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AFLAC U.S. SEGMENT
Aflac U.S. Pretax Operating Earnings
Changes in Aflac U.S. pretax operating 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)
2016
2015
2014
Net premium income
$ 5,454
$ 5,347
$ 5,211
Net investment income
703
678
645
Other income
10
8
3
Total operating revenues
6,167
6,033
5,859
Benefits and claims
2,869
2,873
2,853
Operating expenses:
Amortization of deferred policy acquisition costs
497
488
459
Insurance commissions
580
585
590
Insurance and other expenses
1,013
986
884
Total operating expenses
2,090
2,059
1,933
Total benefits and expenses
4,959
4,932
4,786
Pretax operating earnings
(1)
$ 1,208
$ 1,101
$ 1,073
Percentage change over previous period:
Net premium income
2.0%
2.6%
1.1%
Net investment income
3.8
5.0
2.1
Total operating revenues
2.2
3.0
1.2
Pretax operating earnings
(1)
9.7
2.7
3.3
(1)
See the Insurance Operations section of this MD&A for our definition of segment operating earnings.
Annualized premiums in force increased 2.4% in 2016, 1.6% in 2015 and 1.8% in 2014. Annualized premiums in force
at December 31 were $5.9 billion in 2016, compared with $5.8 billion in 2015 and $5.7 billion in 2014.
The following table presents a summary of operating ratios for Aflac U.S. for the years ended December 31.
Ratios to total revenues:
2016
2015
2014
Benefits and claims
46.5%
47.6%
48.7%
Operating expenses:
Amortization of deferred policy acquisition costs
8.1
8.1
7.8
Insurance commissions
9.4
9.7
10.1
Insurance and other expenses
16.4
16.3
15.1
Total operating expenses
33.9
34.1
33.0
Pretax operating earnings
(1)
19.6
18.3
18.3
(1)
See the Insurance Operations section of this MD&A for our definition of segment operating earnings.
The benefit ratio decreased in 2016, compared with 2015, due to a mix of business changes and continued favorable
claims experience. The operating expense ratio remained relatively stable in 2016, compared with 2015. In total, the
pretax operating profit margin improved in 2016, compared with 2015, due to lower benefit ratios. In 2017, we expect the
benefit and expense ratios to remain relatively stable.
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