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Merrill Lynch Says AFLAC Faces Tougher Competition In Japan

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NU Online News Service, July 26, 11:15 a.m. – Analysts at Merrill Lynch & Company Inc., New York, predict the sluggish sales that AFLAC Inc., Columbus, Ga., reported for the second quarter will continue into the second half.

AFLAC reported $2.35 billion in revenue for the quarter, down from $2.36 billion in revenue for the second quarter of 2000.

AFLAC, which is known for creating and dominating the modern Japanese cancer insurance market, attributed some of the softness to the growing strength of the dollar. Changes in the dollar-yen exchange rate make Japanese results look weaker in dollars than they do in yen, the company argues.

But the Merrill Lynch analysts say AFLAC is also facing tougher competition in Japan from local rivals.

Sales at AFLAC Japan, the Japanese subsidiary, will probably be flat in the second half, the analysts write.

Earlier this year, the analysts had hoped AFLAC Japan sales might increase as much as 15%.