KBW Sees Mixed Fundamentals in Life Insurance, Starts Aflac (AFL) at Market Perform

Aflac Incorporated (NYSE:AFL) is included among the Dividend Stock Portfolio for Income: 15 Stocks to Invest In.

On March 26, Keefe Bruyette & Woods re-initiated coverage of Aflac Incorporated (NYSE:AFL) with a Market Perform rating and a $113 price target. The analyst said the life insurance sector shows a mixed fundamental picture. Companies have reduced liability tail risk and improved free cash flow conversion, while also benefiting from stronger growth. At the same time, the note pointed to rising competition, higher investment leverage, increasing balance sheet complexity, and macro tailwinds that may not last.

During the Q4 2025 earnings call, Senior EVP and CFO Max Broden said most of the company’s previously issued 2026 guidance remained in place, with only a few adjustments. For Aflac Japan, he said, underlying earned premiums are now expected to decline by about 1% to 2% in 2026. The expense ratio is projected in the 20% to 23% range. He also noted that the benefit ratio in Japan is expected to fall between 60% and 63%, with a pretax profit margin of 33% to 36%.

Looking at the US segment, Broden said the company still expects net earned premium growth at the lower end of the 3% to 6% range. He added that the benefit ratio for 2026 is projected between 48% and 52%, while the expense ratio is expected to come in between 36% and 39% as the company continues to expand its newer business lines.

Aflac Incorporated (NYSE:AFL) provides financial protection through its subsidiaries in the United States and Japan. Its core business centers on supplemental health and life insurance products.

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