8 / 188
For additional information on Aflac Japan's distribution, see the Aflac Japan Segment subsection of MD&A in this
report.
U.S.
As of December 31, 2016, our U.S. sales force was composed of sales associates and brokers who are licensed to
sell accident and health insurance. Many are also licensed to sell life insurance.
Sales associates and brokers are independent contractors and are paid commissions based on first-year and renewal
premiums from their sales of insurance products. In addition to receiving commissions on personal production, district and
regional sales coordinators may also receive override commissions and incentive bonuses.
We believe that changes we made to our career and broker management infrastructure over the last 30 months are
laying the foundation for expanded long-term growth opportunities. During 2014, Aflac U.S. implemented tactical initiatives
centered around providing competitive compensation to our career agent sales hierarchy and positioning us to more
effectively and consistently execute on the U.S. sales strategy across all states. These measures were designed to more
effectively link sales management's success to Aflac's success. For example, we enhanced compensation through an
incentive bonus for the first level of our sales management, district sales coordinators, who are primarily responsible for
selling Aflac products and training new sales associates. Additionally, we eliminated the commission-based position of
state sales coordinator. To better manage our state operations, we introduced the new position of market director, effective
October 1, 2014. Market directors are salaried with the opportunity to earn sales-related bonuses. We believe these
changes have enhanced and will continue to enhance performance management and better align compensation with new
business results.
We concentrate on marketing our insurance products at the worksite. This method offers policies to individuals
through employment, trade and other associations. Historically, our policies have been individually underwritten with
premiums generally paid by the employee. Additionally, Aflac's individual policies are portable, meaning that individuals
may retain their full insurance coverage upon separation from employment or such affiliation, generally at the same
premium. We collect a major portion of premiums on such sales through payroll deduction or other forms of centralized
billing. With our brokerage sales expansion and CAIC, branded as Aflac Group Insurance, we offer group voluntary
insurance products desired by many large employers. These products are sold on a group basis and often have some
element of guaranteed issue. Worksite marketing enables sales associates and brokers to reach a greater number of
prospective policyholders and lowers distribution costs, compared with individually marketed business.
Aflac U.S. utilizes dual-channel distribution to market our insurance products to businesses of all sizes. Our career
agent channel focuses on marketing Aflac to the small business market, which consists of employers with less than 100
employees. As such, we have aligned our recruiting, training, compensation, marketing and incentives for our career
agents to encourage specific activity and sales of individual policies in this market. Our newest channel is the broker
channel, which is a sales division of Aflac Group. The broker channel focuses on selling to the mid- and large-case
market, which is comprised of employers with more than 100 employees and typically an average size of 1,000
employees or more. Since regional and national brokers have traditionally served the mid- and large-case market, the
highly trained and experienced sales professionals of the broker channel are assigned a geographic market to strengthen
relationships with the top brokers and sell Aflac products to their clients. As a result, we are represented on more than 80
benefit administration platforms, sometimes referred to as exchanges, of various brokers.
For additional information on Aflac's U.S. distribution, see the Aflac U.S. Segment subsection of MD&A in this report.
6