Aflac 2006 Annual Report Download - page 19

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• Investments and cash increased 5.9% to $43.8
billion at the end of 2006. In yen, investments
and cash were up 6.8%.
• Net investment income increased 3.2% to $1.7
billion. In yen, net investment income rose 9.0%.
• The average yield on new investments was
3.33% in 2006, compared with 3.19% in
2005.
Aflac Japan’s overall credit quality remained
high. At the end of 2006, 80.7% of our
holdings were rated A or better on an
amortized cost basis. Only 2.7% of our debt
securities were rated below investment
grade at the end of 2006. We believe that
our conservative investment approach serves
our customers and shareholders very well.
Laying the Groundwork
for Future Growth
As we formulate our plans for the future, we
believe the competitive strengths that have
resulted in our market leadership will
continue to serve us well. And while the
demand for our medical products was weak
in 2006, we are still convinced of the basic
need for our products. We believe this need
will continue as consumers face the prospect
of higher out-of-pocket expenses for
medical care. To help us further penetrate
the Japanese market, we will:
• Enhance our product line – We will research
and develop innovative policies and update
existing products to adapt to the evolving needs
of Japanese consumers with benefits that help
them cope with the increasing burden of out-of-
pocket health care costs.
• Promote our brand position – We will
emphasize our market leading status to attract
consumers and distinguish our products in a
more competitive market.
• Enhance our distribution system – We will
recruit more sales agencies to reach additional
consumers, while also providing them with
better sales tools through new training
programs.
• Improve operational efficiency – We will invest
in new technologies and streamline our business
processes to increase our core competitive
advantage and provide convenience for
policyholders and consumers.
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