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8Aflac Incorporated Annual Report for 2008
Aflac Japan: Remaining Number One
Aflac Japan again retained the distinction of
being the number one seller
of both cancer and medical
insurance policies in Japan,
a title we have held for
many years. Following two
years of discouraging sales
growth, we were optimistic
for most of the year that
Aflac Japan would achieve
its sales target for 2008 due
in part to new distribution opportunities.
Even though our new bank channel sales
grew for the first nine months of the year,
they were still lower than we expected. And
following the emergence of the financial
crisis late in the year, bank channel sales fell
off sharply as many banks made thousands
of customer service calls to those who had
purchased annuities from other companies.
These service calls greatly reduced the time
available for banks to offer our products
to their customers. As a result, we did not
reach our sales target for the year, although
sales were up slightly in 2008 to ¥114.7
billion.
Despite slower new sales growth,
Aflac Japan produced solid financial
performance. Once again,
our stable block of in-force
business was marked by
strong persistency and
improving profitability. The
yields we achieved on our
sizeable investment cash flows
were better than expected,
and our overall financial
results were consistent with
our expectations. Following are some
financial highlights from 2008:
•Premiumincomerose3.5%
to ¥1.10 trillion, compared
with ¥1.06 trillion in 2007.
•Totalrevenuesincreased
2.8%to¥1.31trillion,
compared with ¥1.28 trillion
a year ago.
•Pretaxoperatingearnings
rose8.4%from¥214.7
billion in 2007 to ¥232.8
billion in 2008.
The Impact of the Yen/Dollar
Exchange Rate
Aflac Japan collects premiums in yen,
pays benefits and expenses in
yen and primarily holds yen-
denominated assets to support
yen-denominated liabilities.
With the exception of a limited
number of transactions,
we do not convert yen into
dollars. Therefore, currency
changes do not have a material
effect on Aflac in economic
terms. However, for financial reporting
purposes, we translate Aflac Japan’s income
statement from yen into dollars using an
Aflac Japan
Friends and Aflac Japan colleagues Nao Iijma (left), who works in Claims, and Kanako Iguchi, who works in
Underwriting, have a lot in common: They both have worked for Aflac Japan for more than two years and
enjoy the opportunity to make a difference each day in the lives of Aflac policyholders. After a long day at
work, each has found that a friendly and competitive tennis match helps relieve stress and rejuvenate their
spirits. In fact, both women have played tennis for about 14 years (even playing together on the same tennis
team in college) and both now play for the tennis club at Aflac Japan, along with about 30 other colleagues
who strive each day to make a difference in the lives of policyholders.