaid policy
claims regularly and incorporates its historical experience as well as other
data that provides information regarding the Company's outstanding liability.

The Company's insurance products provide fixed-benefit amounts per occurrence
that are not subject to medical-cost inflation. Furthermore, the Company's
business is widely dispersed in both the U.S. and Japan. This geographic
dispersion and the nature of the Company's benefit structure mitigate the risk
of a significant unexpected increase in claims payments due to localized
epidemics and events of a catastrophic nature. Claims incurred under the
Company's policies are generally reported and paid in a relatively short time
frame. The unpaid claims liability is sensitive to morbidity assumptions, in
particular, severity and frequency of claims. Severity is the ultimate size of a
claim, and frequency is the number of claims incurred. The Company's claims
experience is primarily related to the demographics of its policyholders.

As a part of its established financial reporting and accounting practices and
controls, the Company performs detailed annual actuarial reviews of its
policyholder liabilities (gross premium valuation analysis) and reflects the
results of those reviews in its results of operations and financial condition as
required by U.S. GAAP. For Aflac Japan, the Company's annual reviews in 2022 and
2021 indicated no need to strengthen liabilities associated with policies in
Japan. For Aflac U.S., the Company's annual reviews in 2022 and 2021 indicated
no need to strengthen liabilities associated with policies in the U.S.



                                       66
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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
The table below reflects the growth of the future policy benefits liability for
the years ended December 31.

                             Future Policy Benefits

(In millions of dollars and billions of yen)       2022           2021
Aflac U.S.                                      $  9,960       $  9,865
Growth rate                                          1.0  %         2.0  %
Aflac Japan                                     $ 71,150       $ 81,176
Growth rate                                        (12.4) %        (8.4) %
Consolidated                                    $ 80,749       $ 90,588
Growth rate                                        (10.9) %        (7.4) %
Yen/dollar exchange rate (end of period)          132.70         115.02
Aflac Japan                                     ¥  9,442       ¥  9,337
Growth rate                                          1.1  %         1.8  %



The growth of the future policy benefits liability in yen for Aflac Japan and in
dollars for Aflac U.S. has been due to the aging of the Company's in-force block
of business and the addition of new business.

The following table summarizes certain significant assumptions made in
establishing reserves for the Company's products and the net impact that could
result from changes in these assumptions should they occur. Under U.S. GAAP, the
Company's reserves for its limited pay and long duration contracts are primarily
calculated using locked-in assumptions. As such, the adverse hypothetical
impacts illustrated in the table below are those that would increase the
Company's best estimate reserves, but would not result in a premium deficiency
requiring strengthening of reserves or write-off of DAC. The favorable
hypothetical impacts in the table below would decrease the Company's best
estimate reserves but they would not result in an immediate decrease to its U.S.
GAAP reserves (given that the Company would be required to leave the current
assumptions locked in); rather, the positive impacts would be recognized in net
earnings over the life of the policies in force.

The information below is for illustrative purposes and includes the impacts of
changes in a single assumption and not changes in any combination of
assumptions. As a result of emerging experience, changes in current assumptions
and the related impact that could result in the listed financial statement
balances that are in excess of the amounts illustrated may occur in future
periods.

                                                                                                                  Increase (Decrease) in
                                                                                                                  Best Estimate Reserves
        Assumption                       Current Assumption                       Assumption Change                   (in millions) (1)
                                 Expected portfolio book yields over       Increase 25 basis points /
Investment return                the life of the business                  Decrease 25 basis points                 $(2,102) to $2,277
                                 Pricing expectations adjusted to          Increase / Decrease Expected
Expected future claim            best estimate based on Company            Future Claim Payments: +5% to
payments / base mortality        experience                                -5%                                      $4,994 to $(4,994)
                                 Pricing expectations adjusted to          

Increase / Decrease Expected

                                 best estimate based on Company            Total Termination Rates: +5% to
Total termination rates          experience                                -5%                                        $(434) to $600

(1) Best estimate reserves are equal to the present value of claims, cash
values, expenses, and commissions minus the present value of gross premiums,
using current best estimate assumptions.

In computing the estimate of unpaid policy claims, the Company considers many
factors, including the benefits and amounts available under the policy; the
volume and demographics of the policies exposed to claims; and internal business
practices, such as incurred date assignment and current claim administrative
practices. The Company monitors these conditions closely and makes adjustments
to the liability as actual experience emerges. Claim levels are generally stable
from period to period; however, fluctuations in claim levels may occur. In
calculating the unpaid policy claim liability, the Company does not calculate a
range of estimates. The following table shows the expected sensitivity of the
unpaid policy claims liability as of December 31, 2022, to changes in severity
and frequency of claims.



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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations

                 Sensitivity of Unpaid Policy Claims Liability

(In millions)                                                Total Severity
                      Decrease            Decrease                                 Increase            Increase
Total Frequency        by 2%               by 1%              Unchanged             by 1%               by 2%
Increase by 2%           $ (1)               $ 24                 $ 49                $ 74                $ 99
Increase by 1%            (25)                  0                   24                  49                  74
Unchanged                 (49)                (24)                   0                  24                  49
Decrease by 1%            (73)                (49)                 (24)                  0                  24
Decrease by 2%            (97)                (73)                 (49)                (25)                 (1)



Other policy liabilities, which accounted for 9% of total policy liabilities as
of December 31, 2022, consisted primarily of annuity and unearned premium
reserves, and discounted advance premiums on deposit from policyholders in
conjunction with their purchase of certain Aflac Japan insurance products. These
advanced premiums are deferred upon collection and recognized as earned premiums
over the contractual premium payment period. Advanced premiums represented 11%
and 15% of the December 31, 2022 and 2021 other policy liabilities balances,
respectively. See the Aflac Japan segment subsection of this MD&A for further
information.

Income Taxes

Income tax provisions are generally based on pretax earnings reported for
financial statement purposes, which differ from those amounts used in preparing
the Company's income tax returns. Deferred income taxes are recognized for
temporary differences between the financial reporting basis and income tax basis
of assets and liabilities, based on enacted tax laws and statutory tax rates
applicable to the periods in which the Company expects the temporary differences
to reverse. The evaluation of a tax position in accordance with U.S. GAAP is a
two-step process. Under the first step, the enterprise determines whether it is
more likely than not that a tax position will be sustained upon examination by
taxing authorities. The second step is measurement, whereby a tax position that
meets the more-likely-than-not recognition threshold is measured to determine
the amount of benefit to recognize in the financial statements. A valuation
allowance is established for deferred tax assets when it is more likely than not
that an amount will not be realized. The determination of a valuation allowance
for deferred tax assets requires management to make certain judgments and
assumptions.

In evaluating the ability to recover deferred tax assets, the Company's
management considers all available evidence, including taxable income in open
carry back years, the existence of cumulative losses in the most recent years,
forecasted earnings, future taxable income exclusive of reversing temporary
differences and carryforwards, future taxable temporary difference reversals,
and prudent and feasible tax planning strategies. In the event the Company
determines it is not more likely than not that it will be able to realize all or
part of its deferred tax assets in the future, a valuation allowance would be
charged to earnings in the period such determination is made. Likewise, if it is
later determined that it is more likely than not that those deferred tax assets
would be realized, the previously provided valuation allowance would be
reversed. Future economic conditions and market volatility, including increases
in interest rates or widening credit spreads, can adversely impact the Company's
tax planning strategies and in particular the Company's ability to utilize tax
benefits on previously recognized capital losses. The Company's judgments and
assumptions are subject to change given the inherent uncertainty in predicting
future performance and specific industry and investment market conditions.

Aflac Japan holds certain U.S. dollar-denominated assets in a DST. These assets
are mostly comprised of various U.S. dollar-denominated commercial mortgage
loans. The functional currency of the DST for U.S. tax purposes was historically
the Japanese yen. In 2022, the Company requested a change in tax accounting
method through the Internal Revenue Service's automatic consent procedures to
change its functional currency on the DST for U.S. tax purposes to the U.S.
dollar. As a result, foreign currency translation gains or losses on assets held
in the DST will no longer be recognized for U.S. tax purposes. The Company
historically recorded a deferred tax liability for foreign currency translation
gains on the DST assets, which was released in the third quarter of 2022 as a
result of the functional currency change and subsequently adjusted for foreign
currency impacts in the fourth quarter of 2022. This change in functional
currency resulted in the Company recognizing an income tax benefit of
$452 million ($0.71 per basic and diluted share, respectively) in 2022.

An increase or decrease in the Company's effective tax rate by one percentage
point would have resulted in an increase or decrease in the Company's 2022
income tax expense of $42 million.

For additional information on income tax, see Note 10 of the Notes to the
Consolidated Financial Statements presented in this report.

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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Future Adoption of Accounting Standard for Long-Duration Insurance Contracts

In August 2018, the FASB issued Accounting Standards Update (ASU) 2018-12,
"Financial Services - Insurance, Targeted Improvements to the Accounting for
Long-Duration Contracts" (LDTI). The update significantly changes how insurers
account for long-duration contracts and amends existing recognition,
measurement, presentation, and disclosure requirements applicable to the
Company. Issues addressed in the new guidance include: 1) a requirement to
review and, if there is a change, update cash flow assumptions for the liability
for future policy benefits (LFPB) at least annually, and to update the discount
rate assumption quarterly, 2) accounting for market risk benefits at fair value,
3) simplified amortization for deferred acquisition costs, and 4) enhanced
financial statement presentation and disclosures. The Company has no products
with market risk benefits.

Since the initial issuance, the FASB has deferred the ASU effective date for two
years, such that the amendments are now effective for the Company for fiscal
years, and interim periods within those fiscal years, beginning after December
15, 2022. The amended guidance is to be applied as of the beginning of the
earliest period presented, beginning on the January 1, 2021 transition date
(Transition Date).

The Company will conclude implementation efforts and adopt the amendments as of
January 1, 2023. The adoption will have a significant impact on the Company's
financial position, results of operations, and disclosures. The requirement to
update assumptions for the LFPB will have a significant impact on the Company's
results of operations, systems, processes and controls and the requirement to
update discount rates will have a significant impact on its AOCI and equity.

There are two permitted transition methods upon adoption and the Company has
selected the modified retrospective transition method. The new guidance requires
that discount rates used for the discounting of insurance liabilities be
initially adjusted on the adoption date and subsequently at each reporting
period to the market levels for the upper-medium-grade (low credit risk) fixed
income instrument yields (single-A in the currency of the underlying insurance
contract) reflecting the duration of the Company's insurance liabilities.

The primary impact on transition under the modified retrospective method is
driven by updating discount rates that increase reserves and lower AOCI by the
corresponding amount, net of tax. The Transition Date impact from adoption will
result in a decrease in AOCI of approximately $18.6 billion and a decrease in
retained earnings of approximately $-0.3 billion. The impact to AOCI results
from updating discount rate assumptions from the rates locked in for reserves
held as of the Transition Date to rates determined by reference to the
Transition Date market level yields for upper-medium-grade (low credit risk)
fixed income instruments (as of December 31, 2020). The decrease in AOCI as of
January 1, 2023 will be reduced to approximately $2.1 billion due to rising
interest rates and a weakening of the yen.

As discussed in detail in Note 1 of the Notes to the Consolidated Financial
Statements, the Company has designed its discount rate methodology for both the
U.S. and Japan insurance business. Under the provisions of the new ASU, discount
rates are updated each reporting period.

The impact to the Company's reported financial statements under U.S. GAAP is
greatly influenced by the nature of the Company's business model. Adoption of
the new guidance reflects the Company's concentration in Japan third-sector
business, in particular cancer insurance, with respect to which the duration of
liabilities is materially longer than asset durations, while Japan's aggregate
block of business continues to see favorable experience from mortality,
morbidity, and expenses. The long duration of the Company's third-sector
insurance liabilities in Japan coupled with limited-to-no-liquidity of the
Japanese long-dated fixed-income market creates challenges in application of the
market-based discount rate guidance and requires the Company to apply
significant judgments in the discount rate methodologies for its Japanese
third-sector liabilities. Under the modified retrospective method, the impact of
a low discount rate applied to long-duration third sector liabilities is
recognized at adoption, while associated favorable morbidity margins are
recognized over time thus driving a pronounced timing impact to U.S. GAAP
equity. In addition, with respect to the Japan segment, the Company maintains a
large portfolio of assets designated as held-to-maturity (HTM) as a strategy to
reduce capital (solvency margin ratio or SMR) volatility. In a low interest rate
environment, such as presently exists in Japan, assets designated as HTM that
were purchased in a higher interest rate environment have significant embedded
gains not reflected in AOCI (HTM securities are carried at amortized cost under
U.S. GAAP), which serves as an economic offset to a low discount rate applied to
policy liabilities. At December 31, 2022, the Company's HTM portfolio was $19.1
billion at amortized cost and had $2.2 billion in net unrealized gains. As of
December 31, 2020 (just prior to the January 1, 2021 Transition Date), the
Company's HTM portfolio was $24.5 billion at amortized cost and had $5.9 billion
in net unrealized gains. After adoption of ASU 2018-12, the Company also expects
net earnings and net earnings per share to reflect larger quarterly fluctuations
in periods that the future cash flow assumptions are updated, which are used to
calculate the liability for future policy benefits. See Note 1 of Notes to the
Consolidated Financial Statements for additional information on the


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  Item 7. Management's Discussion and Analysis of Financial Condition and
Results     of     Operations
impacts to the Company's consolidated statements of earnings for the years ended
December 31, 2022, and 2021, as restated under LDTI.

The following table presents the expected impacts from the adoption of ASU
2018-12 to the Company's previously reported operating ratios for the years
ended December 31.

                                                                As Reported                                                       As Adjusted
                                                    2022                             2021                             2022                             2021
Aflac Japan: (1)
Ratios to total premiums:
Benefits and claims, net                                68.8  %                       67.0  %                             67.4  %                       67.9  %
Ratios to total adjusted revenues:
Total adjusted expenses                                 21.5                          21.6                                20.3                          20.5
Aflac U.S.:
Ratios to total premiums:
Benefits and claims, net                                43.8  %                       43.6  %                             45.9  %                       47.0  %
Ratios to total adjusted revenues:
Total adjusted expenses                                 41.9                          39.5                                39.7                          38.4

(1) Includes the impact of the deferred profit liability reclassification
discussed in Note 1 of the Notes to the Consolidated Financial Statements.

For the year ended December 31, 2022, as restated under the new ASU, benefit
ratios are lower for Aflac Japan and higher for Aflac U.S., while expense ratios
are modestly lower due to amortizing deferred acquisition costs at a slower
rate. This results in a modestly higher pretax profit margin for Aflac Japan and
a slightly higher pretax profit margin for Aflac U.S.

For the year ended December 31, 2021, as restated under the new ASU, benefit
ratios are higher for Aflac Japan and Aflac U.S., while expense ratios are
modestly lower due to amortizing deferred acquisition costs at a slower rate.
This results in a slightly higher pretax profit margin for Aflac Japan and a
modestly lower pretax profit margin for Aflac U.S.

Prior to adoption of the ASU, pandemic-related low claim experience is
recognized in earnings in the reporting period when low claims are experienced,
whereas under the new ASU, this pandemic-related low claim experience is
recognized in line with experience-related remeasurement and potentially through
annual assumptions updates, i.e., partially during the reporting period with the
remainder recognized over the remaining expected life of each cohort.

The Company has created a robust governance framework to support implementation
of the updated standard. As part of its implementation, the Company has made
relevant policy elections, which are outlined in Note 1 of the Notes to the
Consolidated Financial Statements. The Company has also completed the
modernization of its actuarial technology platform to enhance its modeling, data
management, experience study and analytical capabilities, increase the
end-to-end automation of key reporting and analytical processes and optimize its
control framework. The Company has also put in place internal controls related
to the new processes created as part of implementing the updated standard.

The adoption of this new accounting guidance will not impact financial
statements for Aflac Japan under FSA requirements or for Aflac U.S. under
applicable statutory requirements. Therefore, adoption of the updated standard
does not impact the Company's overall cash flows, subsidiaries' dividend
capacity or their ability to meet applicable regulatory capital standards, nor
does it affect the Company's existing debt covenants or strategies for capital
deployment.

New Accounting Pronouncements

During the last three years, various accounting standard-setting bodies have
been active in soliciting comments and issuing statements, interpretations and
exposure drafts. For information on new accounting pronouncements and the
impact, if any, on the Company's financial position or results of operations,
see Note 1 of the Notes to the Consolidated Financial Statements.