Aflac 2012 Annual Report Download - page 8

Q&A A CONVERSATION WITH CHAIRMAN AND CEO DAN AMOS
Q
What were your greatest challenges
in 2012?
A
My greatest challenge as CEO in 2012 was overseeing
the buildout of Aflac’s Global Investment Division. It
has been a significant transformation because it included
the setup of a New York office, staffing and investing funds
in a new manner with foreign currency hedges. We still
have work to do, but I am very happy with the team we
have in place. I’m also pleased with our investment team’s
success in 2012 at improving the risk profile of our balance
sheet and enhancing returns, both of which better position
us to meet the needs of our policyholders and shareholders.
Q
What do you think is your greatest challenge
over the next couple of years?
AI think it will continue to be challenging to invest
the enormous new money cash flows generated by
our insurance operations and investments at reasonable
returns. We are also continually striving to balance growth
in our dividend and share repurchase programs while also
maintaining a strong capital base. Our goal is to deliver our
promise to all of our stakeholders, including policyholders
and shareholders.
Q
How do you foresee the success of your
business units?
AWhen you look at it in that context, I’m pleased with
our two insurance segments and our investment
division. In Japan we face difficult comparisons to last
year’s incredible results. While we expect 2013 sales of
our pillar third sector cancer and medical products to be
up, we anticipate overall sales to be down significantly in
2013. This is largely due to the difficult 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. But I’d point
out that our model is sound, our margins are stable and
most importantly, the business we write is profitable. When
I think about the United States, the economy remains
somewhat of a drag on growth in our core market, but
we are well-positioned with powerful distribution, a very
strong brand and attractive products. And as I noted, our
investment division is doing a very good job at enhancing
our returns and balancing that against risk.
Q
As CEO, what do you see as your most
important role?
A
My number one responsibility as CEO is to create and
maintain Aflac’s financial strength, which ultimately
protects our policyholders and enhances shareholder value.
Years ago, our financial strength seemed to be a given,
but in today’s world, the environment can change rapidly.
It’s more important than ever to ensure our investment
portfolio is diversified, and we’ve made excellent progress
in that regard. I have the right people in the right places,
and largely because of the way we manage the company,
Aflac has maintained strong capital levels. While focusing
on financial strength, we must maintain that strength while
pursuing growth of our business.
Q
Having achieved long-term success,
how do you continue to foster growth?
A
In 2012, we achieved another year in which we
delivered on our financial growth objectives, and
we will continue to focus on our core fundamentals. At
any given time, one aspect of the business may be a little
stronger, and one might prove a little more challenging. But
in managing the business from a long-term perspective, we
understand that these challenges are inherent in business
cycles. In recent years, our company has naturally become
more of a total return company. Going forward, I believe
our shareholders will benefit from consistent growth
in operating earnings per share, which we will enhance
through share repurchase, and dividend increases.
6 AFLAC INCORPORATED 2012 YEAR IN REVIEW