In the first quarter adjusted earnings per diluted share increased 26.4%.
Looking at the operations in Japan in the first quarter, Aflac Japan generated solid overall financial results with a profit margin of 23.1%, which was above the outlook range that we provided at the Financial Analyst briefing.
Aflac Japan also reported strong premium persistency of 95%.
Turning to the US, we saw a strong profit margin of 27.3%, Aflac US also reported very strong premium persistency of 80%.
As expected, we saw modest sequential sales improvement in the quarter with an overall decrease of 22.1%.
Japan has experienced approximately 575,000 COVID cases and 10,000 confirmed deaths since inception of the virus.
Through the first quarter of 2021 and since the inception of the virus, Aflac Japan's COVID impact has totaled approximately 10,500 claimants with incurred claims of JPY1.9 billion.
Sales of medical insurance are up 34% over the first quarter of 2020 and up 8% over the 2019 quarter.
The new product called EVER Prime has enhanced benefits that on average result in 5% to 10% more premium per policy versus our old medical product.
We introduced this capability in October of 2020 and for the month of November, we processed 1,600 applications utilizing this digital experience.
In the month of March that number doubled to approximately 3,200 applications.
On March, 26, we launched a national advertising campaign promoting the capability and expect to see increased utilization.
It's important to remember that the Japan Post sales force has been inactive for 18 months.
Turning to the US, there is approximately 32 million COVID-19 cases and 575,000 deaths as reported by the CDC.
As of the end of the first quarter, COVID claimants since inception of the virus has totaled approximately 38,000, with incurred claims of $130 million.
It's important to note that roughly 390,000 of our 420,000 US business clients have less than 100 employees, critical areas of investment include recruiting, training, technology advancement and product development, key indicators of recovery include agent and broker recruiting, a built in average weekly producers and traction in the rollout of our dental and vision products.
For the first quarter, we are running at approximately 70% of the average with the producers during the same period in pre-pandemic 2019.
Our dental product is approved in 43 states, and vision in 41 states with more states coming online throughout the year.
We have started to see our quoted pipeline build in the last 45 days.
We offer critical illness, accident and cancer and are approved in approximately 30 states with more states and product coming online throughout the year.
With a modest amount of committed marketing dollars, we are attracting about 500,000 visitors per month to aflac.com, which has resulted in 120,000 leads for call center conversion this year.
We are currently experiencing a 15% conversion rate once in the call center.
In terms of the contribution of these businesses to overall sales in 2021, we expect these three growth initiatives will make up roughly 10% of sales in 2021 after having contributed less than 5% to 2020 sales.
We expect these initiatives to drive incremental revenue in excess of $1 billion over the next five to seven years.
As Dan noted, we issued our inaugural sustainability bond, raising $400 million to be invested toward our path to net zero emissions by 2050 and investments that support climate, as well as diversity and inclusion efforts.
As part of that alliance, we have made an initial $1.5 billion general account allocation to the newly created Sound Point Commercial Real Estate Finance, LLC, with $500 million of that amount dedicated to providing transitional and other debt financing to support economically distressed communities, designated as qualified opportunity zones.
Aflac will hold a 9.9% minority interest in this newly created investment LLC, with the ability to grow our stake over time in line with future growth of the new venture.
For the first quarter, adjusted earnings per share increased 26.4% to $1.53, with a $0.02 positive impact from FX in the quarter.
Variable investment income went $24.5 million above our long-term return expectations.
Adjusted book value per share, including foreign currency translation gains and losses, grew 20.6%, and the adjusted ROE, excluding the foreign currency impact, was a strong 16.7%, a significant spread to our cost of capital.
Total earned premium for the quarter declined 3.6%, reflecting first sector policies paid up impact, while the earned premium for our third sector product was down 2.2%, as sales were under pressure in 2020.
Japan's total benefit ratio came in at 68.4% for the quarter, down 100 basis points year-over-year, and the third sector benefit ratio was down -- was 58%, also down 100 basis points year-over-year.
Persistency remains strong, with a rate of 95%, up 50 basis points year-over-year.
Our expense ratio in Japan was 21.3%, up 130 basis points year-over-year.
Adjusted net investment income increased 6.9% in yen terms, primarily driven by favorable returns on our growing private equity portfolio and lower hedge costs, partially offset by lower reinvestment yield on our fixed and floating rate portfolio.
The pre-tax margin for Japan in the quarter was 23.1%, up 60 basis points year-over-year, a very good start to the year.
Turning to the US, net earned premium was down 4.1% due to weaker sales results.
Persistency improved 240 basis points to 80%, as our efforts to retain accounts and reduce lapsation show early positive results.
Breaking down the 240 basis points persistency rate improvement further, 70 basis points can be explained by the emergency orders in place, 90 basis points by lower sales as first year lapse rates are roughly twice total in-force lapse rates.
And the residual of 80 basis points includes conservation efforts executed on last year.
At 39.1%, a full 900 basis points lower than Q1 2020.
We estimated new COVID claims at approximately $42 million, and this was offset by an IBNR release of $41 million.
For the full year, we now expect our benefit ratio to be toward the lower end or slightly below our guided range of 48% to 51%.
Our expense ratio in the US was 38.5%, up 10 basis points year-over-year, but with a lot of moving parts.
Higher advertising spend increased the expense ratio by 70 basis points along with our continued build-out of growth initiatives, group life and disability, network and innovation and direct-to-consumer.
These contributed to a 110 basis point increase to the ratio.
In the quarter, we also incurred $6 million of integration expenses not included in adjusted earnings associated with recent acquisitions.
Adjusted net investment income in the US was down 0.6% due to a 22 basis points contraction in the portfolio yield year-over-year, partially offset by favorable variable investment income.
Profitability in the US segment was very strong, with a pre-tax margin of 27.3%, with a low benefit ratio as the core driver.
Initial expectations were for us to be toward the low end of 16% to 19%.
In our Corporate segment, we recorded a pre-tax loss of $26 million as adjusted net investment income was $20 million lower than last year, due to lower interest rates at the short end of the yield curve.
Other adjusted expenses were $7 million lower as our cost reduction activities are coming through.
Our capital position remains strong, and we ended the quarter with an SMR north of 900% in Japan and an RBC of approximately 563% in Aflac Columbus.
Unencumbered holding company liquidity stood at $3.9 billion, $1.5 billion above our minimum balance, excluding the $400 million proceeds from the sustainability bond that we issued in March that reinforced our ESG initiatives and believe that sustainable investments are also good long-term investments.
Leverage, which includes the sustainability bond, increased but remains at a comfortable 23% in the middle of our leverage corridor of 20% to 25%.
In the quarter, we repurchased $650 million of our own stock and paid dividends of $227 million, offering good relative IRR on these capital deployments.

Summary:
For the first quarter, adjusted earnings per share increased 26.4% to $1.53, with a $0.02 positive impact from FX in the quarter.