For the third quarter, adjusted earnings per diluted share, excluding foreign currency impact increased 10.1% for the quarter and 20.1% for the year.
Looking at the operations in Japan in the third quarter, Aflac Japan generated solid overall financial results as reflected in the profit margin of 26.3%, which was above the outlook range provided at our financial analyst briefing for 2020.
As Max will explain in a few moments, Aflac Japan has reported very strong premium persistency of 94.5%.
Sales for the first nine months of this year were approximately 66% of 2019 level.
We saw a strong profit margin of 22.2%.
Aflac U.S. also continued to have strong premium persistency of nearly 80%.
Sales increased 35% for the quarter and are at approximately 78% of sales for the first nine months of 2019.
Within the challenging small business and labor markets, we continue to make investments in developments of traditional independent sales agents that make up about 53% of our sales as of the third quarter of 2021.
Excluding our acquired platforms, group sales have generated a year-to-date sales increase of 14% over the same period for 2019.
The precise impact is difficult to calculate, but the practical implications include reduced face-to-face consultations, limited access to on-site workers and payroll solicitation, reduced foot traffic to the roughly 400 owned and affiliated retail shops that we sell through and restricted travel between prefectures, which further constrains sales professionals.
When looking at claims experience through the third quarter and since inception of the virus, Aflac Japan's COVID impact has totaled approximately 31,000 claimants with incurred claims of JPY5.6 billion.
Our medical product EVER Prime continues to do well with medical sales up roughly 14% in the quarter and 36% year-to-date over the same period in 2020.
Our market share has improved, but we're still at roughly 85% of the medical sales enjoyed in 2019, which was also a medical product refresh year.
Since our late September launch, we have sold nearly 10,000 policies.
As of the end of the third quarter, Aflac U.S. COVID claimants since inception of the virus, has totaled approximately 79,000 with incurred claims of $135 million.
This quarter, we processed over 1,600 cases, up 30% over the second quarter, as we roll out training and development to agents and launch in additional states.
We are focused on small- and medium-sized businesses with sold cases averaging around 95 employees.
Our premier life and disability team successfully renewed 100% of their current accounts, a testimony to their high-quality service model.
With respect to our e-commerce initiative, Aflac Direct, we currently offer products in 46 states.
We are actively building out a licensed call center and currently have 14 licensed agents.
In the third quarter, these three platforms accounted for roughly 13% of sales and are expected to build as a percentage of sales and earned premium in the coming years.
Year-to-date, we have processed over 38,000 online applications with September being our largest month since launching the capability.
For the third quarter, adjusted earnings per share increased 10.1% to $1.53, with a $0.02 negative impact from foreign exchange in the quarter.
Variable investment income ran $0.11 above our long-term return expectations.
Adjusted book value per share, including foreign currency translation gains and losses, grew 10.1%.
And the adjusted ROE, excluding the foreign currency impact, was a strong 16.2%, a significant spread to our cost of capital.
Total earned premium for the quarter declined 4%, reflecting first sector policies paid-up impacts, while earned premium for our third sector products was down 2.6% due to recent low sales volumes.
Policy count in-force, which we view as a better measure of our overall business growth declined 1.8%.
Japan's total benefit ratio came in at 66.1% for the quarter, down 520 basis points year-over-year, and the third sector benefit ratio was 55%, down 670 basis points year-over-year.
Adjusting for greater than normal IBNR releases and in-period experience, we estimate that our normalized benefit ratio for the third quarter to be 68.7%.
Persistency remained strong with a rate of 94.5%, down 50 basis points year-over-year.
Our expense ratio in Japan was 21.4%, down 30 basis points year-over-year.
Adjusted net investment income increased 19.7% 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 rate portfolio.
The pre-tax margin for Japan in the quarter was 26.3%, up 690 basis points year-over-year, a very good result for the quarter.
This quarter's strong financial results lead us to expect the full year benefit ratio for Japan to be below the 3-year guidance range of 68.5% to 71% given at FAB.
And the pre-tax margin to be above the 20.5% to 22.5% range given at -- for the full year 2021.
Net earned premium was down 1%, as lower sales results during the pandemic continue to have an impact on our earned premium.
Persistency improved 110 basis points to 79.9%, 70 basis points of which are from lower sales, as first year lapse rates are roughly twice the level of in-force lapse rates.
In addition, there still remains about 40 basis points of positive impact from emergency orders.
Our total benefit ratio in the U.S. came in lower than expected at 45.1% or 320 basis points lower than Q3 2020, which itself was heavily impacted by the initial pandemic.
This quarter, they amounted to a 3.5 percentage points impact on the benefit ratio, which leads to an underlying benefit ratio, excluding IBNR releases of 48.6%.
For the full year, we now expect our benefit ratio to be in the range of 43% to 46% versus original guidance of 48% to 51%.
Our expense ratio in the U.S. was 38.9%, up 170 basis points year-over-year, but with a lot of moving parts.
Higher advertising spend increased the expense ratio by 40 basis points.
Our continued build-out of growth initiatives, group life and disability, network dental and vision and direct-to-consumer contributed to a 260 basis points increase to the ratio when isolating these investments.
In the quarter, we also incurred $7.8 million of integration expenses, not included in adjusted earnings associated with recent acquisitions.
Adjusted net investment income in the U.S. was up 9.1%, mainly driven by favorable variable investment income in the quarter.
Profitability in the U.S. segment remained strong with a pre-tax margin of 22.2%, 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 $41 million, as adjusted net investment income was down $12 million versus last year due to low interest rates at the short end of the yield curve and change in value of certain tax credit investments.
The net impact to our bottom line was a positive $5 million in the quarter.
Our capital position remains strong, and we ended the quarter with an SMR in Japan of north of 900% and an RBC north of 600% in Aflac Columbus.
Unencumbered holding company liquidity stood at $4.2 billion, $1.8 billion above our minimum balance.
Leverage, which includes the sustainability bond issued earlier this year, remains at a comfortable 22.6% in the middle of our leverage corridor of 20% to 25%.
In the quarter, we repurchased $525 million of our own stock and paid dividends of $220 million, offering good relative IRR on these capital deployments.

Summary:
For the third quarter, adjusted earnings per share increased 10.1% to $1.53, with a $0.02 negative impact from foreign exchange in the quarter.