Aflac 2013 Annual Report Download - page 4

THE AFLAC WAY: PROTECTING OUR POLICYHOLDERS
As an insurance company, our product is intangible: We sell a promise to be there for our policyholders and
insureds when they need us most by paying claims fairly, promptly and directly to our policyholders and
claimants. Keeping that promise includes delivering a positive consumer experience and ensuring we live up to
the Aflac brand each and every day. It’s what we call The Aflac 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 cash flow for our insurance operations. Premiums are generated
from two sources: policy renewals, which represent the majority of premiums received; and new policies
issued. With these premium funds, we are able to offer services that deliver on our promise to policyholders,
including paying claims fairly and promptly, reserving for future claims, and enhancing customer service and
product development.
Income from Investments
We primarily invest for the long term, and the strong cash flows from our persistent book of business give us
the ability to continue to invest from this perspective. Our portfolio is diversified by industry and geography.
Earnings from our investments provide additional income that allows us to offer a strong value to policyholders
through lower premiums and better benefits. Historically, our product needs and liability profile have been key
drivers to our asset strategy. Matching policy liabilities by both duration and currency is a primary consider-
ation in managing our investment portfolio. At the same time, we are continuously focused on enhancing the
strength and stability of our balance sheet.
While an insurance company is in the business of managing risk and not avoiding risk, we strive to be good
stewards for those we insure. We take great care to thoroughly evaluate the risks of the investments we own
to ensure that the entire portfolio offers an appropriate balance of risk and return. Our investment objectives
are primarily driven by careful consideration of our liabilities and capital requirements. With these in mind, our
investment strategies are designed to achieve the highest attractive risk-adjusted returns with an eye toward
quality, diversification and liquidity. We continually evaluate investment opportunities around the world. The
vast majority of our strategy centers around purchasing fixed income assets, however, we also seek out
opportunities in multiple asset types for their diversification and long-term return potential. With respect to our
fixed income investments, we want to own assets where there is a high probability the issuer of the bond can
and will meet its obligations to us, both interest and return of principal at maturity.
PROTECTING OUR POLICYHOLDERS, THE AFLAC WAY
Since the founding of our company in 1955, we’ve put the customer first by reminding ourselves daily about the
promises we’ve made to those we insure. By doing so, we’ve gained the trust of more than 50 million people
worldwide who count on us to pay claims fairly and promptly when they need us most – The Aflac Way.
2 AFLAC INCORPORATED 2013 YEAR IN REVIEW