Aflac 2011 Annual Report Download

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AFLAC INCORPORATED
2011 YEAR IN REVIEW

Table of contents

  • Page 1
    AFLAC INCORPORATED 2011 YEAR IN REVIEW

  • Page 2
    ...Promise Message From Management A Conversation With Chairman and CEO Dan Amos Aflac Incorporated Financial Highlights Aflac Japan Aflac U.S. Selected Financial Data Aflac Incorporated Investment Summary Investor Facts Board of Directors and Executive Management Glossary of Selected Terms 2 4 6 8 10...

  • Page 3
    ... number one life insurance company in terms of individual insurance policies in force in Japan, providing financial protection to more than 50 million people. W H Y I LOVE AFLAC A woman from Osaka, Japan, who was diagnosed with cancer approximately 10 years after purchasing Aï¬,ac's cancer policy...

  • Page 4
    ... a positive consumer experience and building a strong brand. It's what we call The Aï¬,ac Way. Our goal is to accomplish this while providing our customers with the best value in voluntary insurance products in Japan and the United States by effectively and efficiently managing the company's assets...

  • Page 5
    ... expANded distributioN chANNels yields New AccouNts ANd customers PROTECTING AGAINST: ASSET LOSS INCOME LOSS SUPPLEMENTAL MEDICAL EXPENSES REACHING CUSTOMERS AT: THE WORKSITE HOME RETAIL LOCATIONS INSURING: MORE THAN 50 MILLION PEOPLE AND GROWING AFLAC INCORPORATED 2011 YEAR IN REVIEW 3

  • Page 6
    ..., I am proud that 2011 was the strongest year in the company's history from an operational perspective. This achievement reflects our company's ability to remain focused on our growth strategy in good times and bad: Aflac offers relevant products that help protect consumers against income and asset...

  • Page 7
    ... in total new annualized premium sales in the United States and Japan in 2011. Total revenues rose 6.9% to $22.2 billion, reflecting solid growth in premium income and net investment income, as well as the benefit of the stronger yen/dollar exchange rate for the year. Investments Our vision is...

  • Page 8
    .... In good times and challenging times, we continue Aï¬,ac Group Insurance in Columbia, South Carolina, kicks off 2012 with a visit from Chairman and CEO Dan Amos, who commends them on their tremendous growth and success over the past two years. Aï¬,ac's acquisition of Aï¬,ac Group in October 2009...

  • Page 9
    ...exchange information faster has changed everything we do, and we've moved from a totally paper company when I came in, to an almost paperless company. and their families through the Aï¬,ac Cancer Center and Blood Disorders Service of Children's Healthcare of Atlanta and Aï¬,ac Japan's Parents House...

  • Page 10
    ...12.3 13.0 PREMIUM INCOME (In billions) 8.6 11.3 9.9 Premium income rose 12.7% in 2011, benefiting from improved persistency and strong sales through banks in Japan and a stronger average yen/dollar exchange rate. 02 03 04 05 06 07 08 09 10 11 U.S. Japan 8 AFLAC INCORPORATED 2011 YEAR IN REVIEW

  • Page 11
    ... cash flows and a stronger yen/dollar exchange rate. $13.7 12.1 11.3 10.5 8.5 7.5 6.6 8.9 9.0 9.3 BENEFITS AND CLAIMS (In billions) Aflac paid or provided for $13.7 billion in benefits for insureds in 2011. U.S. Japan 02 03 04 05 06 07 08 09 10 11 AFLAC INCORPORATED 2011 YEAR IN REVIEW 9

  • Page 12
    ...Moreover, Aflac Japan remained the number one seller of cancer and medical insurance policies in Japan. Since the bank channel opened up in December 2007, banks like AWA Bank Ltd., a regional Japanese bank founded in the Tokushima prefecture in 1896, have experienced great success in selling Aï¬,ac...

  • Page 13
    ...110 100 90 80 70 During 2011, the average yen/dollar exchange rate strengthened 10.0%, which magnified Aflac Japan's growth rates in dollar terms. Yen/Dollar Premium income rose 15.8% Exchange Rate (Closing rates) to $15.6 billion, up from $13.5 billion in 2010. Total revenues were up 14.9% to $18...

  • Page 14
    ... over 2010. Aï¬,ac Japan was represented by 370 banks at the end of 2011, or more than 90% of the total number of banks in Japan. While there are still further sales opportunities in this market, growth is unlikely to be as rapid as it has been in recent years. 12 "After I filed my claim, I was...

  • Page 15
    ... and WAYS, contributed about half to new sales in 2011 as a result of success through the banks. WAYS was the primary driver of Aflac Japan's remarkable sales growth in 2011. This unique hybrid whole-life product can be converted to a fixed annuity, medical coverage or nursing care benefits when the...

  • Page 16
    ... to help children battling cancer. The driving force behind fundraising efforts for the Aflac Parents House is Aflac Japan's sales force, which is represented by Mr. Yutaka Matsunami (left), president of Total Insurance Service Limited. Through generous donations from Aflac Japan's sales agents and...

  • Page 17
    AFLAC JAPAN - KEY OPERATIONAL METRICS Total Policies and Riders in Force* Annualized Premiums in Force** Total Number New Total of Banks Annualized Number Representing Premiums** of Agencies*** Aflac**** 2011 2010 2009 2008 2007 2006 2005 ...

  • Page 18
    ... is to be the leading provider of voluntary insurance in the United States-a position we've held for many years. Our 2011 sales results were consistent with that vision. The Aï¬,ac sales force overcame lingering economic challenges to generate a 6.8% increase in new annualized premium sales for the...

  • Page 19
    ...Disability Life •Term •Whole ASSET-LOSS PROTECTION Accident Cancer Critical Illness Hospital Intensive Care SUPPLEMENTAL MEDICAL Hospital Indemnity Dental Vision Our sales and marketing areas synchronized their efforts to benefit our sales results. For example, in 2011, strategic, coordinated...

  • Page 20
    ...Aflac family from our sales force to our employees, managers, officers and board of directors. The common goal of fighting childhood cancer has transformed our culture and brought us together as a team. Recognized as one of the top childhood cancer centers in the country by U.S. News & World Report...

  • Page 21
    ...nances." - Kim Hastings, MI AFLAC U.S. - KEY OPERATIONAL METRICS Policies and Certificates in Force* Annualized Premiums in Force** Total New Annualized Premiums** Licensed Sales Associates and Brokers 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 11,732...

  • Page 22
    ... impact from ASC 815 for all years presented prior to 2011 **Translation effect on Aflac Japan's results and Parent Company yen-denominated interest expense Amounts in 2001 through 2004 have been adjusted for adoption of SFAS 123R on January 1, 2005 20 AFLAC INCORPORATED 2011 YEAR IN REVIEW

  • Page 23
    Aflac Incorporated and Subsidiaries 2007 $ 12,973 2,333 28 59 15,393 9,285 3,609 12,894 2,499 865 2006 $ 12,314 2,171 79 52 14,616 9,016 3,336 12,352 2,264 781 2005...23.00 24.56 ¥ 131.95 121.54 AFLAC INCORPORATED 2011 YEAR IN REVIEW 21

  • Page 24
    ... environment. GEOGRAPHIC INVESTMENT EXPOSURE (December 31, 2011, At Amortized Cost) 2.2% 11.0% 13.4% 6.0% 7.9% 5.0% 4.8% 15.3% 34.4% Japan Other Asia US Germany UK Peripheral Eurozone Other Europe Other Cash Total Investments and Cash - $101.5 Billion 22 AFLAC INCORPORATED 2011 YEAR IN REVIEW

  • Page 25
    ... to certain market cycles. For example, we plan on adding new asset classes to further diversify our portfolio. In addition, we plan on hiring third-party investment advisors to manage a portion of our overall assets and provide additional expertise to complement our asset strategies. Our vision is...

  • Page 26
    ...Incorporated marked the 29th consecutive year the company increased its annual dividend. Including reinvested cash dividends, Aï¬,ac's total return to shareholders declined 21.3% in 2011. Aï¬,ac's share price decreased 23.3% from the 2010 year-end price of $56.43 to the 2011 year-end price of $43.26...

  • Page 27
    ... reserved. COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN* Among Aï¬,ac Incorporated, the S&P 500 Index and the S&P Life & Health Insurance Index $300 250 200 150 100 50 Aflac Incorporated S&P 500 S&P Life & Health Insurance 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 *$100...

  • Page 28
    ... 64, former executive vice president of insurance operations for Aï¬,ac U.S., served on the board of advisors for Emory University Medical School and as chief of staff at Doctors Hospital in Columbus, Georgia. He was first elected to Aï¬,ac Incorporated's board in 1987. Barbara K. Rimer, Dr. PH, 63...

  • Page 29
    ... in Washington, D.C. Koji Ariyoshi, 58, executive vice president; director of Sales and Marketing, Aï¬,ac Japan, joined Aï¬,ac as senior vice president responsible for sales planning in 2008. Since then, he has managed various departments, including Retail Marketing, Alliance Management and Hojinkai...

  • Page 30
    ... traditionally used in Japan providing cash to help fund higher costs associated with a child entering high school and college in Japan DAYS - Revised base cancer policy from Aflac Japan's portfolio that enhances outpatient and anticancer medication benefits Derisking - A form of risk management...

  • Page 31
    ....2667 Individual/retail shareholders with questions about the company Information requests such as Form 10-K, quarterly earnings releases and other financial materials Policyholders/claimants tel: 800.992.3522 (en Español, tel: 800.742.3522) Ichiro Murakami General Manager, Aflac Japan Investor...

  • Page 32
    NYSE: AFL aï¬,ac.com | 706.596.3264 or 800.235.2667 Aï¬,ac Incorporated | 1932 Wynnton Road Columbus, Georgia 31999