Item 1A. Risk Factors

Major public health issues, including COVID-19 and any resulting economic effects could have an adverse impact on the Company's financial condition and results of operations and other aspects of its business.

The Company continues to closely monitor developments related to COVID-19 to assess its impact on the Company's business. Due to the evolving nature of this event, including fluctuations in infection, hospitalization and death rates in the United States, Japan and other regions of the world, COVID-19 could continue to impact the Company's business, financial condition, results of operations, capital position, liquidity or prospects in a number of ways. The pandemic may cause changes to estimates of future earnings, capital deployment and other guidance the Company has provided to the markets in the "2022 Outlook" section of Item 7. MD&A in the 2021 Annual Report.

The continuing effects of the pandemic and the effort by governmental entities, public health authorities and private entities to contain the impact of COVID-19 in the U.S. and Japan, among other factors, result in continuing uncertainty about the severity and duration of the pandemic’s effects on the U.S., Japan and global economies and on the Company's business. The extent to which the pandemic will continue to impact the Company's business, results of operations or financial condition, as well as those of its customers, agents, brokers and other distribution partners, vendors and counterparties, will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19, including its variants, and the actions taken to contain or treat its and their impact.

As a result of the COVID-19 pandemic and its effects on the U.S. economy, Aflac U.S. has experienced lower sales and may experience elevated lapse rates due to factors including the proportionately higher concentration of Aflac U.S. policies in force being associated with small businesses that may be disproportionately negatively impacted by the economic uncertainty surrounding COVID-19. Such results may also occur due to economic and other factors affecting larger businesses and individuals. For example, lapse rates experienced by Aflac U.S. during the quarter ended March 31, 2022 were higher than recent historical norms within the large business customer base.

Policies issued by Aflac Japan and Aflac U.S. are primarily sold and enrolled in person through face-to-face interaction. Likewise, recruiting of new agents and brokers largely occurs through in-person contact. The ability of individual agents and agencies, strategic alliance partners, brokers and other distribution partners to make sales in Japan and the U.S. and the ability to conduct agent and broker recruiting has been significantly reduced by efforts to mitigate the effects of the pandemic, including social distancing orders, requirements or guidelines issued by government or public health authorities, and adoption of social distancing techniques and remote working by employees, which may hinder sales of the Company’s products in Japan and the U.S. The Company cannot predict with certainty the continuing impact of these events on its distribution channels and financial results, but the impact to date has been more acute for Aflac U.S. due to the higher number of confirmed COVID-19 cases and deaths in the U.S. to date compared with Japan, both in absolute terms and in proportion to national populations, as well as the historically lower rate of persistency in the Aflac U.S. business. The Company also considers that most Aflac U.S. business customers, and most of the independent agents in its agency channel, are small businesses who may lack the financial resources to weather an economic downturn and may be disproportionately negatively impacted by the economic uncertainty surrounding COVID-19. These factors may continue to negatively impact sales throughout 2022. See the risk factors entitled “Sales 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” and “Difficult conditions in global capital markets and the economy, including those caused by COVID-19, could have a material adverse effect on the

Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business” in Item 1A. Risk Factors in the 2021 Annual Report for more information.

Further, the Company's operations, as well as those of its vendors, service providers and counterparties, may also be adversely affected by the COVID-19 pandemic or the mitigation efforts outlined above. In both the U.S. and Japan, the Company has over 50% of its employees working remotely. The Company has begun to implement return to work plans for Aflac Japan and Aflac U.S. that are adaptable and based upon multiple factors including government orders, guidelines issued by public health authorities, the location and job responsibilities of specific Company personnel, rates of COVID-19 vaccinations, cases and deaths in various localities and other factors. The Company may nevertheless experience operational disruptions when employees return to work.

The assumptions and estimates that the Company uses in establishing premiums and reserves depend on the Company's judgment regarding the likelihood of future events and are inherently uncertain, including without limitation in regard to the effects of COVID-19. See the risk factor entitled “If future policy benefits, claims or expenses exceed those anticipated in establishing premiums and reserves, the Company's financial results would be adversely affected” in Item 1A. Risk Factors and the "Executive Summary" section of Item 7. MD&A in the 2021 Annual Report for more information.

For more information on the effects of the COVID-19 pandemic on markets and investments, see the risk factor entitled, “Difficult conditions in global capital markets and the economy, including those caused by the COVID-19, could have a material adverse effect on the Company's investments, capital position, revenue, profitability, and liquidity and harm the Company's business” in Item 1A. Risk Factors in the 2021 Annual Report.

**Item 2.**Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

During the first three months of 2022, the Company repurchased shares of its common stock as follows:

(1) During the first three months of 2022, 343,272 shares were purchased in connection with income tax withholding obligations related to the vesting of restricted-share-based awards during the period.