Aflac 2011 Annual Report Download - page 8

6 AFLAC INCORPORATED 2011 YEAR IN REVIEW
Q&A A CONVERSATION WITH CHAIRMAN AND CEO DAN AMOS
Q
What were your greatest challenges
in 2011?
A
Our greatest challenges in 2011 were twofold. The first
challenge was determining how the natural disaster in
Japan would affect us. Following the events in March 2011, we
said we believed Aflac Japan would still achieve its sales objec-
tive, and we significantly exceeded it! Our second challenge
was managing our investments in this volatile low-interest-
rate environment, and we’re making progress as we continue
our vision to be a world-class investment organization.
Q
What do you think is your greatest challenge
over the next couple of years?
A
We are continually looking for ways to strengthen
Aflac’s earnings while protecting our policyholders.
Over the next couple of years, we’ll focus a great deal
of our efforts on our investment strategies and tactics
to improve the quality of our investment portfolio and
increase diversification while reducing risk. Our focus
will remain on investing in assets that best align with
the characteristics of our products to enable us to earn
competitive returns while fulfilling the promise we’ve made
to our policyholders.
Q
How do you view the business
units currently?
A
Traditionally, I’ve viewed Aflac Japan and Aflac U.S. as
our two business units, providing our premium income
cash flow. I’ve come to view our investment function as our
third business unit, especially since the financial crisis, as
this function is responsible for investing our policyholder
funds that generate investment income. From a revenue
and profitability standpoint, income from investments
is just as critical to our success as the premium income
generated by Aflac U.S. and Aflac Japan. We are currently
in the process of enhancing our investment unit to ensure
that we have a world-class investment division that
enhances our ability to meet the needs of our policyholders
and shareholders..
Q
Do you think Aflac has finished its proactive
investment portfolio derisking?
A
Enhancing the quality of our investment portfolio is
an ongoing process because financial markets and
the health of the world economy continue to evolve. For
example, last year alone, we made tremendous progress
in reducing our positions in peripheral European holdings.
In addition, we’re creating long-term strategic plans to
further diversify and improve the quality of our investment
portfolio. In good times and challenging times, we continue
to evaluate our holdings in light of the economic climate,
I don’t see this having a finite end due to the continually
changing environment.
Q
What makes the Aflac Duck so remarkable, and why
do you think he has become such a household name?
A
He’s even amazed me – I’ve been astounded with
his success in both the United States and Japan. His
popularity transcends the Pacific Ocean and has catapulted
us to a whole new level of corporate responsibility where
nine out of ten people know who we are in both countries.
He has also come to symbolize our philanthropic activities.
I think the Aflac Duck is lovable and direct. If you notice in
our U.S. commercials, people don’t listen to the Aflac Duck,
which sometimes frustrates him. Many people can easily
identify with that. In Japan, the Aflac Duck has a gentler
personality, but in both countries, the Aflac Duck has
opened doors for us that were previously closed.
Q
How has your role as CEO changed
over the years?
A
Well, it’s not too typical to see a tenure of 22 years
for a CEO. Over those two-plus decades, I would say
that the biggest change is that the focus isn’t just on sales
anymore; it’s also on investments. This has prompted me
Aflac 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. Aflac’s acquisition of Aflac Group in October 2009 expanded our product
portfolio to include voluntary group insurance products on top of the individually issued products we’ve offered since 1955. Since then, Aflac
has continued to leverage our brand and broaden the appeal of our products to consumers throughout the United States.