Aflac 2009 Annual Report Download - page 36

Aflac Japan Sales
Our stated objective for 2009 was for sales to be at to
up 5%. We exceeded our objective with a 6.7% increase
in sales during 2009. The following table presents Aac
Japan’s total new annualized premium sales for the years
ended December 31.
The following table details the contributions to total new
annualized premium sales by major insurance product for
the years ended December 31.
Medical insurance sales increased 15.7% over 2008. Since
rst launching our stand-alone medical product, EVER,
in 2002, we have been the number one seller of medical
insurance policies in Japan. In the past six years, we have
segmented the market by creating a suite of EVER products
with variations that appeal to specic Japanese consumers.
In August 2009, we introduced a new generation of our
popular EVER product, the most notable changes being
an enhanced surgical benet and gender-specic premium
rates. Overall, the protability of the new plan is similar to
our original EVER product. We have had a positive initial
response to our revised EVER product, selling more than
346,800 of the revised policies since it was introduced. With
continued cost pressure on Japan’s health care system, we
expect the need for medical products will continue to rise in
the future, and we remain encouraged about the outlook for
the medical insurance market.
Cancer insurance sales declined 11.3% in 2009, compared
with 2008. Despite this decrease, Aac remained the
number one seller of cancer insurance policies in Japan.
Our cancer policies are also marketed through a strategic
alliance with Dai-ichi Mutual Life. In 2009, Dai-ichi Life sold
more than 122,000 of our market-leading cancer policies.
We are convinced that the affordable cancer products Aac
Japan provides will continue to be an important part of our
product portfolio.
Sales of cancer and medical insurance in Japan have
beneted from the bank channel. In December 2007,
banks were permitted to sell supplemental health insurance
products to their customers. Our bank channel sales
increased 132.2% during 2009, compared with 2008, and
represented 6% of total new sales. By the end of 2009,
we had agreements with 353 banks to sell our products.
We have signicantly more selling agreements with banks
than any of our competitors in Japan. We believe our long-
standing and strong relationships within the Japanese
banking sector, along with our strategic preparations, have
proven to be an advantage as this channel opened up for
our products.
Ordinary life product sales increased 33.9% during 2009,
compared with 2008. The increase in our ordinary life
products was driven by a favorable consumer response
to our child endowment product that we introduced at the
end of rst quarter 2009. Our child endowment product
is appropriate for new parents who are re-evaluating their
insurance coverage. This product offers a death benet until
the child reaches age 18, and it pays a lump-sum benet
at the time of the child’s entry into high school as well as
an educational annuity for each of the four years during
his or her college education. We believe that traditional
life insurance products, like our child endowment plan,
provide opportunities for us to sell our third sector cancer
and medical products. For every 10 child endowment plans
that were purchased in 2009, we sold two additional Aac
products to the same customers.
We remain committed to selling through our traditional
channels, which allows us to reach consumers through
afliated corporate agencies, independent corporate
agencies and individual agencies. In 2009, we recruited
approximately 4,600 new sales agencies, an increase of
17.9% over 2008. At the end of the year, Aac Japan was
represented by more than 19,600 sales agencies, or more
than 110,500 licensed sales associates employed by those
agencies.
We believe that there is still a strong need for our products
in Japan. Our objective for 2010 is for total new annualized
premium sales to be at to up 5% in Japan.
Aflac Japan Investments
Growth of investment income in yen is affected by available
cash ow from operations, the timing of investing the cash
ow, yields on new investments, and the effect of yen/dollar
exchange rates on dollar-denominated investment income.
Aac Japan has invested in privately issued securities to
secure higher yields than those available on Japanese
government or other public corporate bonds, while still
adhering to prudent standards for credit quality. All of our
privately issued securities are rated investment grade at
the time of purchase. These securities are generally issued
with documentation consistent with standard medium-term
note programs. In addition, many of these investments have
In Dollars In Yen
(In millions of dollars
and billions of yen) 2009 2008 2007 2009 2008 2007
Total new annualized
premium sales $1,310 $1,115 $974 ¥122.3 ¥114.7 ¥114.6
Increase (decrease)
over prior year 17.5% 14.4% (3.5)% 6.7% – % (2.4)%
2009 2008 2007
Medical 36% 34% 33%
Cancer 28 34 33
Ordinary life 29 23 22
Rider MAX 3 5 7
Other 4 4 5
Total 100% 100% 100%
We’ve got you under our wing.
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