Aflac 2008 Annual Report Download - page 19

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It’s no mystery how Aflac makes a difference.
Strong Brand Helps Aflac Stand Out
We are not the only company to identify
the opportunities for supplemental health,
or third sector, products in Japan – we were
just the first. Since 2001, we have seen a
significant number of competitors enter
the cancer and medical insurance markets.
Our effective advertising helps Aflac stand
out in this crowded market and amplify the
message that Aflac has quality and innovative
products that protect policyholders. Aflac
Japan has forged a strong connection with
consumers through Aflac Duck commercials,
which are just as popular in Japan as they are
in the United States. Based on research by
CM Databank, the commercials for our EVER
product that feature the Aflac Duck have
continued to be consistently rated as either
the number one or number two commercial
in the life and non-life insurance category
since June 2003. We believe advertising and
branding reinforces consumers’ favorable
perceptions of Aflac.
Technology Enables Valuable Efficiencies
Technology has long been the cornerstone
of Aflac Japan’s most significant competitive
strength – administrative efficiency. Our
maintenance expenses per policy in force
remain significantly lower than every other
life insurance company operating in Japan,
bringing quality products to consumers at
affordable prices while compensating our
sales force with competitive commissions.
Throughout the years, we have undertaken
many initiatives to improve our efficiency,
including the development and promotion
of Aflac Japan’s electronic enrollment
software and our net billing system.
We believe we have also benefited from the
2006 consolidation of three different call
centers into the Aflac Contact Center. In
the last two years, our consolidated contact
center has continued to evolve, and now we
consider it a very important venue to serve
both our customers and sales agencies. We
not only answer inquiries from customers
at the contact center, but also send out
brochures to prospective customers so
we can turn an inbound phone call into a
potential sales opportunity. We are also
enabling our sales office employees to spend
more time on sales-related business activities
by centralizing inquiries from our field force
to the associate support center, and we have
also established exclusive units in the contact
center for the bank channel and Japan Post
Network Co., Ltd. so we can provide quality
services for these channels as well.
Conservative Investment Approach
Offers Safety and Protection
Insurance company investment portfolios
took center stage in 2008. As investors
scrutinized insurers’ investment risks,
we believe our conservative investment
approach once again proved prudent. We
strive to maximize investment income
growth while mitigating investment risk.
As such, we emphasize liquidity, safety and
quality when purchasing investments that
best match our policy liabilities.
Some Aflac Japan investment highlights for
2008 follow:
•Investmentsandcashincreased27.4%to$61.8
billion at the end of 2008. In yen, investments
andcashwereup1.6%.
•Netinvestmentincomeincreased14.0%to
$2.1 billion. In yen, net investment income was
unchanged.
•Theaverageyieldonnewinvestmentswas
3.43%in2008,comparedwith3.38%in2007.
Aflac Japan’s overall credit quality remained
high. At the end of 2008, 80.9% of our debt
securities and perpetual securities were
rated A or better on an amortized cost basis.
Only 1.9% of Aflac Japan’s holdings were
rated below investment grade at the end
of 2008. We believe that our conservative
investment approach serves our customers
and shareholders very well.
Opportunities for Future Growth
As we outline our strategies for the future,
we believe the competitive strengths that
have driven our market leadership will
continue to guide our business. As an aging
population continues to cope with higher
out-of-pocket expenses for medical care,
we are convinced Aflac’s insurance products
will play an important role. To help us reach
more potential customers in the Japanese
market, we will:
• Improve upon our product line – We will
research and create innovative products and
adapt current products to match the evolving
needs of Japanese consumers.
• Promote our number one brand position – We
will capitalize on our market-leading status to
attract consumers and distinguish our products
while emphasizing the attributes that led us to
our number one position.
• Expand our reach – We will focus on enhancing
the productivity of our sales force, while also
developing new channels to better reach new
customers.
• Advance operational efciency – We will
streamline our business processes to increase
our core competitive advantage and provide
convenience for policyholders and consumers,
while leveraging new technology.
“ Aflac is insurance for living. That is what I had heard before, and I cannot agree
more, especially after having gone through treatments for the recurrence of
disease. All the phone calls were handled very pleasantly, and it was always nice
and comforting to talk with kind and caring people who were so willing to help.”
—Claimant; Kanto area, Japan