Aflac (AFL) risk factors, FY2024 10-K

Other

1. 01The Company's concentration of business in Japan poses risks to its operations and financial condition
2. 02The Company aims to match both the duration and currency of its assets with its liabilities. This is very difficult for Aflac Japan and Aflac Re due to the lack of available long-dated yen-denominated fixed income instruments beyond JGBs
3. 03The Company is exposed to foreign currency fluctuations in the yen/dollar exchange rate
4. 04For regulatory accounting purposes, there are certain requirements for realizing impairments that could be triggered by changes in the rate of exchange between the yen and U.S. dollar and could negatively impact Aflac Japan's earnings and the corresponding dividends and capital deployment
5. 05The valuation of the Company's investments and derivatives includes methodologies, estimations and assumptions that are subject to differing interpretations and could result in changes to investment valuations that may adversely affect the Company's results of operations or financial condition
6. 06The determination of the amount of expected credit losses recorded on the Company's investments is based on significant valuation judgments and could materially impact its results of operations or financial position
7. 07Any decrease in the Company's financial strength or debt ratings may have an adverse effect on its competitive position and access to liquidity and capital
8. 08A decline in the creditworthiness of other financial institutions could adversely affect the Company
9. 09Sales of the Company's products and 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
10. 10If future policy benefits, claims or expenses exceed those anticipated in establishing premiums and reserves, the Company's financial results would be adversely affected
11. 11The success of the Company's business depends in part on effective information technology systems, on continuing to develop and implement improvements in technology, and on successful execution of revenue growth and expense management initiatives
12. 12Interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality, integrity or privacy of sensitive data residing on such systems, could harm the Company's business
13. 13As a holding company, the Parent Company depends on the ability of its subsidiaries to transfer funds to it to meet its debt service and other obligations and to pay dividends on its common stock
14. 14The Company's risk management policies and procedures may prove to be ineffective and leave the Company exposed to unidentified or unanticipated risk, which could adversely affect the Company's businesses or result in losses
15. 15complexity of models the Company utilizes expands, increasing the Company's exposure to error in the design, implementation or use of models, including the associated input data and assumptions
16. 16The use of third-party vendors to support the Company's operations makes the Company susceptible to the operational risk of those third parties, which could lower revenues, increase costs, reduce profits, disrupt business, or damage the Company’s reputation
17. 17Tax rates applicable to the Company may change
18. 18Extensive regulation and changes in legislation can impact profitability and growth
19. 19Competition could adversely affect the Company's ability to increase or maintain its market share or profitability
20. 20Catastrophic events, including those as a result of climate change or major public health issues, could adversely affect the Company's financial condition and results of operations as well as the availability of the Company’s infrastructure and systems
21. 21Events, including those external to the Company's operations, could damage the Company's reputation
22. 22The Company depends heavily on key management personnel, and the loss of services of one or more of its key executives could harm the Company's business
23. 23Changes in accounting standards issued by the Financial Accounting Standards Board (FASB) or other standard-setting bodies may adversely affect the Company's financial statements
24. 24The Company faces risks related to litigation, regulatory investigations and inquiry and other matters
25. 25Allegations or determinations of agent misclassification could adversely affect the Company’s results of operations, financial condition and liquidity