Aflac Incorporated (NYSE: AFL) today reported its second quarter results.

Total revenues were $5.6 billion in the second quarter of 2021, compared with $5.4 billion in the second quarter of 2020. Net earnings were $1.1 billion, or $1.62 per diluted share, compared with $805 million, or $1.12 per diluted share a year ago, driven by higher net investment gains.

Net earnings in the second quarter of 2021 included pretax adjusted net investment gains* of $85 million, or $0.12 per diluted share, compared with pretax adjusted net investment losses of $166 million, or $0.23 per diluted share a year ago, which are excluded from adjusted earnings*. The adjusted net investment gains were driven by an increase in the fair value of equity securities of $170 million, a decrease in the allowance associated with the company's estimate of current expected credit losses (CECL) of $12 million, net gains from sales and redemptions of $6 million, all of which were partially offset by net losses from certain derivatives and foreign currency activities of $103 million.

The average yen/dollar exchange rate* in the second quarter of 2021 was 109.48, or 1.7% weaker than the average rate of 107.65 in the second quarter of 2020. For the first six months, the average exchange rate was 107.79, or 0.4% stronger than the rate of 108.25 a year ago.

Total investments and cash at the end of June 2021 were $146.7 billion, compared with $142.2 billion at June 30, 2020. In the second quarter, Aflac Incorporated repurchased $500 million, or 9.2 million of its common shares. At the end of June 2021, the company had 76.5 million remaining shares authorized for repurchase.

Shareholders' equity was $33.7 billion, or $50.20 per share, at June 30, 2021, compared with $29.4 billion, or $41.21 per share, at June 30, 2020. Shareholders' equity at the end of the second quarter included a net unrealized gain on investment securities and derivatives of $10.0 billion, compared with a net unrealized gain of $8.5 billion at June 30, 2020. Shareholders' equity at the end of the second quarter also included an unrealized foreign currency translation loss of $1.7 billion, compared with an unrealized foreign currency translation loss of $1.5 billion at June 30, 2020. The annualized return on average shareholders' equity in the second quarter was 13.4%.

Adjusted earnings in the second quarter were $1.1 billion, compared with $921 million in the second quarter of 2020, reflecting an increase of 17.3% driven by lower-than-expected benefit ratios and higher net investment income, primarily in Japan, and a favorable effective tax rate. Adjusted earnings included pretax variable investment income of $137 million on alternative investments, which was $112 million above long-term return expectations. Adjusted earnings per diluted share* increased 24.2% to $1.59 in the quarter. The weaker yen/dollar exchange rate impacted adjusted earnings per diluted share by $0.01.

For the first six months of 2021, total revenues were up 8.2% to $11.4 billion, compared with $10.6 billion in the first half of 2020. Net earnings were $2.4 billion, or $3.49 per diluted share, compared with $1.4 billion, or $1.89 per diluted share, for the first six months of 2020. Adjusted earnings for the first half of 2021 were $2.1 billion, or $3.11 per diluted share, compared with $1.8 billion, or $2.49 per diluted share, in 2020. Adjusted earnings included $171 million of pretax variable investment income on alternative investments, which was $137 million above long-term return expectations. Excluding the positive impact of $0.01 per share from the stronger yen/dollar exchange rate, adjusted earnings per diluted share increased 24.5% to $3.10 for the first six months of 2021.

Shareholders' equity excluding AOCI (or adjusted book value*) was $25.7 billion, or $38.27 per share at June 30, 2021, compared with $22.7 billion, or $31.75 per share, at June 30, 2020. The annualized adjusted return on equity excluding foreign currency impact* in the second quarter was 17.0%.