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As used in this report, “we,” “our,” “us” and “Registrant” refer to Aflac Incorporated.
PART I
1
ITEM 1. BUSINESS
We prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP). This
report includes certain forward-looking information that is based on current expectations and is subject to a number of
risks and uncertainties. For details on forward-looking information, see Management's Discussion and Analysis of
Financial Condition and Results of Operations (MD&A), Part II, Item 7, of this report.
Aflac Incorporated qualifies as a large accelerated filer within the meaning of Rule 12b-2 under the U.S. Securities
Exchange Act of 1934 as amended (the Exchange Act). Our Internet address is
aflac.com. The information on the
Company's website is not incorporated by reference in this annual report on Form 10-K. We make available, free of
charge on the Investors portion of our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K and amendments thereto as soon as reasonably practicable after those forms have been
electronically filed with or furnished to the Securities and Exchange Commission (SEC).
General Description
Aflac Incorporated (the Parent Company) was incorporated in 1973 under the laws of the state of Georgia. Aflac
Incorporated is a general business holding company and acts as a management company, overseeing the operations of
its subsidiaries by providing management services and making capital available. Its principal business is voluntary
supplemental and life insurance, which is marketed and administered through its subsidiary, American Family Life
Assurance Company of Columbus (Aflac), which operates in the United States (Aflac U.S.) and as a branch in Japan
(Aflac Japan). Most of Aflac's policies are individually underwritten and marketed through independent agents. Aflac U.S.
markets and administers group products through Continental American Insurance Company (CAIC), branded as Aflac
Group Insurance. Our insurance operations in the United States and our branch in Japan service the two markets for our
insurance business.
On December 2, 2016, we publicly announced that we will pursue the conversion of Aflac Japan from a branch
structure to a subsidiary structure, with the subsidiary incorporated as a “Kabushiki Kaisha.” While the branch structure
remains an acceptable legal form, the subsidiary structure has emerged as the more prevalent structure for both domestic
and foreign companies operating in Japan. In addition, emerging global regulatory standards generally favor the
subsidiary structure for foreign insurance and financial service companies. The adoption of this new organizational
framework is expected to be tax-neutral and not to have a material impact on the daily operations of either Aflac Japan or
Aflac U.S. as a result of this conversion. In addition, we expect to obtain enhanced flexibility in capital management and
business development as a result of the conversion. We anticipate completion of the conversion in mid-2018.
Aflac offers voluntary insurance policies in Japan and the United States that provide a layer of financial protection
against income and asset loss. We continue to diversify our product offerings in both Japan and the United States. Aflac
Japan sells voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/
sickness riders, care plans, living benefit life plans, ordinary life insurance plans and annuities. Aflac U.S. sells voluntary
supplemental insurance products including products designed to protect individuals from depletion of assets (accident,
cancer, critical illness/care, hospital indemnity, fixed-benefit dental, and vision care plans) and loss-of-income products
(life and short-term disability plans).
We are authorized to conduct insurance business in all 50 states, the District of Columbia, several U.S. territories and
Japan. Aflac Japan's revenues, including realized gains and losses on its investment portfolio, accounted for 71% of the
Company's total revenues in 2016, compared with 70% in 2015 and 72% in 2014. The percentage of the Company's total
assets attributable to Aflac Japan was 83% at both December 31, 2016 and 2015.
Reporting Segments
Aflac's insurance business consists of two reporting segments: Aflac Japan and Aflac U.S. Aflac Japan, which
currently operates as a branch of Aflac, is the principal contributor to the Parent Company’s consolidated earnings. The
conversion of Aflac Japan to a subsidiary structure is not expected to affect our segment reporting structure.
For information on our results of operations and financial information by segment, see MD&A and Note 2 of the Notes
to the Consolidated Financial Statements in this report.