Aflac 2010 Annual Report Download - page 15

Pillar Products:
Medical and Cancer Insurance
It’s important to remember that the
foundation of our product portfolio has
been, and continues to be, medical
and cancer products, both of which
were the number one and number two
contributors, respectively, to 2010 total
sales. In 2010, we maintained our position
as the number one seller of medical and
cancer products in Japan, which confirms
the continued popularity and demand for
our innovative plans.
Building from this solid foundation, we
continue to update our two pillar products
and leverage our competitive advantages,
such as branding and administrative
efficiency, to grow our product offerings
and meet the evolving needs of
consumers.
MEDICAL PRODUCTS: In early 2002,
we introduced EVER, a stand-
alone, whole-life medical product.
Almost immediately, Aflac became
the number one seller of medical
insurance in Japan. Since then, we
have been expanding our suite of
EVER products to appeal to new
market segments. In 2009, a new
generation of EVER product was
introduced with enhanced surgical
benefits and gender-specific premium
rates. In June 2010, we launched an
enhanced version of Gentle EVER, our
non-standard medical product that
was originally introduced in 2007, for
consumers who cannot qualify for our
popular New EVER policy.
CANCER PRODUCTS: In September
2007, we introduced Cancer Forte,
the first major product revision we
made to our base cancer policy since
2001. In June 2010, we introduced
Corsage, a new female-specific
cancer rider to appeal to younger
Japanese females. And in 2011 our
newest cancer policy, called Days,
will further strengthen our cancer
portfolio, most notably with enhanced
outpatient and anticancer medication
benefits.
Aflac Japan Distribution
The Bank Channel
Soars to New Heights
• Sales of Aflac products through banks
increased 165.1% over 2009
• Aflac Japan was represented by 364 banks
at the end of 2010, or more than 90% of the
total number of banks in Japan
• There are still many bank branches that
are not actively selling Aflac products,
suggesting there’s growth potential
remaining in this channel
Traditional Sales Channels
and Strategic Alliances
• Aflac Japan recruited approximately 4,800
new sales agencies, up 4.4% over 2009,
and new sales agencies’ productivity has
been steadily improving
• Aflac Japan was represented by more than
19,600 sales agencies at the end of 2010,
equating to more than 115,400 licensed
sales associates employed by those
agencies
• Dai-ichi Life: We believe this alliance
has been one of the most successful
partnerships in the insurance industry since
it was first launched in 2001, selling about
97,000 of our market-leading cancer policies
in 2010
Aflac Japan’s Products: Proactive
Protection for Soaring Expenses
Product Need: Japan’s population is covered
by a compulsory and universal health care
insurance system. Over the last three decades,
Japanese consumers have been required to
pay more out of their own pockets toward
this system, with copayments incrementally
rising to 30% due to Japan’s aging population,
declining birthrate, and the expense of state-
of-the-art medical advances. Aflac Japan’s
product development team researched
specific financial burdens consumers face
and how these increased expenses have
affected Japanese consumers. These findings
equipped Aflac Japan with valuable information
to create innovative and customized products
and benefits. Our administrative efficiency and
ability to control expenses have resulted in
low operating expense ratios in Japan, which
allows us to create products that provide
excellent value to consumers while paying
competitive commissions.
Emerging Products:
WAYS and Child Endowment
In December 2007, banks were
permitted to sell the traditional health-
related products Aflac offers to their
customers for the first time. As the bank
channel has become a larger contributor
to sales, Aflac Japan has also been
enhancing its product portfolio to better
meet the needs of banks, including
WAYS and child endowment products,
which were key drivers to sales growth
in 2010.
Aflac’s child endowment product was
a strong contributor to sales growth
in 2010. Our strong brand and its
unmatched returns help make our
endowment policy the product of
choice.
WAYS was another driver of sales
growth in 2010. It is a unique hybrid
whole-life product that can be
converted to a fixed annuity, medical
coverage or nursing care benefits
when the policyholder reaches a
predetermined age. WAYS is popular,
particularly among older consumers
as they search for ways to better
protect their assets. We believe there
is strong growth potential for WAYS
as the bank channel continues to
become a greater contributor to sales.
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