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Although Japan’s economic outlook remains unclear, we believe AFLAC products are perfectly suited to the Japanese market. We believe the need for our products will continue to benefit from demographic trends in Japan. It was estimated that nearly 20% of the population was over age 65 in 2003; by 2025, that figure is expected to be closer to 30%. Although overall household spending in Japan has declined for several years, health care spending per household has increased for four consecutive years. This is another indication of the increasing health care cost burden consumers must bear. As this burden continues to increase, we believe our products will remain a valuable element of Japanese consumers’ insurance coverage.
And it is possible that there could be future increases in copayments for participants in Japan’s national health care system.
Given these trends, we believe AFLAC Japan’s future remains bright, and we will pursue the following objectives to further hone our edge in the vast Japanese market.
Broaden our product line: We will add new products and update existing ones to ensure that our product line continues to meet consumers’ needs.
Grow our distribution system: We will continue to aggressively recruit new sales agencies, particularly individual agencies, to better tap into the vast small to medium-sized business market in Japan.
Improve our operational efficiency: We will continue to invest in technology to help make work processes more efficient and to provide our policyholders and payroll accounts with superior customer service.
Emphasize our strengths: We believe our financial strength and the strength of our brand are keys to attracting new sales agencies and new customers.
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