Aflac 2013 Annual Report Download - page 14

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THE IMPACT OF THE YEN/DOLLAR EXCHANGE RATE
Aflac Japan collects premiums in yen, pays benefits and expenses in yen, and
primarily holds yen-denominated assets to support yen-denominated liabilities.
With the exception of certain transactions that include the Aflac Japan dollar
investment program, we do not actually convert yen into dollars. Therefore,
currency changes do not have a material effect on Aflac in economic terms.
However, for financial reporting purposes, we translate Aflac Japan’s income
statement from yen into dollars using an average exchange rate, which does
influence our reported financial results in dollar terms. Translating Aflac Japan’s
results from yen into dollars means that growth rates are magnified in dollar terms
when the yen strengthens against the dollar, compared with the preceding year.
Conversely, growth rates in dollar terms are lower when the yen is weaker to the
dollar in comparison to the prior year. During 2013, the yen averaged 97.54 to
the dollar, or 18.2% weaker than the average of 79.81 yen to the dollar in 2012,
suppressing our reported results in dollar terms.
2013 FINANCIAL HIGHLIGHTS IN YEN
Premium income rose 6.8% to
¥1.46 trillion.
Total revenues rose 7.8% to
¥1.73 trillion.
Pretax operating earnings rose
13.6% to ¥353.9 billion.
2013 FINANCIAL HIGHLIGHTS IN DOLLARS
Premium income declined 12.7%
to $15.0 billion.
Total revenues declined 11.8%
to $17.7 billion.
Pretax operating earnings
declined 7.1% to $3.6 billion.
AFLAC JAPAN DISTRIBUTION CHANNELS
TRADITIONAL
SALES CHANNEL
• Aflac Japan recruited more than 1,600 new sales agencies in 2013.
• Aflac Japan was represented by approximately 15,900 sales agencies at the end of 2013, equating
to more than 126,500 licensed sales associates employed by those agencies.
STRATEGIC ALLIANCES
Dai-ichi Life
• Our alliance with Dai-ichi Life was first launched in 2001. In 2013, Dai-ichi Life sold more than
75,000 of our market-leading cancer policies.
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.
Japan Post
Group
• Aflac Japan and Japan Post Holdings signed a new alliance agreement in July 2013. By October 2013,
the number of postal outlets oering Aflac’s cancer products had gone from 1,000 to 1,500, and
Japan Post Holdings increased that number to nearly 3,000 in March 2014.
Daido Life
• In September 2013, Aflac Japan and Daido Life Insurance entered into an agreement for Daido
to sell Aflac’s cancer insurance products in the Hojinkai market.
Source: Bloomberg ©
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
90
100
80
70
110
120
¥130
YEN/DOLLAR EXCHANGE RATE
(Quarterly Closing Rates)
For 2013, the average
yen/dollar exchange rate
weakened 18.2% com-
pared with 2012, which
significantly suppressed
Aflac Japan’s growth rate
in dollar terms. The yen/
dollar exchange rate has
not changed this dramati-
cally since 1986.
12 AFLAC INCORPORATED 2013 YEAR IN REVIEW  AFLAC JAPAN