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As we embark upon our 60
th
year operating
in the United States – and look back on our
40
th
year operating in Japan – we are privi-
leged to help provide financial protection
to more than 50 million people. And while
so much has changed in the world since
we opened our doors for business in
both countries, one thing has remained
steadfast: Aflac’s dedication and determi-
nation to be there for our policyholders in
their time of need.
Throughout our decades-long journey
of success in both countries, we’ve
remained true to our values and our
corporate culture, which are exemplified
by a collection of guiding principles we
call “the Aflac Way.” These principles
embody the story of Aflac reflected in
our company’s focus on ethics and
customer service as well as our belief that
our products help people in their time of
need. The Aflac Way embodies our drive
to uphold the commitments we make
to our policyholders, customers, fellow
employees and shareholders. When we
operate the Aflac Way, we are living the
legacy created by those before us.
The success we’ve achieved over these
decades has been a result of the strategy
we have pursued for many years:
offering
relevant voluntary products through
expandeddistributionchannels, yielding
new accounts and customers.
2014 was another good year during
which we extended our record of success
and cultivated more opportunities. In
both Japan and the United States, we
successfully introduced new products,
enhanced our distribution systems and
strategically promoted our brand. On
top of that, 2014 operating earnings* per
diluted share, excluding the impact of the
yen, grew 3.9%, which was at the higher
end of our expectation. This metric is one
of the principal financial measures used
to evaluate management’s performance,
and we believe it continues to be one of
the best measures of our performance
and has been a key driver of shareholder
value for many years.
STRONG CAPITAL PROFILE
We believe the financial strength of our
company is an important aspect of our
business. Our capital ratios demonstrate
our commitment to maintaining strong
capital levels and flexibility on behalf of our
policyholders, bondholders and share-
holders. 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
under extreme economic scenarios. In
the United States, we measure our capital
adequacy using the risk-based capital, or
RBC ratio.
At the end of 2014, our RBC ratio was
945%, which was significantly higher than
our 2013 RBC ratio. Capital adequacy
in Japan is measured by the solvency
margin ratio, or SMR. Aflac Japan’s SMR
at December 31, 2014, was 857%, which
was also higher than our 2013 SMR.
Strong capital ratios serve to protect our
policyholders’ interests. We’re proud the
rating agencies continue to recognize the
strength of our balance sheet. Our financial
strength ratings, which reflect our ability to
pay claims, are A+ (Superior) by A.M. Best,
Aa3 by Moody’s, AA- by S&P and AA- by
Rating & Investment Information Inc. (R&I).
While policyholders are top of mind, we
also strive to enhance shareholder value
through capital deployment. As we have
said for many years, when it comes to
deploying capital, we still believe that
growing the cash dividend and repur-
chasing our shares are the most attractive
means, and those are avenues we will
continue to pursue. In 2014, we repur-
chased $1.2 billion, or 19.7 million of our
shares, which is consistent with what we
had communicated.
I am also pleased with the action by our
board of directors in 2014 to increase the
cash dividend to shareholders, marking
the 32
nd
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.
At Aflac, we have always managed our
business for the long term, maintaining
a sharp focus on our financial objectives
while simultaneously concentrating on
enhancing customer service and building
our book of business. In the United States
MESSAGE FROM MANAGEMENT
DANIEL P. AMOS
, CHAIRMAN AND CEO
Living the Aflac Legacy
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