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AFLAC U.S. - Extending Momentum

We knew a year ago that it would be challenging to match our 1999 performance in the United States. But we entered the year with momentum. We also had an expanding product line, a growing distribution system, and a new advertising campaign featuring the now famous AFLAC duck. Those strengths proved to be a formidable combination. We didn't just maintain our momentum in 2000 - we improved on it.

New annualized premium sales significantly exceeded our objectives and we again set records. In fact, our U.S. sales have more than doubled during the last four years. Many products contributed to the record year. Accident/disability was again our best-selling product for the seventh consecutive year. We also reached a milestone at mid-year when accident/disability became our number one product category in terms of premiums in force. And for the first time in our history, we began offering dental insurance. This new plan, which was designed for employees at small businesses, has proven to be very popular. By the end of 2000, the dental plan had become the best new-product introduction in our history, even though it was only available for the last five months of the year.

We also experienced continued rapid growth of our U.S. sales force. Our recruiting was very strong during the year, which was an impressive accomplishment considering the tight U.S. labor market. More importantly, we dramatically increased the average number of producing sales associates. Our successful advertising campaign is one of the reasons for the significant growth of our sales force. The AFLAC duck ads, which made their debut at the start of 2000, have proven to be highly effective and very popular. AFLAC's advertising was recognized throughout the year by various news outlets, including The Wall Street Journal and USA Today, both of which identified our commercials as among the best for the year.

We also continued to strive for added efficiency through the use of technology. SmartApp remains our most visible technological success. During 2000, we processed more applications on SmartApp than ever before. We electronically processed approximately 78% of our new payroll sales during the year, with nearly 47% of those never requiring human intervention. We also began testing a new Internet billing system, which allows our payroll accounts to update information on their billing records and transmit the changes to us. Although we have no plans to sell insurance over the Internet in the United States, aflac.com has proven to be an increasingly effective means for supporting the efforts of our sales force and providing information to our customers.

Outlook - Committed to Completing our Customers' Protection

For AFLAC, 2000 was a year of accomplishment. All of our employees, sales associates and owners can be very proud of our achievements. We again achieved the sales and financial targets we had established for the year. We also continued to improve our business platform for future expansion and success. From an operational standpoint, AFLAC is performing better than at any time in its history. And financially, we are stronger than ever. As we look ahead, we believe the two large markets we serve will support our targets for future growth. Indeed, our objective is to increase earnings per share 15% to 17% in both 2001 and 2002, before the impact of currency translation. In 2001 we expect to perform at the high end of the range.

We are also pleased that our shares performed extremely well in 2000, outpacing the returns provided by the broader market. Yet our financial results and returns to shareholders require proper perspective. Our success would not have been possible had we ignored the needs of our most important constituency - our customers. Above everything else, our greatest obligation is to our policyholders. We will continue to ensure that AFLAC provides the best supplemental insurance coverage at the best price. And when policyholders file claims, we honor our commitment by paying their benefits fairly and quickly. Without our customers, there is no AFLAC. And always focusing on the needs of our customers is why without AFLAC, no insurance is complete.

Daniel P. Amos
President and Chief Executive Officer

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