Aflac Incorporated (AFL) Stock Analysis

Aflac’s primary competitive advantage is its dominant position in U.S. worksite supplemental health insurance, where it holds a 29% market share—nearly triple that of its nearest competitor. This leadership is underpinned by strong brand recognition (over 90% in Japan), a broad product portfolio, and a distribution network that reaches 70% of the U.S. workplace insurance market. Aflac’s supplemental products, such as cancer, accident, and critical illness insurance, are differentiated by their focus on rapid claims payment and customer service, supporting persistency rates above 79% in the U.S. and 93% in Japan.

The company’s dual-market presence in the U.S. and Japan provides geographic diversification and scale. In Japan, Aflac is the leading provider of cancer and medical insurance, with over 22 million policies in force. Its long-standing relationships with corporate and independent agencies, as well as digital and direct channels, create high barriers to entry for new competitors.

Compared to rivals such as Colonial Life (Unum), Allstate, and MetLife, Aflac’s brand, distribution, and persistency metrics are superior. However, the company faces increasing competition from major medical carriers bundling supplemental products, and is exposed to foreign currency risk due to its large Japanese business. Nonetheless, Aflac’s financial strength, recognized by top ratings from AM Best and S&P, and its disciplined cost management, reinforce its durable competitive position.