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AFLAC Quacks About Higher Profits

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NU Online News Service, April 29, 2004, 6:07 p.m. EDT – The weak dollar, strong sales of health insurance in Japan and improving sales of supplemental products in the United States are giving AFLAC Inc., Columbus, Ohio, something to quack about.[@@]

The company, which used to be best known for developing the Japanese cancer insurance market and now is known for using a spokesduck to promote accidental death and disability insurance, is reporting $315 million in net income for the quarter on $3.3 billion in revenue, up from $237 million in net income on $2.8 billion in revenue.

The fall of the dollar is helping AFLAC’s net results by increasing the dollar value of its Japanese earnings.

Although sales of a major policy rider and sales through an alliance with a Japanese life insurance company were soft, demand for stand-alone health insurance was strong as a result of the ongoing shift of the Japanese health finance system to more reliance on private insurance. Sales of stand-alone medical products accounted for about 33% of the company’s new sales in Japan, AFLAC says.

In the United States, new training and expansion of the sales force contributed to a 14% increase in premiums from new product sales, AFLAC says.

AD&D accounted for 52% of first-quarter sales in the United States.