Annual Report for 2004 Aflac
Financial Highlights
Our Mission and Philosophy
Cover Story
Composition of Aflac's Market in Japan and the United States
Message from Management
Q & A with the CEO
Aflac Japan
Aflac U.S.
Selected Financial Data
Management's Discussion and Analysis
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Investor Information
Board of Directors and Management
Aflac Duck
Questions & Answers with the CEO
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QWhat has it meant to you personally and to Aflac as a company to be involved with the Parents House in Japan and the Aflac Cancer Center and Blood Disorders Service of Children's Healthcare of Atlanta in the United States?

AWorking with the Aflac Cancer Center and the Parents House has been an absolute joy. And it brings real meaning to what I do. From the business side, I wake up every day ready to follow through on our corporation's main responsibility: bringing value to our shareholders. But at the same time, I was raised knowing that giving back to the community is simply the right thing to do, and the Aflac Cancer Center in the United States and the Parents House in Japan allow us to do just that. I have talked with many children battling cancer and also to their parents. These families are facing the toughest days imaginable, yet they are usually the strongest and most optimistic people I meet. These people never fail to inspire me – and they've come to inspire almost everyone who works for Aflac to do everything we can to help those who need help. Whether supporting the Parents House and the Aflac Cancer Center or paying claims and designing new products, helping families when they need it most is what our business is all about. Our involvement also lets our employees know they can feel good about what their company is doing to help fight pediatric cancer. I can think of no relationship that I treasure more than our partnerships with the Aflac Cancer Center and the Parents House.

QHow has the competitive environment in both Japan and the United States changed?

AIn Japan, there has been a steady increase in competition as others have come to recognize the same opportunity we saw thirty years ago. But according to government data, no one does it more efficiently than Aflac and this speaks to the success of our business model. In the United States, we have yet to see any major change in competition; if anything, weve seen fewer competitors. In both the United States and Japan, our product portfolio, cost structure, financial strength, and distribution channels are the competitive strengths that have made Aflac the market leader. With those strengths in place and our focus on the two largest insurance markets, I believe we will retain our number one position.

QWhy is Aflac here to stay?

ANot only are the United States and Japan the largest insurance markets in the world, but in my opinion, they are both perfectly suited to our products. Our product line may have expanded, but the vision our founders created half a century ago is still very much alive and well. Because we stay in tune with consumers, we are well aware of the many worries that arise when an unexpected medical situation comes up. According to a recent study sponsored by Harvard University, approximately 50% of consumers who filed bankruptcy in 2001 cited medical causes, even though more than three-quarters had insurance at the onset of the illness. Out-of-pocket expenses greatly contributed to their financial hardship. As demand for products and benefits has evolved over the years, we have worked hard to remain in step by offering products that are as relevant today as they were in 1955. And we back up our products with a strong balance sheet, steady cash flow, and a high-quality investment portfolio.

QAs chairman and CEO, you obviously focus an enormous amount of your time on work. When you have some free time, what do you like to do?

AOne of the many things I enjoy doing is spending time at my farm. Whether fishing, horseback riding, or spending time with my family and friends, it's a peaceful place where I can unwind, recharge, and come back to work with fresh ideas. The farm is also a place where I do a lot of entertaining, including agent groups from Japan. I find this setting helps people get to know each other on a more personal level. We dont discuss work at the farm. And I believe this interaction helps us to become a more cohesive team when we get back to the office.

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