AFL · 10-Q · 2026Q3 · Full report

Commercial Real Estate Credit Risk

AFLAC INC · 2026-11-05 · Importance 32 · Surprise 24

Aflac’s transitional real estate loans and commercial mortgage loans are collateralized by commercial real estate, including office properties, and some loans were in default on interest or maturity payments. The company said commercial real estate market conditions have had a greater impact on office-secured mortgages and that it works with affected borrowers through loan continuances, potential modifications, loan sales, foreclosure, or deed in lieu of foreclosure. Aflac completed no foreclosures or deed-in-lieu transactions in the first nine months of 2026. In the first nine months of 2025, it foreclosed on transitional real estate loans with $257 million amortized cost and recognized a $10 million net loss when the loan cost exceeded estimated collateral fair value.

Key facts

• Aflac Japan and Aflac U.S. had $2.250 billion and $2.819 billion, respectively, in transitional real estate loans at September 30, 2026. source
• Aflac Japan and Aflac U.S. had $1.272 billion and $3.807 billion, respectively, in commercial mortgage loans and middle market loans at September 30, 2026. source
• In the nine months ended September 30, 2025, Aflac foreclosed on or accepted deeds in lieu of foreclosure for transitional real estate loans with $257 million amortized cost and recognized a $10 million net loss. source
• Aflac invested in certain transitional real estate and commercial mortgage loans that are currently in default of interest or maturity payments. source
• Aflac completed no foreclosure or deed-in-lieu-of-foreclosure transactions in the nine months ended September 30, 2026. source
• Aflac's transitional real estate loans and commercial mortgage loans are collateralized by commercial real estate, including some office properties. source
• Aflac's transitional real estate and commercial mortgage investments have been affected by commercial real estate market conditions, with greater impact on mortgages secured by office properties. source