Aflac 2006 Annual Report Download - page 2

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Being a hero means more than taking to the skies in a mask and
cape. It’s about finding ways to use all your powers to help those
who need assistance. For more than 50 years, Aflac products have
done just that by helping policyholders avoid financial peril when a
life-interrupting medical event causes copayments, deductibles, and
unpaid bills to pile up faster than a speeding bullet. As a symbol of
the help Aflac provides, the Aflac Duck appears on television
nationally as a superhero.
But the Aflac Duck is not our only hero. Aflac has tens of thousands
of sales associates and employees who are ready to do everything
within their power to provide peace of mind and reduce financial
burdens for policyholders during times of medical distress. We do
this by providing cash benefits so that our policyholders can focus
on what’s most important – their recovery – without the added
stress of worrying about finances. This gives our policyholders a
chance to resume life where they left off.
Aflac’s insurance products provide protection to more than 40
million people worldwide. We’ve earned the distinction of being the
number one provider of guaranteed-renewable insurance in the
United States and the number one insurance company in terms of
individual policies in force in Japan. Aflac is rated AA by Standard &
Poor’s, Aa2 (Excellent) by Moody’s, and AA by Fitch Ratings for
financial strength. A.M. Best rates Aflac as A+ (Superior).
Aflac has been included in Fortune magazine’s listing of America’s
Most Admired Companies for six consecutive years. In January 2007,
Aflac was included in Fortune magazine’s list of the 100 Best
Companies to Work For in America for the ninth consecutive year.
Aflac Incorporated is a Fortune 500 company listed on the New York
Stock Exchange under the symbol AFL.
Aflac to the Rescue!
Table of Contents
Message from Management 2
Strong financial results, market leadership, and a timeless focus on
customer needs propelled Aflac into its next 50 years of helping
consumers.
A Conversation with Dan Amos 6
Chairman and CEO Dan Amos gives his thoughts on Aflac’s
competitive strengths, brand philosophy, philanthropic endeavors,
opportunities and challenges.
Aflac Japan 8
Aflac Japan strengthened its product line, enhanced its distribution
system and further differentiated its brand, all while successfully
maintaining its position as the largest life insurer in terms of
individual policies in force.
Aflac U.S. 16
Aflac U.S. refined its product line, enhanced the capabilities and
size of its sales force and leveraged technology to enable its sales
force to concentrate on selling.
Selected Financial Data 22
This section includes summary statements of earnings and balance
sheets, stock price ranges, and exchange rates for the past 11 years.
Management’s Discussion and Analysis 24
This section provides an analysis of Aflac’s overall financial
condition and reviews the company’s financial and operational
performance in Japan and in the United States.
Consolidated Financial Statements 45
This section contains the consolidated financial statements of Aflac
Incorporated and its subsidiaries.
Notes to the Consolidated Financial Statements 49
This section provides additional information about the company’s
consolidated financial statements and accounting policies.
Investor Information 74
While Aflac’s stock performance did not keep pace with the
market in 2006, total return to shareholders has compounded at
16.7% annually over the last 10 years.
Glossary 75
Definitions of terms used by Aflac and the insurance industry
Board of Directors and Management 76
Biographical information on the company’s leaders