Aflac Annual Report 2005

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How have you maintained your position as a market leader in Japan's increasingly competitive environment?

Answer We believe that our advertising efforts have paid off and Aflac is the most preferred provider of medical, cancer and life insurance in Japan. Our position as the market leader is important to Japanese consumers, many of whom select the number one brand when making a purchase. We've maintained our edge by offering the best products at the best price while paying our agents the best commissions. We can do that because we are positioned as the low-cost producer in Japan's insurance market. Even though other companies have started to recognize the opportunities in Japan that we've realized for decades, we believe our products stand out as a tremendous value to consumers.

How do you view Aflac's role in the community?

Answer I cannot think of any partnerships I treasure more than those with the Aflac Cancer Center in Atlanta and the Aflac Parents House in Japan. For me, my involvement, and Aflac's as a whole, brings new meaning and depth to each and every day. When I think of children battling cancer, their parents, and their physicians, I can't help but think of them as heroes. It's wonderful to know that from 1965 to 2000 the overall cure rate for childhood cancer has risen from 20% to 75%. But improvements in survival rates don't just happen. Results like this take care, research, and resources from many organizations and individuals. We have made it our priority to support efforts to achieve an even greater cure rate while also helping families cope.

What opportunities does an improving Japanese economy bring to Aflac?

Answer We have never noticed a significant correlation between the effects of a weak or strong economy on sales — we just haven't. But we do know the weak economy has been accompanied by very low interest rates over the last several years. If an improving economy brings higher interest rates, that would certainly have a beneficial impact on the returns for new investments we make. Also, an economy on the upswing might mean an expanded job market, which would give us access to more consumers at the worksite.

How does Aflac continue to stay relevant to consumers in a continually changing market environment?

Answer We maintain our leading market position by staying focused on benefits consumers want and need. And we always try to stay on the cutting edge of innovations that can make our existing products better and give consumers more reasons to become our customers. As we've watched copayments and deductibles increase in both of our markets, we've seen the need for our products grow more than ever, and I believe that will continue.