OUTLOOK – JAPAN REMAINS A GREAT MARKET
We believe AFLAC Japan's future is bright. Although it's impossible to predict when Japan's economy will improve, we have done a good job making the best of a tough environment. And with the long-term problems created by an aging population and a strained health care system, we believe the demand for affordable insurance products will steadily increase. To help us further tap into the Japanese market, we will:

Further expand our product line. We will continue to develop new products that will help consumers cope with the ever-increasing costs of medical care.



Emphasize our financial strength. In an uncertain economy, consumers are asking more questions about the strength of insurance companies before they purchase a product. We view our strong balance sheet and financial strength ratings as key competitive strengths that will contribute to our continued success.

Grow our distribution system. We will continue to recruit more agencies, especially individual agencies, which are well-equipped to tap into the small and medium-sized business markets. We estimate that market includes nearly 40 million consumers.

Improve our efficiency. We will continue to add to our technological resources and improve our business processes to better serve our customers and maintain our primary competitive strength.

Dr. Mutsuro Ohhira, head of the Pediatric Department of the National Cancer Center in Tokyo, has worked closely with the AFLAC Parents' House in Tokyo. Dr. Ohhira is director general for Family House, an inpatient children's care center that manages the AFLAC Parents' House. The AFLAC Parents' House provides a place for parents to stay with their children who come to Tokyo to obtain medical treatment. AFLAC initiated support to help build the AFLAC Parents' House in 1999 in commemoration of the 25th anniversary of AFLAC Japan.



AFLAC customer Yoko Suzuki, right, speaks with Muneko Takano, an employee of an AFLAC Service Shop in Sendai, Japan. Ms. Suzuki stopped by the shop, operated by Yoshiteru Kawabe, to change the address on her AFLAC policies after recently moving from Tokyo to Sendai. AFLAC Service Shops are designed to encourage insurance shoppers to stop in and discuss their insurance needs. These shops are well suited to help individual policyholders and small businesses.