Aflac 2006 Annual Report Download - page 79

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Peer Company
Comparison
Aflac’s total return to
shareholders compounded
at 16.7% annually over
the last 10 years.
Glossary
Affiliated Corporate Agency – An
agency that is directly affiliated with a
specific corporation. A corporation
establishes the agency to sell our
insurance policies to its employees on
payroll deduction. In turn, we pay the
agency a commission.
Benefit Ratio – Incurred claims plus the
increase in reserves for future policy
benefits, as a percentage of total revenues.
Deferred Policy Acquisition
Costs (DAC) – The costs of acquiring
new business, principally agents’ current-
year commissions in excess of ultimate
renewal-year commissions, and certain
policy issue, underwriting and marketing
expenses, have been capitalized and
deferred. These deferred policy
acquisition costs are amortized over the
premium paying period in proportion to
anticipated premium income of the
related policies.
Earnings Per Basic Share – Net earnings
divided by the weighted-average number
of shares outstanding for the period.
Earnings Per Diluted Share – Net
earnings divided by the weighted-average
number of shares outstanding for the
period plus the weighted-average shares
for the dilutive effect of share-based
awards outstanding.
Future Policy Benefits – A liability
established to provide for claims that will
occur in the future. This is the largest
liability on the balance sheet.
Incurred Claims – The amount of claims
paid plus the change in unpaid policy
claims liability.
Persistency – The percentage of
premiums remaining in force at the end of
a period, usually one year. Example: 95%
persistency would mean that 95% of the
premiums in force at the beginning of the
period were still in force at the end of the
period.
Profit Repatriation – Profits of Aflac
Japan that are transferred to Aflac U.S.
Return on Average Invested Assets –
Net investment income as a percentage
of cash and average investments at
amortized cost.
Total New Annualized Premium
Sales – The annual premiums on policies
sold and incremental annual premiums on
policies converted during the reporting
period.
Total Return to Shareholders –
The appreciation of a shareholder’s
investment over a period of time,
including reinvested cash dividends paid
during that time.
75
Year-end Five-Year 10-Year
Market Value 2006 Annual Annual
Symbol (In billions) Return* Return* Return*
Aflac AFL $ 22.7 .3% 14.5% 16.7%
Lincoln National LNC 18.4 28.4 9.9 13.0
MetLife MET 44.9 21.6 14.3 **
Principal Financial PFG 15.8 25.4 21.1 **
Prudential Financial PRU 41.1 18.6 22.3 **
Torchmark TMK 6.3 15.6 11.1 12.5
Unum Group UNM 7.1 (7.3) (2.7) (3.5)
*Includes reinvested cash dividends **Not applicable