Aflac 2013 Annual Report Download - page 15

Japan has contended with rising health care costs, an aging population and
declining birthrate for many years. While their citizens are covered by a national
health care insurance system that provides some level of insurance for its citizens,
it is not designed to cover all of its citizens’ medical related expenses. Over the
last three decades, more out-of-pocket health care expenses have been shifted
to Japanese consumers. When Aflac entered Japan in 1974, most citizens paid
no copayments. Now, most consumers pay 30% of all medical costs covered
by Japan’s national health care system. On top of that, there are additional costs
consumers bear, including upgrading to a private hospital room from one with
multiple patients. Rising health care costs have driven the majority of Japanese
consumers to seek private insurance to help bear rising out-of-pocket expenses.
Aflac’s product line offers a means to fill that need by providing policies with
benefits related to a significant health event.
AFLAC JAPAN PRODUCTS
FIRST SECTOR PRODUCTS THIRD SECTOR PRODUCTS
Life insurance products, including:
Life
• Term
• Whole
• Hybrid (WAYS)
Child Endowment
Fixed Annuity
Supplemental insurance products, including:
Cancer
Medical
Aflac has been selling first sector life products with smaller face
amounts since 1996. Starting in December 2007, banks were
permitted to sell the traditional health-related products that Aflac
oers to its customers, and the bank channel quickly became a
larger contributor to sales.
WAYS
In 2006, WAYS was introduced, and banks started selling this
unique hybrid whole-life product in 2008. WAYS can be converted
to a fixed annuity, medical coverage or nursing care benefits when
the policyholder reaches a predetermined age.
Child Endowment
In 2009, Aflac introduced a competitive child endowment product
traditionally used in Japan that pays a lump-sum benefit at the
time of a child’s entry into high school and an educational annuity
for each of the four years of college.
Fixed Annuity
In 1999, Aflac introduced a fixed annuity product to enhance our
product portfolio.
The foundation of our product portfolio has been, and
continues to be, supplemental health products like cancer
and medical insurance.
Cancer Insurance
In 1974, Aflac pioneered the cancer product in Japan, and we remain
the number one provider of cancer insurance today. In 2011, Aflac
Japan introduced DAYS, a revised base cancer policy that enhances
outpatient and anticancer medication benefits.
Medical Insurance
In early 2002, we first introduced EVER, a stand-alone, whole-life
medical product, as a solution to help Japanese citizens with rising
copayments related to Japan’s universal health care coverage. Within
one year of the introduction of EVER, Aflac became the leading seller
of medical insurance in Japan.
PRODUCTS: IN STEP WITH CONSUMERS’ NEEDS
Aflac develops relevant products and sells them through expanding distribution
channels, yielding new customers. The foundation of our product portfolio has
been, and continues to be, supplemental health products like cancer and medical
insurance that fall in Japan’s third sector insurance category. Additionally, Aflac
sells various life products that fall in Japan’s first sector insurance category. Over
the years, we’ve customized our products to respond to, and even anticipate, the
needs of our consumers and the advances in medical treatments. By remaining
focused and disciplined with this strategy, we gained greater access to potential
customers in 2013.
AFLAC INCORPORATED 2013 YEAR IN REVIEW – AFLAC JAPAN 13