4 / 72
changes we made to our career and broker management infrastructure are laying the foundation for expanded
long-term sales growth opportunities. We closed 2015 strongly with our fourth quarter new annualized premium
sales hitting an all-time quarterly record in terms of premium amount. Most notably, I am very proud of the new
chapter we marked in Aflac’s history with the introduction of One Day Pay
SM
, an industry-first initiative that allows
us to process, approve and pay eligible claims in just one day.
Strong Capital Profile Supports Our Promise
Our strong capital position reinforces what I believe is the most important promise an insurance company makes
to its policyholders – to protect them when they need us most by paying claims fairly and promptly. We believe the
financial strength of our Company is important to our business, and it is one of the key metrics of our executive
compensation plan’s long-term incentive program. Our strong capital ratios demonstrate our commitment to our
policyholders, bondholders and shareholders. This financial strength is reflected in the quality of our balance
sheet. We are very pleased by our solid capital levels, and we regularly assess our capital adequacy using
extreme economic scenarios to ensure our financial strength, considering the economic uncertainty in the world.
Strong capital ratios serve to protect our policyholders’ interests.
While policyholders are always top of mind, we strive to enhance shareholder value through capital deployment.
As we’ve communicated, when it comes to deploying excess capital, we still believe that a balanced strategy of
growing the cash dividend and repurchasing our shares represent the most attractive avenues, particularly absent
other compelling uses of that capital. In 2015, we repurchased 21.2 million of our shares at a cost of $1.3 billion.
I am also pleased with the action by our Board of directors in 2015 to increase the cash dividend to shareholders,
marking the 33
rd
consecutive year of dividend increases. Our objective is to grow cash dividends at a rate
generally in line with operating earnings per diluted share before the impact of the yen.
We also take pride in generating an industry-leading return on equity, or ROE. Excluding the yen impact, our
operating ROE for the full year was 20.2%, which was in line with our 2015 operating ROE target of 20% to 25%.
Disciplined Risk Management
2015 represented a year of executing on our long-term investment strategy after completing the transformation of
our investment platform, which included new leadership, building out investment teams in New York and Tokyo,
new investment processes and governance that properly balances risk and investment returns. As we enter 2016,
we once again find ourselves entering a period of volatility in the capital markets. Accordingly, we have a global
investment policy that is governed by strict risk guidelines to ensure our portfolios are managed to achieve a high
overall asset quality and remain diversified while seeking out attractive investment opportunities around the world.
Our risk management discipline ensures we are mindful of various market challenges, including risks related to
interest rates, credit spreads and foreign exchange rates to help ensure our portfolio will perform well through
various market cycles. Our investment philosophy guides us to act in the best interests of our policyholders, while
producing attractive returns for all of our stakeholders.
The Next Chapter: Keeping Our Promise – The Aflac Way
Ever since our founding, we have always put the customer first by reminding ourselves daily about the promises
we make to the policyholders and businesses who rely on us – and positioning our business to fulfill those
promises. We believe this philosophy best enables us to deliver long-term, sustainable growth to all our
shareholders. We know that we don’t simply sell voluntary insurance products. We sell a promise to be there for
our policyholders in their time of need – a promise we don’t take lightly. By delivering on our promise, we’ve
gained the trust of more than 50 million people worldwide who count on us to pay claims fairly and promptly when
they need us most – fulfilling The Aflac Way.
As we look ahead, delivering on our promise will remain our priority because we know that is not only what sets
Aflac apart, it’s the story of Aflac.
Thank you for putting your faith, confidence and resources in Aflac Incorporated. Enhancing the value of your
investment remains our priority.
Sincerely,
Daniel P. Amos