Aflac 2014 Annual Report Download

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40 YEARS IN JAPAN
2014 YEAR IN REVIEW

Table of contents

  • Page 1
    2014 YEAR IN REVIEW 40 YEARS IN JAPAN

  • Page 2
    AFLAC'S GOAL: To provide customers with the best value in voluntary insurance products in Japan and the United States ON THE COVER: LIVING THE LEGACY Yuta Ietsuka was diagnosed with cancer 10 years ago when he was 16. Living in a smaller town three hours from Tokyo meant he would be away from home ...

  • Page 3
    ... Aï¬,ac's success, he has also benefited, and continues to benefit, Aï¬,ac's shareholders, employees, sales associates, brokers who sell our products as well as the more than 50 million people we insure worldwide who count on Aï¬,ac to help provide financial protection. He cared for everyone...

  • Page 4
    ...of Directors and Executive Management ...34 Glossary of Selected Terms ...36 *Source: Eastbridge Consulting Group, Inc. U.S. Worksite/Voluntary Sales Report. Carrier Results for 2013. Avon, CT: April 2014 **Based on the 2013 number of households published by Japan's Ministry of Internal Affairs and...

  • Page 5
    OUR STRATEGY FOR GROWTH RELEVANT PRODUCTS sold through EXPANDED DISTRIBUTION CHANNELS yields NEW ACCOUNTS AND CUSTOMERS PROTECTING AGAINST: AS S E T LOS S IN COME LOS S OUT-OF-POCKET MEDICAL EXPENSES REACHING CUSTOMERS AT: THE WORKSITE HOME RETAIL LOCATIONS INSURING: MORE THAN 50 MILLION ...

  • Page 6
    ...the story of Aï¬,ac reï¬,ected in our company's focus on ethics and customer service as well as our belief that our products help people in their time of need. The Aï¬,ac Way embodies our drive to uphold the commitments we make to our policyholders, customers, fellow employees and shareholders. When...

  • Page 7
    With our ability to create products and expand distribution, we look and Japan combined, we generated more than $2.5 billion in total new annualized premium sales in 2014. We also take pride in generating an industry-leading operating return on equity, or ROE. Excluding the yen impact, our operating...

  • Page 8
    ... behind the fact that with One Day Pay, no one processes and pays claims faster than Aï¬,ac. Just like in the U.S., Aï¬,ac Japan focuses on providing valuable products as well as timely, accurate claims payments. Aï¬,ac Japan is the leading provider of medical and cancer insurance and insures one in...

  • Page 9
    ...everyone embraces and understands. Obviously, carrying out a successful vision is not a job for one person. So I work hard to put the right people in the right positions to accomplish the right tasks, and then I work to align our sales channels and corporate employees to bring our vision to life. 7

  • Page 10
    ... way to evaluate our financial performance. Operating earnings for the full year of 2014 were $4.3 billion. Excluding the impact from the weaker yen, operating earnings were $4.4 billion. Average Yen/Dollar Exchange Rates ¥130 120 110 100 90 80 70 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014...

  • Page 11
    ... of December 2014 were $119.8 billion. Excluding the negative impact from the yen at year end, total assets were $130.5 billion. Year-End Yen/Dollar Exchange Rates ¥130 120 110 100 90 80 70 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 YEN WEAKENING YEN STRENGTHENING Source: Bloomberg © 9

  • Page 12
    ... he was a group leader in Aflac's Claims department, where he led a staff of 20 employees whose job is to deliver on Aflac's promise by paying claims promptly and accurately. Last year, he was selected by Aflac to participate in Aflac's study program where he attends the postgraduate school of Japan...

  • Page 13
    AFLAC JAPAN LIVING THE LEGACY 11

  • Page 14
    ... the leading provider of medical and cancer insurance in Japan. Today, we insure one in four Japanese households. In 2014, Aï¬,ac Japan's sales objective focused on the sale of cancer and medical products. These policies are more profitable and less interest-rate sensitive than life insurance or...

  • Page 15
    ... Japan to distribute Aï¬,ac Japan's cancer insurance products at all of Kampo's 79 sales offices they directly manage. Aï¬,ac Japan and Japan Post will continue to provide training and support that not only ensures the success of our alliance, but more importantly, the best experience for customers...

  • Page 16
    ...products and insurance products such as Aflac's cancer policy. Naoki Hasumura, manager at the Kanazawa Minami Post Office, has been working for post offices for 25 years. He is in charge of the savings and insurance business at the post office. He receives requests each day for advice from customers...

  • Page 17
    ... to sell Aflac's cancer insurance products specifically to the Hojinkai market, which is an association of small businesses. STRATEGIC ALLIANCES Japan Post Group Daido Life Hokuyo Bank Since December 2007, Japan's bank channel has been allowed to sell third sector products to their customers...

  • Page 18
    ...Takeda Life opened its service shop in Nagoya, Japan, and they now sell other Aflac products as well, including medical and life insurance. Takeda Life is a success story that demonstrates how businesses can survive - and even thrive - by helping to provide financial protection in the face of cancer...

  • Page 19
    ... that Aflac offers 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...

  • Page 20
    ...ac Duck to market specific products and help drive sales. Most recently, we introduced an advertising campaign in Japan featuring a new character called "Hajimete," or "Pioneer," Duck to promote New Cancer DAYS, our most recent product offering. This character was developed to remind customers that...

  • Page 21
    ... 2014 to promote our new cancer product and remind consumers that Aflac is the pioneer of cancer insurance in Japan. Black Swan, the archrival of the Aflac Duck, was introduced in 2013 as part of our campaign to promote our revised EVER medical product. Maneki Neko Duck is a combination "cat duck...

  • Page 22
    ... generous donations from Aflac Japan's sales agents, employees and officers, three Parents House locations - two in Tokyo and one in Osaka - Aflac Japan is living the legacy of helping thousands of children and adolescents battling health issues, while also supporting the families that love them...

  • Page 23
    ... costs related to the increasing health care burden. Aï¬,ac Japan will be there to provide relevant solutions that can help. As we look to the future, we believe Aï¬,ac products will continue to provide valuable insurance options for consumers. As we plan upcoming product and distribution activities...

  • Page 24
    ... the opportunity to build a preeminent childhood cancer and blood disorders center so that no family would have to travel across the country to save their child's life. The original gift was $3 million to name the Aflac Cancer Center in 1995. Due to the generosity of the Aflac Field Force, the Aflac...

  • Page 25
    AFLAC U.S. LIVING THE LEGACY 23

  • Page 26
    ...Worksite/Voluntary Sales Report. Carrier Results for 2013. Avon, CT: April 2014 AFLAC U.S. PRODUCTS INCOME-LOSS PROTECTION ASSET-LOSS PROTECTION SUPPLEMENTAL MEDICAL Short-Term Disability Life (term, whole) Accident Cancer Critical Illness Hospital Indemnity Dental Vision Note: Cancer, Hospital...

  • Page 27
    ..., cost-effective products to employees at businesses of all sizes. In 2014, we sought creative solutions to the challenges consumers face by introducing revised policies on both an individual and group basis. Among these, we introduced a revised critical care and protection plan, a new guaranteed...

  • Page 28
    ...our distribution opportunities and provide more product solutions to help consumers dealing with a major health event. Owning Our Customer Experience by Leveraging the Aflac Brand We've established a strong brand that is tremendously popular with consumers, along with a reputation for paying claims...

  • Page 29
    AFLAC U.S. AFLAC U.S. DISTRIBUTION DISTRIBUTION CHANNEL EMPLOYEE MARKET SEGMENT PRODUCTS ENROLLMENT CONDITIONS Career Agent < 100 Individual Face to Face Self-Service 100 - 1,000 Broker > 1,000 Individual Group Agent Assisted Self-Service Call Center Custom Group Aflac Cancer and Blood ...

  • Page 30
    ...well is help Aflac pay claims quickly so policyholders can focus on recovering from injury or illness without worrying about their finances. The Aï¬,ac Duck has been the protagonist in one of the most successful advertising campaigns ever. Since the Aï¬,ac Duck first appeared on the scene 15 years...

  • Page 31
    ...for growth. As businesses and consumers look for solutions to the challenging health care market in the United States, we believe the type of products we sell will continue to grow. We are confident that our leading brand, vast array of products and expanding distribution system will position us as...

  • Page 32
    ...' equity Supplemental Data Stock price range: Yen/dollar exchange rate at year-end (yen) Weighted-average yen/dollar exchange rate (yen) High Low Close 2014 $ 19,072 3,319 215 122 22,728 12,937 5,300 18,237 4,491 1,540 $ $ 2,951 6.54 6.50 $ $ 2013 $ 20,135 3,293 399 112 23,939 13,813 5,310...

  • Page 33
    Aï¬,ac Incorporated and Subsidiaries 2010 $ 18,073 3,007 (422) 74 20,732 12,106 5,065 17,171 3,561 1,233 $ $ 2,328 4.96 4.92 $ $ 2009 $ 16,621 2,765 (1,212) 80 18,254 11,308 4,711 16,019 2,235 738 1,497 3.21 3.19 $ $ 2008 $ 14,947 2,578 (1,007) 36 16,554 10,499 4,141 14,640 1,914 660 1,254 2.65 2.62...

  • Page 34
    ... Investors Service ...Aa3 A.M. Best ...A+ (Superior) Rating & Investment Information Inc. (R&I) ...AA*Ratings as of 3/1/15 Visit aï¬,ac.com and click on Investors to access: Your AFL shareholder account through aflinc® Aï¬,ac's financial information A calendar of events Dividend reinvestment plan...

  • Page 35
    ... S&P Life & Health Insurance 100 0 50 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *$100 invested on December 31, 2004, in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright © 2015 Standard & Poor's, a division of The McGraw-Hill Companies...

  • Page 36
    ..., joined Aï¬,ac in 2002 as state sales coordinator of Georgia-North Territory. He was promoted to executive vice president in 2005 and assumed additional responsibilities as chief operating officer of Aï¬,ac U.S. in 2006. He was promoted to president of Aï¬,ac in 2007. In 2013, he assumed reporting...

  • Page 37
    ... and Sales Support leading to her current position in September 2014 where she is responsible for driving seamless strategy and execution across Aï¬,ac's U.S. operations, including oversight and support of the company's extensive insurance distribution network of individual agents and brokers across...

  • Page 38
    ...) and is used for all life insurance companies in Japan to measure the adequacy of the company's ability to pay policyholder claims in the event actual risks exceed expected levels Individual Insurance - Insurance issued to an individual with the policy designed to cover that person and his or her...

  • Page 39
    ...Looking Information" in Aflac's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission. © 2015 Aï¬,ac Incorporated. All rights reserved. Aï¬,ac ® is a registered trademark of American Family Life Assurance Company of Columbus. One Day Pay...

  • Page 40
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