S&P downgrades Aflac

Standard & Poor’s said it lowered the long-term counterparty credit and financial strength ratings on Aflac Inc.’s core operating companies, American Family Life Assurance Co. of Columbus, American Family Life Assurance Co. – Japan Branch and American Family Life Assurance Co. of NY, to A+ from AA-.

The agency also said it lowered the counterparty credit rating on the holding company, Aflac Inc., to A- from A.

S&P also said it lowered the rating on the company’s senior debt to A- from A and on its junior subordinated debt to BBB from BBB+.

The outlook is stable.

The downgrade follows the lowering of the long-term sovereign credit rating on Japan, S&P said.

The likelihood of an economic recovery in Japan that is strong enough to restore economic support for sovereign creditworthiness commensurate with a previous assessment has diminished, the agency said.

During 2011 to 2014, average per-capita income in Japan slipped to $36,000 from close to $47,000, S&P said.

Apart from a sharp depreciation in the exchange rate between the yen and the U.S. dollar, this also reflected weak average economic growth during the period and persistently weak price trends, the agency said.

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