Amos: Aflac keeps its promises in good times and bad

CEO touches on dividends, investments and the duck during annual shareholder meeting at Columbus Museum

tadams@ledger-enquirer.comMay 6, 2013 

Wrapping up his remarks to Aflac shareholders Monday, Dan Amos, the company’s top executive, injected a dose of news-based reality concerning the Columbus-based insurer’s impact on its customers.

“We are a very big company,” the chairman and chief executive officer said. “And that means if a terrorist makes an attack on New York, an earthquake or tsunami happens in Japan, a senseless shooting takes place at a school, people get hurt or killed in a horrible bombing incident at the Boston Marathon, or a fertilizer plant explodes in Texas, most likely our policyholders will be among the casualties or the injured.”

Indeed, that has been the case, Amos told those gathered at the Columbus Museum on Wynnton Road. He said some of the deceased emergency personnel responding to the deadly plant blast in West, Texas, last month were insured by Aflac, as were a number of people wounded by the bomb blast in Boston on April 15.

The educators caught in December’s school shooting rampage in Newtown, Conn., also had been policyholders for more than a decade, Amos said, while the company insured some of the dead and injured during the Sept. 11, 2001, terrorist attacks on the U.S. and the 2011 earthquake-tsunami in Japan.

“A lot of insurance companies talk about being there in a time of need,” the CEO said. “But I can tell you that Aflac does it. It is our promise and one that we will continue to keep.”

Much of Monday’s annual shareholder meeting — which used the buzz words passion, fire and drive — centered on the company’s historical and current financial progress, along with goals for 2013.

For instance, Amos related how 1,000 shares of Aflac stock bought for $11,100 in the firm’s founding year of 1955 — if left untouched following stock splits — would have grown to nearly 1.9 million shares today. That would yield a $2.6 million cash dividend check.

“What is impressive is when the market closed on Friday, that original investment of $11,100 was worth $104.8 million,” he said. Other milestones by the company in 2012 included reaching its operational earnings per share projection for 23 straight years. And 2012 marked the 30th year in a row Aflac had increased its cash dividend to shareholders.

Some of the major financial numbers from 2012 included a record $25.4 billion in total revenue, record net investment income of $3.5 billion, premium income of $22.1 billion, total investments and cash of $118.2, and $15.3 billion in benefits and claims paid to policyholders.

“With the first quarter of the year complete, we believe that we’re on track to have another solid financial performance,” said Amos, citing the projection that operating earnings per share should rise 4 percent to 7 percent this year. “I will also remind you that 2012 earnings were better than expected, which makes 2013 a tougher year for us.”

Roughly 80 percent of Aflac’s business comes from Japan, a country with a national health-care system. That experience over the last found decades should help the company prepare for changes that are coming in 2014 as part of the Affordable Care Act, the CEO said.

“Although there will be more competition, we believe that the national health-care system in the U.S. actually presents Aflac with opportunities as consumers become more aware of the financial protection Aflac products will provide,” he said. “We are spending a great deal of time ensuring we’re prepared to approach this change from a position of strength.”

Amos also touched on what he considered his biggest challenge in 2012 — putting soured investments in European nations behind the company and setting up a Global Investment Division headed by Eric Kirsch. He now expects financial growth in that area.

“Before the financial crisis started in 2008, I thought of our operations in terms of two business units — Aflac U.S. and Aflac Japan,” he said. “After the financial crisis, I think of Aflac’s Global Investment Division as the third business unit.”

The company also will continue to use its cash flow to pay dividends and repurchase shares, he said, with Aflac expecting to buy back between $400 million to $600 million in shares this year, then accelerate that process in 2014.

Those Aflac duck commercials will continue as well, Amos said, with the popular ad campaign pushing the firm’s brand recognition to 94 percent in the U.S., approaching numbers normally garnered by corporate giants Coca-Cola, Apple and Nike.

He said the duck, born 13 years ago, has proven popular in its latest series of ads in which the feathered fowl is injured and then undergoes treatment in and out of a hospital. The creature has received 40,000 online get-well cards, while a new speech therapy ad is scheduled for June.

On the philanthropic front, Aflac and its employees have donated $78 million to the Aflac Cancer Center in Atlanta over the last 18 years, he said, while the company has supported the Aflac Parent’s House in Japan for a dozen years.

The procedural portion of the annual meeting included the departure of Columbus businessman Marvin Schuster, chairman of Schuster Enterprises, a Burger King franchisee, from the company’s board of directors. He had been on the board since 2000 and will be replaced by W. Paul Bowers, CEO of Georgia Power Co.

“You have made a difference. You have given us great counsel and wisdom,” Amos said to Schuster.

On a personal note, Amos mentioned early during the meeting that his father, Paul Amos, had fallen recently at his home and has been hospitalized, but is doing fine. Amos, 87, is the last surviving brother of the three siblings who founded the insurance company 58 years ago. The others are John and Bill Amos.


Columbus-based Aflac Inc. learned Monday it has risen in the latest Fortune 500 rankings, moving from 128 to 118.

The company also made it three in a row, with shares of its stock rising to a 52-week high on Monday after doing the same last Thursday and Friday.

Shares closed up 25 cents, or 0.4 percent, to $55.61 in trading on the New York Stock Exchange Monday. But during the day, the stock inched to $55.93, which is 3 pennies per share higher than the $55.90 high it achieved Friday. The stock’s 52-week low is $38.13.

Ledger-Enquirer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service