Cancer product sales accounted for about 20% of sales in 2003. Sales in our hospital indemnity category grew by 16.5% during the year, the largest percentage increase of any of our major products. It was our third-best-selling product category behind accident/disability and cancer. And for the second year in a row, sales in this product category were driven by the personal sickness indemnity product we introduced in 2002.
We continually evaluate and enhance the administration of our business in order to improve operating efficiency. That in turn allows us to offer the best products with the best service at the best price, while maintaining stable profit margins. We have adopted new technology that is helping us improve our policy application process, customer service, and training of sales associates.
Our best-known technology, SmartApp, is used by our sales associates to electronically transmit policy applications to company headquarters. SmartApp is critical for us to accommodate an ever-growing number of producing sales associates. Last year, approximately 85% of our new policy applications were submitted via SmartApp.
The benefits from SmartApp have been tremendous. Nonetheless, we were convinced we could do even better. In late 2003, we completed the testing of an updated version of SmartApp, called SmartApp Next Generation, or SmartApp NG. This new software is more user-friendly for sales associates and requires less processing work on the part of headquarters’ personnel. In early 2004, we began a rollout of SmartApp NG. We expect it will take 12 to 18 months for all associates to begin using the new software.
In March 2003 we introduced an interactive voice response system (IVR) for our policyholders and payroll accounts. And in November we rolled out an upgraded IVR system for our sales associates. These new IVR systems offer callers the convenience of having access to information about their accounts at any time, day or night and improve the overall efficiency of our call center.
Another new technological improvement is our new Network Operations Center (NOC). This high-tech center is a centralized monitoring point for the entire information technology infrastructure at AFLAC U.S. Approximately 5,000 components, such as servers, mainframes, networks and optical applications are monitored by automated NOC systems. This important center allows our associates and employees to better serve our payroll accounts and customers.
Technology is also playing an important role in our training. In August 2003, we launched a comprehensive web-based sales training initiative called AFLAC UniversitySM. At AFLAC University, associates may take online courses about products, sales tools and technology. In addition, they may participate in courses on career and personal development. AFLAC University has certified training coordinators in every state operation who lead more than 3,000 workshops each year.
Although AFLAC U.S. sales growth slowed in 2003, we don’t believe it is a sign that our advertising campaign featuring the AFLAC Duck is any less successful. To the contrary, our brand awareness reached a record 89% in 2003, putting us on par with some of the best-branded companies in the United States.
In the spring of 2003, we released a commercial featuring the AFLAC Duck and comedian Chevy Chase. And in January 2004, we launched an animated AFLAC Duck commercial, featuring famous LOONEY TUNESTM characters. It was the first of several new AFLAC Duck commercials to debut in 2004.
Just as the AFLAC Duck is the symbol of our advertising campaign, it has also become a symbol of our company’s philanthropic efforts. We take seriously our commitment to the AFLAC Cancer Center and Blood Disorders Service of Children’s Healthcare of Atlanta. AFLAC’s employees and sales associates have embraced the center’s efforts to find a cure for blood disorders and childhood cancers. Over the years, the AFLAC family has pledged approximately $20 million to the center. As one of the largest pediatric cancer centers in the United States, it treats more than 300 newly diagnosed cancer and 1,000 sickle cell patients annually.
Proceeds from sales of toy AFLAC Ducks, which are sold primarily over aflac.com, go to the AFLAC Cancer Center. During the 2003 holiday season, AFLAC again partnered with Federated Department Stores to sell special limited-edition AFLAC Holiday Ducks. As in previous years, the sale was a tremendous success. More than 60,000 AFLAC Holiday Ducks were sold during a three-week period, raising $375,000 for eight children’s hospitals nationwide.
|
