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AFLAC INCORPORATED ANNUAL REPORT for 2002


Financial Highlights
Our Mission
Message From Management
Interview with the CEO
AFLAC Japan
AFLAC U.S.


OFFERED AS PDF:
Management's Discussion & Analysis
Financials & Footnotes
Glossary
Investors Information
Board & Management

ADDING MORE ASSOCIATES TO SELL MORE PRODUCTS
Another critical aspect of our strategy has been the expansion of our sales force. At the end of 2002, more than 53,100 licensed sales associates represented AFLAC. More than 15,800 of those agents produced business for us on a monthly average basis during 2002. That's an increase of 21.4%, compared with 2001.

To effectively manage a rapidly growing group of sales associates, we have also increased the number of sales coordinators throughout the country. By the end of the year, we had 63 state sales coordinators who were overseeing sales activities in defined geographic regions. Regional coordinators, who are primarily responsible for recruiting, numbered 430 at year-end 2002, which was 10% above 2001. The number of district coordinators, who train and direct producing sales associates, rose 14% in 2002 to more than 2,000 coordinators.

PULLING IT TOGETHER WITH NATIONAL ADVERTISING
An important key to both recruitment and sales is our national advertising campaign featuring the ubiquitous AFLAC duck. Thanks to the success of our advertising campaign, our brand awareness now stands at 87%, placing AFLAC alongside some of the best-known brands in the country. In 2002, we released four new duck commercials, including one which featured baseball hall-of-famer Yogi Berra. This commercial, which we introduced during the baseball season, was the first in which we included a celebrity in our advertising.

We have more AFLAC duck commercials scheduled for release in 2003, the first three of which will also feature celebrities. We have every reason to believe the new commercials will help us maintain our strong brand awareness, which should continue to benefit recruiting and future sales.

LEADERSHIP BRINGS RESPONSIBILITY
With our success and leading position in the industry, we believe we have a strong responsibility to give back to our community. Our company has demonstrated this leadership through our work with the AFLAC Cancer Center and Blood Disorders Service at Children's Healthcare of Atlanta. AFLAC became the naming sponsor of the facility in 1995, and our commitment to the cancer center has continued on many levels since then. From 1995 through 2002, our company and our sales associates have raised nearly $14 million for the cancer center. Proceeds from the sale of stuffed toy AFLAC ducks on aflac.com go to the cancer center. At the end of 2002, more than 100,000 toy ducks had been sold. In addition to our corporate efforts, AFLAC's sales associates and employees have spent many hours visiting the center's young patients. And we stand behind those at the hospital whose goal is to find cures for childhood cancers and blood disorders.

In addition to other charitable contributions, we made a $1 million gift in 2002 to help create a National Museum of African American History and Culture at the National Mall in Washington, D.C. This museum will be devoted to African American life, history, art and culture.

TECHNOLOGY CONTINUES TO HELP AFLAC IMPROVE CUSTOMER SERVICE
As our sales have grown, so has our need to find new and effective ways to efficiently handle the tremendous increase in business. In just seven years, the daily average number of calls received by our Customer Call Center has nearly tripled. And the average number of claims processed each month in 2002 was 327,100, compared with 190,800 in 1995, an increase of 71%. Without an increased reliance on technology such as improved telephone systems, digital imaging and the Internet, we could not keep up with our ever-growing business.

AFLAC's exclusive SmartApp software is a well-known technological achievement that has benefited our business since 1992. SmartApp reduces paperwork and allows us to process policy applications more quickly. In 2002, approximately 85% of our new payroll policy applications were submitted electronically through SmartApp. And more than half of SmartApp submissions were jet-issued last year, which means those applications were processed and policies were issued without any human intervention.

The Internet also plays a vital role in helping us provide services to our policyholders. A claim form for every line of business is available on aflac.com. Electronic claims forms eliminate the need for our sales associates to store paper forms. Sales associates can also access company sales information from the Associates Services area of our Web site. We will continue to improve our technological capabilities to better serve our customers as our company grows.






Phillip Holcombe, an employee at E. Smith Heating & Air Conditioning in Marietta, Georgia, uses a computerized plasma cutter to cut galvanized sheet metal, which is used for duct-work fittings. E. Smith Heating & Air Conditioning, which has been in business for more than 40 years, has more than 70 employees and annual sales volume of more than $9 million. Mr. Holcombe, who has worked for E. Smith since 1967, is an AFLAC policyholder and a claimant as well. He found his AFLAC cancer policy very beneficial when he was diagnosed with cancer in 1999.



AFLAC's remarkably successful advertising campaign featuring the AFLAC duck has also featured some well-known celebrities. In the summer of 2002, the AFLAC duck shared camera time with Hall of Fame baseball player Yogi Berra. And in February 2003, the AFLAC duck appeared in a commercial taped in Las Vegas with entertainer Wayne Newton. During 2003 several new commercials, including the Wayne Newton commercial, will be released. AFLAC's 87% brand recognition has played a key role in the company's ability to recruit new sales associates, which in turn has driven its strong sales growth.

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