Aflac 2013 Annual Report Download

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2013 YEAR IN REVIEW
Spreading Our Wings

Table of contents

  • Page 1
    Spreading Our Wings 2013 YEAR IN REVIEW

  • Page 2
    ... GOAL: To provide customers with the best value in voluntary insurance products in Japan and the United States TABLE OF CONTENTS The Aflac Way: Protecting Our Policyholders 2 Message from Management 4 Aflac U .S 20 Selected Financial Data 28 Aflac Incorporated Investments 30 A Conversation...

  • Page 3
    ...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. *Source: Eastbridge Consulting Group, Inc. U.S. Worksite/Voluntary Sales Report. Carrier Results for 2012. Avon, CT: April 2013

  • Page 4
    ...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 source of...

  • Page 5
    ... EXPANDED DISTRIBUTION CHANNELS yields NEW ACCOUNTS AND CUSTOMERS PROTECTING AGAINST: AS S E T LOS S IN CO M E LOS S SUPPLEMENTAL MEDICAL EXPENSES REACHING CUSTOMERS AT: THE WORKSITE HOME RETAIL LOCATIONS INSURING: MORE THAN 50 MILLION PEOPLE AND GROWING AFLAC INCORPORATED 2013 YEAR IN REVIEW...

  • Page 6
    ...the long term, maintaining a sharp focus on our financial objectives, while simultaneously concentrating on enhancing customer service and building our book of business. Combined, we generated more than $2.9 billion in total new annualized premium sales in the United States and Japan in 2013. Total...

  • Page 7
    ... TO PROTECT 50 MILLION PEOPLE AND COUNTING The health care environment in both Japan and the United States is complex and evolving. Aï¬,ac provides employers and consumers with solutions to address the financial challenges related to health care, and we have the privilege and the responsibility...

  • Page 8
    ... lengthened our sales process as small businesses in particular are more hesitant to make changes to their health-care-related coverage. But amidst this uncertainty, one constant has been, and continues to be, the need for our products. There is no plan - not even the best major medical plan - that...

  • Page 9
    ...fies our top position in cancer insurance in Japan. In the United States, with respect to products, I believe there will be several factors converging that will emphasize the need for products we offer. As consumers gradually begin to see more commonality in Americans' insurance coverage, it will...

  • Page 10
    ...ac's premiums come from Japan, where the functional currency is the yen, the company believes it is important to understand the impact of translating yen into dollars. Aï¬,ac Japan's yen-denominated income statement is translated from yen into dollars using an average exchange rate for the reporting...

  • Page 11
    ...end of 2013. U.S. Japan 04 05 06 07 08 09 10 11 12 13 15.3 13.7 12.1 11.3 10.5 8.5 9.3 8.9 9.0 $13.8 BENEFITS AND CLAIMS (In billions) Aï¬,ac paid or provided for $13.8 billion in benefits for insureds in 2013. U.S. Japan 04 05 06 07 08 09 10 11 12 13 AFLAC INCORPORATED 2013 YEAR IN REVIEW 9

  • Page 12
    ... than ever before. Aï¬,ac Japan's sales objective was focused exclusively on cancer and medical policies that are more profitable and less interest-rate sensitive than life insurance or annuity products. For 2013, our target was to increase cancer and medical policy sales in the range of ï¬,at...

  • Page 13
    ... employee of Aflac Japan since 1985, Tadashi Kobayashi works in Aflac Japan's education department. In addition to being an Aflac employee, he is an Aflac claimant who takes pride in sharing the life-changing financial protection Aflac products can provide when a serious illness such as cancer grips...

  • Page 14
    ... 75,000 of our market-leading cancer policies. Dai-ichi Life STRATEGIC ALLIANCES Bank Channel • Aflac Japan was represented by 372 banks at the end of 2013, or more than 90% of the total number of banks in Japan. • Aflac Japan and Japan Post Holdings signed a new alliance agreement in July...

  • Page 15
    ...care costs have driven the majority of Japanese consumers to seek private insurance to help bear rising out-of-pocket expenses. Aï¬,ac's product line offers a means to fill that need by providing policies with benefits related to a significant health event. AFLAC INCORPORATED 2013 YEAR IN REVIEW...

  • Page 16
    ... emphasis on medical insurance. The team works closely together to support one another's busy work/life schedules that include juggling busy careers and family responsibilities. A consultative sales approach helps employees meet their customers' financial and insurance needs. Teamwork helps foster...

  • Page 17
    ...outlets offer insurance products of Aï¬,ac, a private insurer. In July 2013, Aï¬,ac Japan A day in the life of door-to-door sales employees at the Saitama Chuo Post Office includes making visits to consult with customers regarding financial and insurance products, including Aflac's cancer insurance...

  • Page 18
    ... Swan, promotes our revised New EVER medical plan introduced in August 2013. Black Swan, the arch-nemesis of the Aï¬,ac Duck, is determined to sway consumers to make unwise life decisions, including deciding against insurance. Fortunately, the Aï¬,ac Duck steps in to remind customers to make sound...

  • Page 19
    ... The Black Swan advertising campaign that promotes New EVER, Aflac Japan's medical plan, was introduced in August 2013. The commercials portray Black Swan as an ominous character that tries to convince people to make impulsive decisions in life, including forgoing voluntary insurance. Black Swan is...

  • Page 20
    ... Parents House locations - two in Tokyo and one in Osaka - have helped thousands of children battling health issues, as well as the families that support them. Dr. Yosuke Hosoya is a pediatric doctor at St. Luke's International Hospital in Japan. He is the first participant in a series of Japan...

  • Page 21
    ... and director of the Aflac Cancer and Blood Disorders Center of Children's Healthcare of Atlanta. The team at the Aflac Cancer Center is committed to providing a brighter future for children fighting cancer and blood disorders by continuing to deliver advanced medical treatment, family-centered care...

  • Page 22
    ... leading provider of voluntary insurance at the worksite in the United States - a position we've held for many years.* We strive to accomplish our vision by remaining true to our strategy for growth: expanding distribution channels and offering relevant products to reach more accounts and customers...

  • Page 23
    ... stay on top of bills and everyday needs by paying their claims fairly and promptly while also exhibiting exceptional customer service. About her experience with Aflac Elizabeth says, "Every time I call Aflac, I get a very nice person on the phone who helps me with every question; and I can hear the...

  • Page 24
    ... a lead specialist in Aflac's New Business Processing Department in Columbus, Georgia. Martina strives each day to ensure that what she does as an employee positively impacts our policyholders. Martina says, "I work for a great company, and a wonderful team. Each day we are committed to making sure...

  • Page 25
    ... MARKET SEGMENT PRODUCTS Career agents < 100 employees Individual Core insurance brokers (local and regional) Large insurance brokers (national) 100 - 1,000 employees Individual / Group (standardized) > 1,000 employees Group (customized) AFLAC INCORPORATED 2013 YEAR IN REVIEW - AFLAC...

  • Page 26
    ...new critical illness plan includes lump-sum benefits for cancer with an additional option for compatibility with health savings accounts. We are creating products that respond to, and anticipate, the needs of consumers and businesses, particularly in the current health care environment. With change...

  • Page 27
    ...76,300 licensed sales associates and brokers who sell our products. In 2013, we initiated a pilot for a proprietary exchange in three states as a means to help solidify our leading position with small businesses that are our core market and provide them with access to richer medical benefit options...

  • Page 28
    ...with a reputation for paying claims fairly and promptly. We believe Aï¬,ac's trusted market-leading brand position serves to broaden the appeal of our products to consumers throughout the United States. The Aï¬,ac Duck has been the protagonist in one of the most successful advertising campaigns ever...

  • Page 29
    ... for our policyholders when they need us most by paying claims fairly, promptly and directly to our claimants. *Source: Eastbridge Consulting Group, Inc. U.S. Worksite/Voluntary Sales Report. Carrier Results for 2012. Avon, CT: April 2013 AFLAC INCORPORATED 2013 YEAR IN REVIEW - AFLAC U.S. 27

  • Page 30
    ... 2010 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 2003 and 2004 have been adjusted for adoption of SFAS 123R on January 1, 2005. 28 AFLAC INCORPORATED 2013 YEAR IN REVIEW

  • Page 31
    ... 108.26 $ $ 44,050 6,914 $ 50,964 $ 39,240 2,187 1,409 1,480 6,648 $ 50,964 36.91 28.00 36.18 ¥ 107.13 115.95 $ AFLAC INCORPORATED 2013 YEAR IN REVIEW 29

  • Page 32
    ... cash ï¬,ows from our persistent book of business reinforce this long-term perspective. The percentage of the Company's total assets attributable to Aï¬,ac Japan was 85% at December 31, 2013. Our U.S. policy liabilities have a shorter duration than in Japan, and our investment approach is tailored...

  • Page 33
    ... corporate bonds in the Japan portfolio during the first half of 2013, providing us with more liquid securities and exposure to quality U.S. issuers. INVESTMENT OUTLOOK As we look ahead, we will continue to evaluate our investment strategies based on the market environment and capital needs, making...

  • Page 34
    ...on Investors to access the following: Your AFL shareholder account through aflinc® Aï¬,ac's financial information A calendar of events Dividend reinvestment plan (DRIP) information $1.42 1.34 1.23 1.12 1.14 .96 .80 ANNUAL CASH DIVIDENDS PAID PER SHARE Aï¬,ac has increased its annual dividend for...

  • Page 35
    ... 2009 2010 2011 2012 2013 *$100 invested on December 31, 2003, in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright © 2014 Standard & Poor's, a division of The McGraw-Hill Companies, Inc. All rights reserved. AFLAC INCORPORATED 2013 YEAR IN REVIEW 33

  • Page 36
    ... chief executive officer of Aï¬,ac Incorporated in 1990 and was named chairman in 2001. He has been a member of Aï¬,ac Incorporated's board since 1983. John Shelby Amos II, 61, Alabama/West Florida state sales coordinator for Aï¬,ac U.S., has served in a variety of sales positions with the company...

  • Page 37
    ... 2012, and was promoted to his current position in April 2013. He currently serves on the boards of the Georgia Chamber of Commerce, Children's Healthcare of Atlanta, and the Aï¬,ac Credit Union. Eric M. Kirsch, 53, executive vice president and global chief investment officer, joined Aï¬,ac in 2011...

  • Page 38
    ... Voluntary Supplemental Insurance - Benefits purchased by a consumer at the consumer's own expense in addition to a (typically employer-provided) major medical plan that cover out-of-pocket expenses not typically covered under the primary insurance policy 36 AFLAC INCORPORATED 2013 YEAR IN REVIEW

  • Page 39
    CONTACT INFORMATION Aflac Worldwide Headquarters 1932 Wynnton Rd. Columbus, GA 31999 Shareholders in the U.S. with questions about individual stock accounts Institutional investors with questions about the company tel: 706.323.3431 aflac.com tel: 706.596.3581 or 800.227.4756 Email: shareholder@...

  • Page 40
    ... Admired Companies are registered trademarks of Time Inc. and are used under license. From FORTUNE Magazine, March 17, 2014 ©2014 Time Inc. FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of, Licensee. Aflac Incorporated | 1932 Wynnton Road Columbus, Georgia...