Aflac 2013 Annual Report Download - page 9

04 05 06 07 08 09 10 11 12
13
Net Earnings Per Diluted Share
Operating Earnings Per Diluted Share*
6.59
2.15
2.56
2.93
3.29
3.76
4.59
5.31
$6.94
5.91
EARNINGS PER DILUTED SHARE
Net and operating earnings per diluted share benefited
from solid operating results. In 2013, we achieved our
primary financial target of growth in operating earnings
per diluted share, excluding the impact of the yen.
Operating earnings per diluted share is an internal
financial measure we use to assess management’s
performance. Aflac defines operating earnings as
the profits derived from operations before realized
investment gains and losses from securities
transactions, impairments, and derivative and hedging
activities, as well as other and nonrecurring items.
*Excludes impact of the yen
As we navigate through any challenges
that might surface, my job is to keep
the company on track and progressing
toward our objectives.
Q How do your products and distribution
systems set you apart in Japan and the
United States?
A In both Japan and the United States,
we want to sell our products where
consumers want to buy them. We’ve
excelled at expanding distribution in
both countries, and this is a reflection
of our relevant products, strong brand,
and effective customer service. In
Japan, with respect to products, all
citizens are covered by a comprehensive,
nationally sponsored health insurance
program. When we entered that market,
consumers were not responsible for
any copayments. Today, consumers in
Japan face a 30% copayment. With such
a financial burden, Japanese consumers
easily understand the value of the types
of products Aflac sells. In fact, I think you
could argue that Japan’s national health
care system has elevated our products
to top-of-mind status. With respect to
distribution in Japan, corporate agencies
and individual sales agents are still very
important to us. At the same time, I
think our ability to leverage and support
additional distribution channels has
been very beneficial to our business
because these strategic alliances have
broadened our opportunities to allow
us to reach different segments of the
population we might not be able to
reach otherwise. We launched our first
strategic alliance in 2001 with Dai-ichi
Life, followed by the bank channel and
more recently, Japan Post Holdings and
Daido Life. Gradually, through our Japan
Post partnership, our cancer insurance
will be available at 20,000 Japan Post
locations across Japan, which will be
very beneficial in the long run. For this
reason, I have referred to our expanded
partnership with Japan Post as a
“game changer,” because I see it as an
agreement that further solidifies 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 become clearer where
people need more coverage, and it is
possible that out-of-pocket expenses
could be much higher than they are
now. In terms of distribution, we are
supporting our multi-faceted distribution
network in reaching out to businesses
of all sizes. With respect to our career
agents, we are working on several
initiatives including the piloting of Aflac’s
proprietary exchange, which is geared
to employers with less than 100 workers.
Additionally, we are continuing to work
with brokers on a regional and national
level to give us better access to the mid-
and large-case market. We continue
to seek opportunities to leverage our
strong brand and relevant product
portfolio in the evolving health care
environment.
*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 7