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Foreign Currency Translation
Aflac Japan’s premiums and approximately half of its investment income are received in yen. Claims and most
expenses are paid in yen, and we purchase yen-denominated assets and U.S. dollar-denominated assets, which may be
hedged to yen, to support yen-denominated policy liabilities. These and other yen-denominated financial statement items
are, however, translated into dollars for financial reporting purposes. For information regarding the effect of currency
fluctuations on our business, see the Foreign Currency Translation and Market Risks of Financial Instruments - Currency
Risk subsections of MD&A and Notes 1 and 2 of the Notes to the Consolidated Financial Statements in this report.
Insurance Premiums
The growth of earned premiums is directly affected by the change in premiums in force and by the change in
weighted-average yen/dollar exchange rates. Consolidated earned premiums were $19.2 billion in 2016, $17.6 billion in
2015, and $19.1 billion in 2014. For additional information on the composition of earned premiums by segment, see Note
2 of the Notes to the Consolidated Financial Statements in this report. The following table presents the changes in
annualized premiums in force for Aflac's insurance business for the years ended December 31.
(In millions)
2016
2015
2014
Annualized premiums in force, beginning of year
$ 19,173
$ 18,894 $ 20,440
New sales, including conversions
2,527
2,484
2,513
Change in unprocessed new sales
(46)
(41)
13
Premiums lapsed and surrendered
(2,102)
(2,104)
(2,146)
Other
(351)
(56)
(29)
Foreign currency translation adjustment
483
(4)
(1,897)
Annualized premiums in force, end of year
$ 19,684
$ 19,173 $ 18,894
Japan
We translate Aflac Japan's annualized premiums in force into dollars at the respective end-of-period exchange rates.
Changes in annualized premiums in force are translated at weighted-average exchange rates. The following table
presents the changes in annualized premiums in force for Aflac Japan for the years ended December 31.
In Dollars
In Yen
(In millions of dollars and billions of yen)
2016
2015
2014
2016
2015 2014
Annualized premiums in force, beginning of year
$ 13,413
$ 13,226 $ 14,870
1,617
1,594 1,567
New sales, including conversions
1,045
997 1,080
114
121 115
Change in unprocessed new sales
(46)
(41)
13
(5)
(5)
1
Premiums lapsed and surrendered
(623)
(578)
(695)
(68)
(70)
(74)
Other
(484)
(187)
(145)
(52)
(23)
(15)
Foreign currency translation adjustment
483
(4)
(1,897)
0
0
0
Annualized premiums in force, end of year
$ 13,788
$ 13,413 $ 13,226
1,606
1,617 1,594
For further information regarding Aflac Japan's financial results and sales, see the Aflac Japan Segment subsection of
MD&A in this report.
U.S.
The following table presents the changes in annualized premiums in force for Aflac U.S. for the years ended
December 31.
(In millions)
2016
2015
2014
Annualized premiums in force, beginning of year
$ 5,760
$ 5,668
$ 5,570
New sales, including conversions
1,482
1,487
1,433
Premiums lapsed
(1,479)
(1,526)
(1,451)
Other
133
131
116
Annualized premiums in force, end of year
$ 5,896
$ 5,760
$ 5,668
2