Although recruitment of new sales associates declined 2.9% in 2004, we were encouraged with solid new agent growth toward the end of the year. Recruitment rose 5.9% in the fourth quarter of 2004, which was the largest increase we had experienced since the fourth quarter of 2002. We expect further improvement in 2005 as sales coordinators become better adjusted to the responsibilities of their new positions.

Along with strengthening our infrastructure, we have made strides in improving sales associate and coordinator training. One training initiative, Aflac University^SM, offers more than 100 courses to associates on everything from products, sales tools, and technology to career and personal development. It also features a section that caters to the needs of sales management called the School of Leadership. We believe that Aflac University will become increasingly popular with our agents and help them develop more rewarding careers with our company.

We will also be rolling out new training and leadership programs for coordinators this year, including the Coordinator in Training (CIT) program. As a CIT, an associate is given the opportunity to carry out management responsibilities before officially being promoted to a district sales coordinator (DSC). If it turns out that the CIT is not suited for management or simply needs more time before becoming a DSC, he or she can simply remain at the associate level. By providing a program that bridges the gap between the associate and DSC level, we believe it is more likely that they will remain with Aflac as a producer if management is not in their career path.

LEASE, which is an acronym for Larger Earnings by Acquiring Smaller Employers, is a field-training program that was designed to get new sales associates off to a quick start. It focuses their efforts on selling to employees at smaller payroll accounts that often do not have rich benefit packages for their employees. We believe LEASE will help increase the likelihood of early success for new associates and lay the foundation for associates to have long, productive careers with Aflac.

Moving from Awareness to Definition

2004 was yet another prolific year for Aflac commercials. In January, we launched "Looney Tunes," Aflac's first-ever animated commercial. It featured recognizable characters, including Bugs Bunny and the Aflac Duck in the familiar settings from previous Aflac commercials and backdrops from familiar Looney Tunes cartoons. In late February, we launched "Film Noir," a black-and-white vintage-style commercial that achieved Aflac's second-highest brand recall score. And in November, Aflac announced its partnership with Paramount Studios and its holiday blockbuster release, Lemony Snicket's A Series of Unfortunate Events. This type of partnership was a first not only for Aflac, but also for the entire insurance industry.

Due primarily to the success of the Aflac Duck commercials, we now have name awareness of nearly 90% in the United States, which puts us on par with some of the best-branded companies in the country. But name awareness alone is not enough. By clearly defining and communicating what the Aflac brand stands for, research suggests that the relevancy of Aflac will increase significantly. In order to drive Aflac sales, consumers must recognize how our products can benefit their lives every day. In 2004 we defined a powerful vision that will direct our branding efforts: We're the company that offers control and financial security in times when they are needed most. The speed of life can be rapid or slow — but when that "now" moment arises, we'll be there, just as we promised. Unlike some companies who talk only about tomorrow, Aflac is focused on the immediate needs of our consumers.