Aflac 2013 Annual Report Download - page 8

A CONVERSATION WITH AFLAC CHAIRMAN AND CEO DAN AMOS
of the Affordable Care Act (ACA), and
this has prompted some confusion
and negativity related to health care
coverage in general. We believe
this kind of ongoing uncertainty has
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 is designed to cover all
out-of-pocket expenses. We will
continue to drive home the need for our
products to businesses, and ultimately
their employees while supporting our
distribution network in this evolving
environment.
Q How do you view Aflac’s competition in
the United States and Japan?
A In the United States, we’ve competed
with numerous companies over the last
six decades, and I keep coming back to
one point: For Aflac, voluntary insurance
sold at the worksite represents our
primary focus, and our competitors
frequently offer voluntary products
as a peripheral line of business. Our
ability to streamline our focus toward
one insurance category has given us
an edge that has contributed to our
market-leading position.*
Similarly, in Japan, supplemental
insurance represents our primary focus,
and this discipline and concentration
has helped propel Aflac to our position
as the number one seller of cancer
and medical insurance in Japan. Over
the last several years, competition has
intensified, and I think this has actually
broadened not only the scope of our
market but also the number of potential
customers. But in 2013, Aflac Japan
remained the leading seller of cancer
and medical insurance policies in Japan,
and that says a lot about consumers’
preferences.
Q How do you perpetuate the success
you’ve seen with the Aflac Duck, and
what has the Aflac brand meant to
your company?
Q Following the financial crisis, how do
you feel about the financial strength
of Aflac?
A I think we’re stronger today financially
than we’ve ever been, and this strength
is reflected in our capital levels. Not only
did our 2013 RBC and SMR surpass
prior-year levels, but these capital ratios
also exceeded our annual objectives
and form the foundation upon which our
promise to policyholders rests.
Q What were your greatest challenges in 2013?
A In Japan, the ongoing low-interest-
rate environment continued to be
a challenge for us with respect to
investing large new money cash flows
generated by our insurance opera-
tions and investments at reasonable
returns. As we consider this challenge
and investments in general, we plan to
continue to progress as planned with
the buildout of Aflac’s Global Investment
Division through the end of 2014, which
encompasses a focus on all aspects of
the investment area, including people,
processes and technology.
In the United States, our ability
to adapt to change within the national
health care system has required
much of our focus. In terms of the U.S.
sales climate, we have seen multiple
postponements of the implementation
A If there’s one aspect of our business that
we should never underestimate, it’s the
value of the Aflac brand. We pioneered
supplemental/voluntary insurance in
both the United States and Japan and
have been building a strong brand ever
since, most notably since the Aflac Duck
came on the scene in 2000. Our brand
is one of our most valuable assets
because it represents who we are – our
people, our culture, and the Aflac
Duck. A strong brand is more valuable
than ever, because consumers today
think more in terms of brands, not just
general products. As more products
and services flood the market, people
don’t always have time to analyze the
merits of individual products, so they
often look to the market leader. Aflac
is the market leader,* and I believe our
strong brand is, and will continue to be,
a vital component of our success.
Q As CEO, what do you see as your most
important role?
A My most important role is to create and
maintain Aflac’s financial strength, which
ultimately protects our policyholders
and enhances shareholder value. I also
work hard to set a vision for where we
want to go as a company and then
establish strategies to get there, while
monitoring our progress along the way.
6 AFLAC INCORPORATED 2013 YEAR IN REVIEW