Aflac 2008 Annual Report Download - page 25

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It’s no mystery how Aflac makes a difference.
Investments
We have always believed that a conservative
investment approach helps ensure that Aflac
is well-positioned to fulfill its promises to
claimants, policyholders, employees, sales
associates and shareholders. In light of the
turmoil and uncertainty in global financial
markets, we believe our approach proved
once again to be prudent and effective.
Some investing highlights from 2008 include:
•Investmentsandcashwere$6.4billionatthe
endof2008,down13.6%from2007,dueto
lower market values of the securities we own.
•Netinvestmentincomerose.9%,from$500
millionin2007to$505millionin2008.
•Theaverageyieldonnewinvestmentswas
7.60%in2008,upfrom6.44%in2007.
Corporate debt securities again accounted
for the majority of our U.S. investments
in 2008. Based on amortized cost, 98.4%
of our holdings were investment grade at
the end of 2008, and only 1.6% were rated
below investment grade.
Outlook for Aflac U.S. – Great
Opportunity in a Vast Market
Despite Aflac’s growth over many years, the
United States remains an underpenetrated
market for the protection products we
offer. Our more than 427,700 payroll
accounts represent just 7% of the
approximately six million small businesses
in the United States. That equates to tens
of millions of consumers who can benefit
from our affordable insurance protection,
and we’re working hard to connect with
them. To capitalize on the opportunities we
see in the U.S. market, we will:
• Rene our product line – We will stay close
to consumers’ needs and offer solutions with
innovative products that provide value with
benefits that meet those needs.
• Grow and develop our distribution system
– Continued expansion, training, support and
leadership are essential at all levels to extend
our reach to more consumers.
• Communicate a clear brand message to
reach a broad audience – We will intensify our
connections with employers and their employees
by maintaining our strong brand recognition
while focusing on further defining our brand
and adding new ways to reach consumers
through print and online advertising.
• Improve efciency, mobility and ultimately
productivity through cutting-edge technology
– We will continue to adapt and upgrade new
technology to improve the services we offer
our customers and the flexibility we give sales
associates while at the same time controlling
operating expenses.
The Aflac Cancer Center and Blood
Disorders Service of Children’s
Healthcare of Atlanta provides state-
of-the-art care in a very nurturing
environment to help children battling
cancer and blood disorders in Georgia,
the United States and throughout the
world. Two-year-old Tristan Anderson
(left), one-year-old Maggie Jo Hutchins
(center) and four-year-old Landon
Nguyen, patients at the Aflac Cancer
Center, take time away from treatment
to enjoy some playtime with Dr.
William G. Woods, medical director
of the Aflac Cancer Center. Dr. Woods
leads his specialized staff in treating
pediatric hematology and oncology
patients. Since 1995, the Aflac family
has given more than $47 million to
this outstanding facility that is so
committed to enhancing and positively
impacting the lives of children.
“ We chose Aflac because of its outstanding reputation and because of the product selection. We are
competing in tough markets, and we try to be an employer of choice. Aflac makes us more attractive
as a company because it strengthens our benefit package, and employees feel people are looking
out for them. The service is outstanding, and it’s one of our more popular benefits. Also, Aflac is not
afraid to pay a claim; you don’t have to fight and hassle for the benefit check.”
—Julie Davis, Director of Human Resources, The Tharpe Company, Statesville, NC