Aflac 2012 Annual Report Download - page 9

03 04 05 06 07 08 09 10 11
12
Net Earnings Per Diluted Share
Operating Earnings Per Diluted Share*
1.78
2.15
2.56
2.93
3.29
3.76
4.59
5.31
$6.59
5.91
EARNINGS PER DILUTED SHARE
Net and operating earnings per diluted share benefited
from record operating results. In 2012, we achieved our
primary financial target, growth in operating earnings
per diluted share, excluding a $.01 per share benefit
from the impact of the yen.
Operating earnings is an internal financial measure
we use to assess management’s performance. Aflac
defines operating earnings as the profits derived
from operations before realized investment gains
and losses from securities transactions, impairments,
and derivative and hedging activities, as well as
nonrecurring items.
*Excludes impact of the yen
Q
How do you perpetuate the success you’ve seen
with the Aflac Duck, and what has the Aflac brand
meant to your company?
AProtecting the Aflac brand is one of my most
important jobs, because our brand is everything to us,
and it’s more than just our commercials. Our brand is our
people and our culture. It is who we are. On the advertising
side of the brand, with technology that allows consumers to
bypass commercials, I believe businesses just starting out
and trying to develop a new brand from scratch with the
name recognition like ours face huge challenges, including
tremendous costs.
Q
How do you see Aflac being affected by the
adoption of the Patient Protection and Affordable
Health Care Act (PPACA) in the United States?
A
I think the opportunities before us are huge, and
I don’t think you can underestimate the value of
our brand. Businesses and individuals will gain clarity on
healthcare options following the implementation of PPACA.
I believe part of that clarity will be a better understanding
for the added layer of insurance protection our products
provide. I further believe both businesses and consumers
will want to turn to a brand they know and trust, and Aflac
can certainly be that brand. With more competitors in the
business, our ability to be the low-cost producer will also be
a key to our success.
Along with these opportunities, there
will undoubtedly be challenges. The U.S. insurance market
is changing much more rapidly than any time since
I’ve been affiliated with Aflac. As such, the competitive
landscape is shifting as well. We’ve always known Aflac
products are an attractive segment of the market, and
others are figuring that out too. We are going to have
to remain vigilant and agile. Our biggest challenge is
adapting to PPACA and the evolving marketplace. We’ll
also need to remain mindful of how these changes affect
our business.
Q
How do you view Aflac’s competition in Japan and
the United States?
A
In Japan, Aflac has been the number one seller of
cancer insurance since Aflac Japan entered the
market in 1974 and the leading seller of medical insurance
since we introduced EVER, our base medical policy, in 2002.
Over the last several years, competition has intensified,
which I think has actually broadened the market and made
the universe of potential customers bigger. In 2012, Aflac
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 worksite, and I think
that speaks volumes too. While other companies are getting
into the voluntary space, I do want to point out one major
difference between Aflac and all the rest of the competing
U.S. companies: For Aflac, voluntary insurance sold at the
worksite represents virtually all of our focus, whereas our
competitors tend to offer voluntary products as a peripheral
line of business. We believe this discipline and focus gives us
an edge that has contributed to our market-leading position.
AFLAC INCORPORATED 2012 YEAR IN REVIEW 7