AFLAC INCORPORATED
Annual Report for 2001
Financial Highlights
Message from Management
AFLAC Japan
Management's Discussion & Analysis
Glossary & Investor Information
AFLAC's Mission
Interview with CEO
AFLAC U.S.
Financials & Footnotes
Board & Management
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    AFLAC Japan:page 4 of 4
  
 

Conservative Portfolio Provides Solid Investment Returns

       AFLAC Japan is not just known for its operational efficiency. We are also recognized as one of Japan's safest insurers, which is due in great part to our conservative investment portfolio. In fact, in the December 18, 2001, edition of The Weekly Economist, a leading Japanese business publication, AFLAC was number one in its list of Japan's most reliable insurers. In addition, according to FSA data as of March 31, 2001, our investment yield was higher than any other life insurer in Japan with assets of more than ¥2 trillion.

       We are not significant investors in the investment real estate and equity sectors. Instead, we concentrate on buying long-dated, investment-grade securities. These types of investments allow us to better match asset and liability durations and to increase investment income at a strong and steady rate. We believe our conservative investment orientation has benefited our customers and shareholders during Japan's extended economic downturn.

   Photo of Ryuji Shishikura
Ryuji Shishijura, at right, owner of Shishikura construction company in Tokyo, talks to his nephew and co-worker, Koichi Shshikura, about the river construction project his company is handling. All 15 employees of Shishikura Construction are AFLAC policyholders. There are more than 40 million employees at small businesses throughout Japan who could benefit from AFLAC products.		  


 

Targeting Renewed Sales Growth in 2002

       Although its economic outlook remains uncertain, Japan is the second largest insurance market in the world and one we believe is perfectly suited to the products we sell. And while we found our sales results to be disappointing in 2001, we believe we can improve on them in 2002 and beyond. AFLAC's product line, distribution system, operating efficiency, and strong financial position are key competitive advantages that should continue to serve us well.

       In Japan, there are more than 51 million workers at businesses with fewer than 300 employees. Our penetration in this market, however, is only about 16%. To tap into that potential and extend our leadership position in the Japanese market, we will:

  • Expand our product line. We will continue to develop new products and modify existing policies to meet the changing needs of Japanese consumers.

  • Grow our sales force. We will continue to recruit more sales agencies, especially to penetrate the small-business and individual markets.

  • Improve operational efficiency. We will continue to invest in new technologies and work processes to extend our cost advantages.

  • Emphasize our financial strength. We will continue to promote our financial strength and the reliability of our brand to consumers and potential agencies.
   Photo of Katsuji Kamei
AFLAC policyholder Katsuji Kamei talks with AFLAC sales agent Reiko Fujiwara and agency employees Shoko Yoshida (left) and Tomoko Shibata in Ms. Fujiwara's office in Tokyo. Mr. Kamei, who has had an AFLAC cancer policy since the mid-1980s, said the policy helped him cope with his medical expenses after he was diagnosed with lung cancer in 1998. AFLAC sold more than 825,000 cancer life policies in Japan during 2001, making it AFLAC Japan's top-selling product.		  
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