Aflac 2012 Annual Report Download

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DELIVERING OUR PROMISE
2012 YEAR IN REVIEW

Table of contents

  • Page 1
    D E LIV E R I N G O U R PRO M I S E 2012 YEAR IN REVIEW

  • Page 2
    ... insurance at the worksite in the United States and the number one life insurance company in terms of individual insurance policies in force in Japan, providing financial protection to more than 50 million people worldwide. TABLE OF CONTENTS The Aï¬,ac Way: Our Promise Message from Management...

  • Page 3
    ...help. Michele says, "I recommend Aï¬,ac to everyone I come in contact with, especially if they have kids and they play sports. I don't know what I would do if I didn't have the help of Aï¬,ac. I'm glad that my job took the time to make Aï¬,ac available to us." AFLAC INCORPORATED 2012 YEAR IN REVIEW...

  • Page 4
    ... The Aï¬,ac Way, and it's the foundation of every endeavor we undertake. Our goal is to fulfill this promise while also offering our customers the best value in voluntary insurance products in Japan and the United States. HOW WE KEEP OUR PROMISE Income from Premiums Policy premiums are the primary...

  • Page 5
    ... in Japan and the United States OUR STRATEGY FOR GROWTH RELEVANT PRODUCTS sold through 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...

  • Page 6
    ... objectives, we also concentrated on efforts to enhance our business. Combined, we generated more than $4.0 billion in total new annualized premium sales in the United States and Japan in 2012. Total revenues rose 14.4% to $25.4 billion, reï¬,ecting solid growth in premium income and net investment...

  • Page 7
    ... an effective means for diversifying our risk and enhancing portfolio liquidity, while also improving new money yields in Japan. With the success of this program in 2012, we intend to continue it into 2013. We made a significant financial business commitment to build out the investment function...

  • Page 8
    ...cult sales comparisons we face following three phenomenal years of banks' sales of WAYS, our hybrid whole-life product that sells for a higher premium. Additionally, we've already cycled through the first major pass at offering products to a large portion of many banks' customers, particularly WAYS...

  • Page 9
    ... broadened the market and made the universe of potential customers bigger. In 2012, Aï¬,ac Japan remained the leading seller of cancer and medical insurance policies in Japan, and that tells the big story! In the United States, we are number one in the voluntary supplemental insurance market at the...

  • Page 10
    AFLAC INCORPORATED FINANCIAL HIGHLIGHTS $25.4 22.2 20.7 18.3 TOTAL REVENUES (In billions) 11.4 16.6 14.4 14.6 13.3 15.4 Total revenues rose 14.4% to a record $25.4 billion in 2012, benefiting from solid growth in premium income and lower realized investment losses. U.S. Japan 03 04 05 06 07 08 ...

  • Page 11
    ... ï¬,ows. 49.0 U.S. Japan 03 04 05 06 07 08 09 10 11 12 $15.3 13.7 12.1 11.3 10.5 8.5 7.5 9.3 8.9 9.0 BENEFITS AND CLAIMS (In billions) Aï¬,ac paid or provided for $15.3 billion in benefits for insureds in 2012. U.S. Japan 03 04 05 06 07 08 09 10 11 12 AFLAC INCORPORATED 2012 YEAR IN REVIEW 9

  • Page 12
    ... and distribution channels. In addition, Aï¬,ac Japan has honed its ability to leverage the popularity of the Aï¬,ac Duck to create separate and unique characters to market specific products. In 2012, Aï¬,ac Japan remained the leading seller of cancer and medical insurance policies in Japan. 2012...

  • Page 13
    ... our promise as the right thing to do, but they take it a step further by building long-term relationships that solidify trust in the Aï¬,ac brand, which frequently helps generate new business through the personal experiences of satisfied customers. AFLAC INCORPORATED 2012 YEAR IN REVIEW 11

  • Page 14
    ...to New Heights • Sales of Aflac products through banks increased 106.4% over 2011. • Aflac Japan was represented by 372 banks at the end of 2012, or more than 90% of the total number of banks in Japan. While there are still further sales opportunities in this market, following two years of...

  • Page 15
    ... to potential customers in 2012. The foundation of our product portfolio has been, and continues to be, cancer and medical insurance products. In recent years, Aï¬,ac Japan's product portfolio has expanded beyond traditional health-related products to offer more options to Japanese consumers through...

  • Page 16
    ... the primary driver of Aï¬,ac Japan's remarkable sales growth in 2012. Life insurance products including WAYS contributed about 65% to new sales in 2012 primarily as a result of success through the banks. Selling our products through banks has given us additional opportunities to connect with more...

  • Page 17
    ... to market specific products and help drive sales growth. For example, in 2009, we combined the Aï¬,ac Duck with the traditional Japanese cat character, Maneki Neko, to promote our New EVER product. A survey showed that our commercials featuring the cat/duck combination soared to number one...

  • Page 18
    ... IMPROVES PRODUCTIVITY, SERVICE AND VALUE Technology has long been the driver of one of Aï¬,ac Japan's significant competitive strengths - administrative efficiency. At Aï¬,ac Japan, the number of policies in force per administrative employee is much larger than that of every other life insurance...

  • Page 19
    AFLAC JAPAN AFLAC JAPAN - KEY OPERATIONAL METRICS Tobal Policies and Riders in Force* Annualized Premiums in Force** New Annualized Premiums** Tobal Number Tobal Number of Agencies, of Banks Including Represenbing Banks Aflac**** 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 34,880 33,372...

  • Page 20
    ... the leading provider of voluntary insurance in the United States - a position we've held for many years. In 2012, the economic landscape in the U.S. continued to be challenging, especially for the small business segment where more than 90% of our products are sold. New annualized premium sales for...

  • Page 21
    AFLAC U.S. Throughout his 18 years with Aï¬,ac, Alfred Rietkerk, state sales coordinator, has succeeded by leading through example and instilling a culture of camaraderie, caring, and strong work ethic within his team. Alfred describes his philosophy by saying, "My number one priority is to build ...

  • Page 22
    .... Aï¬,ac Group Insurance employees make it a daily priority to deliver on our promise by providing policyholders with quality customer service. Linda Green, Aï¬,ac Group Customer Service Specialist II, helps to train new employees on the Aï¬,ac Group bilingual team, a group of employees who speci...

  • Page 23
    ... supplemental products to his clients to provide his customers with the options and peace of mind they seek. AFLAC U.S. - KEY OPERATIONAL METRICS Policies and Cerbificabes in Force* Annualized Premiums in Force** Tobal New Annualized Premiums** Licensed Sales Associabes and Brokers 2012 2011...

  • Page 24
    ...the United States and Japan over the long-term. Beginning in June 2013, Japan-based pediatric cancer specialists will come to the Aï¬,ac Cancer and Blood Disorders Center of Children's Healthcare of Atlanta to observe and share best practices related to the care and treatment of children with cancer...

  • Page 25
    ... productive. In 2012 we took notable steps to improve our online user experience for our customers. We also continued to enhance tools needed for our sales associates and brokers to effectively and efficiently manage their businesses. We added several mobile applications that allow our sales force...

  • Page 26
    ... and 2011 have been adjusted for retrospective adoption of revised accounting guidance related to deferral of policy acquisition costs effective January 1, 2012. Amounts in 2002 through 2004 have been adjusted for adoption of SFAS 123R on January 1, 2005. 24 AFLAC INCORPORATED 2012 YEAR IN REVIEW

  • Page 27
    ... 3.31 $ $ 2006 $ 12,314 2,171 79 52 14,616 9,016 3,336 12,352 2,264 781 1,483 2.99 2.95 $ $ 2005 $ 11,990 2,071 262 40 14,363 8,890 3,247 12,137 2,226 743 1,483 2.96 2.92 $ $ 2004 $ 11,302 1,...1,312 2,262 6,396 $ 45,058 33.45 23.10 30.12 ¥ 119.90 125.15 $ AFLAC INCORPORATED 2012 YEAR IN REVIEW 25

  • Page 28
    ...of Portfolio - Geographic Region (At Amortized Cost) 3.2% 2.8% .5% 4.8% 4.8% Japan Europe U.S. 20.1% 43.4% Asia, excl. Japan Americas, excl. U.S. Middle East & Africa 20.4% Australasia All Others Total Debt and Perpetual Securities - $112.1 Billion 26 AFLAC INCORPORATED 2012 YEAR IN REVIEW

  • Page 29
    ... ï¬,exibility, and diversification. This investment program was successful and enabled us to surpass our budgeted new money yield for 2012. In addition to achieving our objective of having our assets primarily denominated in yen, we employed a currency hedging strategy, which serves to ensure our...

  • Page 30
    INVESTOR FACTS AFLAC'S TOTAL RETURN TO SHAREHOLDERS In 2012, Aï¬,ac Incorporated marked the 30th consecutive year the company increased its annual dividend. Including reinvested cash dividends, Aï¬,ac's total return to shareholders increased 26.4% in 2012. Aï¬,ac's share price increased 22.8% from ...

  • Page 31
    ... OF TEN-YEAR CUMULATIVE TOTAL RETURN* $250 200 150 Among Aï¬,ac Incorporated, the S&P 500 Index and the S&P Life & Health Insurance Index Aflac Incorporated S&P 500 S&P Life & Health Insurance 100 0 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 *$100 invested on December...

  • Page 32
    ... 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. Paul S. Amos II, 37, president of Aï¬,ac and chief operating officer of Aï¬,ac U.S., joined Aï¬,ac in 2002 as state sales coordinator of Georgia-North...

  • Page 33
    ... a director-at-large for the Society for Human Resource Management (SHRM). Teresa L. White, 46, executive vice president; chief service officer, joined Aï¬,ac in 1998. She has served in various leadership roles within Administration and Sales Support leading to her promotion to chief administrative...

  • Page 34
    ... traditionally used in Japan providing cash to help fund higher education costs associated with a child entering high school and college in Japan DAYS - Aï¬,ac Japan's revised base cancer policy introduced in March 2011 that enhances outpatient and anticancer medication benefits Derisking - A form...

  • Page 35
    ...Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission. Contact Information Aï¬,ac Worldwide Headquarters 1932 Wynnton Rd. Columbus, GA 31999 Shareholders in the U.S. with questions about individual stock accounts Institutional investors...

  • Page 36
    aflac.com | 706.596.3264 or 800.235.2667 Aflac Incorporated | 1932 Wynnton Road Columbus, Georgia 31999