Aflac 2012 Annual Report Download - page 7

when they need us most by paying claims promptly. We continue
to review our investments to ensure that they best represent the
interests of our policyholders and all of our stakeholders.
As we evaluate investment opportunities, it is a challenge to
invest large cash flows in a low-interest-rate environment. For
example, in Japan alone, we invested, on average, $77 million each
business day in 2012. In particular, our history of generating very
strong cash flows was magnified in 2012 due to tremendously
strong sales of WAYS, our hybrid whole-life product in Japan. We
primarily invest for the long term, and the strong cash flows from
our persistent book of business give us the ability to continue to
invest from this perspective. Clearly, the world, and particularly
Europe, presents a very dynamic macro-environment, and we
expect continued volatility in the future. To effectively respond to
this environment, we have embarked on a global transformation of
our investment function. We’ve also adapted over the last several
years through reducing our exposure to financial holdings and
investments in Europe. Additionally, in the second half of 2012, we
began employing a U.S. corporate bond program for Aflac Japan’s
portfolio. This program has been 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 in 2012. I believe the enhancements we’re
making to our investment team, processes and infrastructure will
better position us to invest our sizeable cash flows at more attractive
returns through a more diversified and high-quality portfolio.
CONTINUED GROWTH AND MORE PROMISES TO KEEP
While we are proud of our past accomplishments, we are equally
excited about Aflac’s future. With our firm commitment to
continually evaluate our strengths and weaknesses, and to make
quick and appropriate changes when necessary, I am convinced
that the U.S. and Japanese markets are excellent platforms for
future growth.
At Aflac, we do not just sell voluntary supplemental insurance
products. We sell a promise to be there for our policyholders in
their time of need – a promise we don’t take lightly. Tens of millions
of consumers have placed their trust in us. They expect us to
manage our business in such a way that we will deliver exceptional
service and always fulfill our obligations, and we are privileged to
have the opportunity to deliver on their expectations.
Ever since our company was founded nearly six decades ago, we
put the customer first by reminding ourselves each day about the
promises we make to the people who rely on us – and positioning
our business to fulfill those promises.
I want to personally thank you, our shareholders, for supporting
Aflac and helping establish and maintain a strong foundation for
our company.
Daniel P. Amos
Chairman and
Chief Executive Officer
“We sell a promise to be there
for our policyholders in their
time of need – a promise we
don’t take lightly.”
AFLAC INCORPORATED 2012 YEAR IN REVIEW 5