Sunday Interview with Aflac CEO Dan Amos

chwilliams@ledger-enquirer.comMarch 1, 2014 

Dan Amos has been at the helm of supplemental insurance company Aflac for nearly a quarter of a century.

He leads a Columbus-based company that has more than 8,000 employees and is one of the nation's largest corporations, according to the Fortune 500 rankings.

Amos, 62, recently sat down with Ledger-Enquirer reporter Chuck Williams to talk about everything from business to his personal life.

Here are excerpts of that interview, with some of the questions edited for length and the order of some of the questions rearranged for clarity.

The most iconic brand in Georgia is Coca-Cola. Did you think your company would rival Coca-Cola for brand recognition?

I'll tell you a true story. In 1974, I was 23 years old. My dad and I went up to our opening on the New York Stock Exchange. We were country come to town.

We were walking down the street and there was a Coca-Cola store where you could buy products. He stopped me and he said, "I want you to look at this." I said "What?" He said, "I want you to look." I said, "Yeah, Coca Cola." He said, "No." He said, "People are buying that brand."

You think of people that you hand them a cap or you hand them a T-shirt because you want them to wear your brand, but they're buying that brand. He said, "Now, let me tell you something. When they buy your brand to wear, you have arrived."

We were up here one day after the Aflac Duck and we start getting e-mails from people wanting to buy an Aflac Duck. We haven't even thought about making a stuffed Aflac Duck -- had not even crossed our minds.

All of a sudden Kathelen, when she was in charge of advertising, she walks in and says, "They want a duck." I said, "We've got to create one, but let me tell you something, we have arrived." And she said, "What do you mean?" I told her the story.

So, I call all the staff in and I said, "I want y'all to know we've arrived. I don't know how big we've arrived, but we've arrived if people will buy your brand."

And that's the truth.

Talk about the Duck. How did the Duck change this company?

Oh, it is, you know, one of the five most important things that ever happened to the company. I guess the best thing I can give you an example of is an outside source of what people are spending on advertising. Geico is spending $900 million and they are No. 1 in recognition. State Farm is No. 2 and Aflac is No. 3. We're spending $95 million; they're spending $900 million. That tells you what the Duck is worth. Allstate is there, Progressive is there, and you can see even Progressive is spending almost $500 million.

Last year the Duck had some health issues that were documented in your commercials. Is the Duck getting close to retirement?

No, the Duck will be here a long, long time. I think the Duck will be here longer than me. The Duck is gold.

What would your Uncle John (Amos) say if he walked back in right now and saw the state of the company?

I think he would be pleased. I think about that a lot, actually. I loved my Uncle John and I always say that since he passed away, things have been boring around here. He was an entrepreneur, a free spirit, and you never knew what he would come up with. I run more methodical in nature, but I think he would be very pleased. Remember, he's the one when I wanted to change the name -- both my dad was working and he was working -- he said go ahead. So, they never fought change. They believed, just as I do, that with change comes opportunity. And I realized with "American Family" we would never be able to build the brand. So they supported and let me do it. Remember, his office was on the top and we put that big Aflac up at the top. So it would surround him, but never bothered him. He was always for change.

You are going on 24 years as CEO and you've indicated you want to go until you are 70, right?

I said at least 70.

So 70 is not a drop-dead number?

Not a drop-dead number, no, but I still think 70 is a good year, but I've said at least 70. I've always said that. But 70 gets here faster than I realized. At some point in time you have to prepare for succession. I've been doing that in everything I do. I love what I do and it's been a lot of fun and I want to continue to grow the business. I'm as excited about it today as I was the day I walked in the door.

Do you still have the desire and stamina in your 60s that you had 24 or 25 years ago?

I have the desire and I think I have the stamina. I go to Japan constantly. You know it really boils down to whether or not you like what you do. You can be 24 years old and hate what you do and you don't have much desire and you don't have much stamina. If you love what you do and you take care of yourself and you do the right things, then God willing and good health, you can do it. I truly enjoy it. I'll be the first to tell you I've got great people who do great jobs for me and I have always been a person who delegates very heavily.

I know you're a few years away from it now, but what will retirement look like for you?

I don't think I'll ever retire per se. I may retire from the company, but I don't think I'll retire from working. I enjoy working. I think I'll probably do a lot of philanthropic things. I've been blessed, my family has been blessed, and I want to return some of that in helping others. It's very rewarding, so I look to do things like that.

Speaking of retirement, how are your parents doing?

Mother is doing great. Dad is struggling, but hanging in there. He has Parkinson's, so he struggles with that. But he's a tough guy.

A lot of people who know both of you well say you're very much like your father. Did you have a lot of his traits?

Sure. He is a people person and I feel like I learned the sales part from him. John was the entrepreneur and my dad was the sales and people person. I think I got a lot of my characteristics from him. When I do something crazy, they always say that's John.

Recently you talked with your employees about the state of the company. What was the message?

The message was "With change comes opportunity." And as we're moving into a national health care environment, there will be lots of change, and that change will open the door for us to grow our business in the United States.

So, you're talking about what's commonly referred to as 'Obamacare'? How will that affect your business?

I believe that most Americans are going to buy the Bronze Plan, which is the cheapest plan, which is also the one with the highest co-pays and deductibles. With that happening, I think more people are going to be interested in buying insurance coverage that fills the gap and that's exactly what we do -- supplemental insurance.

Is Aflac taking steps to capitalize on that increased demand fr supplemental insurance?

Absolutely. We're doing it by creating our own exchange where consumers will be able to buy not only our coverage, but they'll be able to through the National Healthcare Exchange. They'll come through our exchange to go to it to buy major medical insurance.We're even going to have it where they can buy a couple of other major medical insurances, so it will be one-stop shopping, especially for a small business.

We're in the process of testing to offer even major medical insurance. Now, we won't underwrite it, but we will offer it as part of a package. We'll offer short-term disability; we'll offer long-term disability through another carrier. We offer dental. We'll offer our products and we'll offer major medical. So, it will be different, but what will happen is it will give us much more access to employees.

... The only problem we're dealing with right now is uncertainty. People every day are finding out that something changes. I just want it to be resolved like it is in Japan where we have national health care. Once that happens, then people will settle down. But when people don't know, a lot of times they don't make a decision -- especially the employers who are trying to decide what to do.

Is this a fundamental shift in Aflac's U.S. business philosophy?

Yes, I would say it is a shift to some degree, but the idea of an exchange is really nothing more than a way of selling. It's not a new product -- we'll be selling the same product -- but it's the way we'll approach selling. We'll tell the small employer, "We'll handle everything for you, and for that you let us offer our products." So, I think it's going to open the door for higher penetration in accounts that we didn't have before.

When you took over in 1990, could you have ever anticipated that Aflac would be a $29 billion company?

No. You know, I look back, I think our stock was at $1.87. And I look at it today and stock can go up or down $1.87 in a day. It was under a billion dollars. I did think we would grow. I thought that fundamentally what we sold or what we were selling was needed and wanted. And I thought that would ultimately continue to drive us. But the Japanese market has continued to grow tremendously. I knew it would do well, but I can't say I thought it would do this well. I just feel blessed over the whole thing.

In the Book of Luke, it says, "From whom much is given, much is expected." You, your wife Kathelen, and your family have all been tremendously blessed. How do you try to live that Scripture?

Well, one thing I think you do is you don't tell others you're doing it. I think that's one of the most important things that's in the Scripture is you don't flaunt what you're doing. Let me say this, this is a town that very much lives that. There are more private givers in this town per capita probably than anywhere I have ever known. They quietly give -- they don't tell anybody. They don't want recognition; they just want to help others. And that has played a role in making others give quietly. I think there are times when you should give publicly, too. I think people who give publicly sometimes get other people to give publicly. So it can work to an advantage if there's a capital campaign and you're trying to get money. If Mary Jones over here gave money, then John Smith may say, "Well, I like Mary so it must be something good, so I'm going to give money too." It can work to an advantage, but there are also people who don't want any recognition.

When did you first realize there was a culture of giving in Columbus?

My dad and mother brought me up that way to a great degree and I saw it in our church. St. Luke (United Methodist) always had a lot of givers. Then what happened is they get you to serve on some particular capital campaign and when you get into the capital campaign, you begin to see how the sausage is made. You get to find out all the details of who gave here and who gave there because you're trying to reach a number. So you ask yourself, will such and such be willing to give or do they have a heart of giving, do they love this particular organization or not? So it varies.

One of the funniest stories about giving is about Jimmy Blanchard. This was the capital campaign for the museum and Jimmy said he would take the capital campaign. This had to have been 30 years ago. He asked me to co-chair with him, so I did. Every Friday morning we met at 7 a.m. to raise money for this campaign. I remember one time they gave me the name of someone and they wanted me to ask them for a million dollars. I couldn't even breathe, I couldn't even talk. I was 30 years old and didn't hardly know what to say. I said, "Jim, how do you ask a person for a million dollars?" And he said, "Have you ever asked someone for a hundred?" And I said, "Of course." And he said, "That's just a few more zeros -- go get them."

Just as Aflac is not the same company it was 25 years ago, this is not the same community it was 25 years ago. How have you seen Columbus change from your role as CEO over the last quarter of a century?

It's much easier recruiting people. It's not a little Southern town that was built on mill business. It's today a town that is located an hour and a half away from a major airport. It's located three and a half hours from the mountains, three and a half hours from the Gulf. Five hours from the Atlantic. We've got a good school system. You're within 45 minutes from a major university where you can go to concerts and do things.

And the workforce is growing and it has moved to a more educated workforce.

Columbus State is a much bigger university, a more prestigious university. The technical school is doing an outstanding job in training some of our employees. It has a strong nursing program. My wife went through the nursing program and got her degree. All those things just make it a good place to live. It's a good city to live in and it offers all kinds of opportunities.

Have you been on the new white water rafting course?



Oh, it is terrific. I loved it. We had a great time. Kathelen and I went down. She's been down a couple of times. But it was a lot of fun. It is a big hit and it is something that separates this city from other cities.

Did you go high flow or low flow?

Low flow, but I will say I will go high flow. I've been on the Chattooga. Not only have I been on the Chattooga, I fell out of the raft on the Chattooga and went under a few years ago. So, I will go high flow.

You're bringing in people who may have lived in New York, San Francisco, or the Silicone Valley. Has the quality of life helped keep those people with Aflac?

Absolutely. Everything about it has improved. The school system. The shopping the arts. What Columbus State has done. What the Museum has done. The Riverwalk, how beautiful it is down there. There's the RiverCenter, the Space Center. There's just something always going on.

One thing they were talking about at the Chamber meeting Monday was about how Columbus could grow the retirees, and I agree with that because most people over 65 don't like cold weather. The snowbirds come down during a period of time, but the fact is our summers are very warm, but our winters are almost perfect.

How is the business culture in Japan different than the culture in the U.S.?

Well, there's lifetime employment when you hire somebody. It goes back to many years ago in the United States, a lot of people never changed jobs. Today, you see people changing jobs more. I think we in Columbus change jobs less than major cities. The thing that drives you to change is if you can go across the street and change jobs. You don't have to sell your house and move. So, one thing I point out is if you're coming to Columbus, it's a lifestyle change. You're not going to be in the car driving constantly. It's a different way of life to a degree, and I think in a positive way. What I found is when people get here most of the people love it. And if they do, they never want to leave. There are a few who don't. They like the metropolitan life and for those people, they'll move on, but most of them enjoy that way of life.

How has your knowledge of Japan and the Japanese people changed you? Or has it changed you over the years?

I believe it has made me more patient. I don't know if it's age or if it's Japan, but it's made me more patient because you build relationships. I'll never forget the first time I went over there to hire an advertising agency. I went over and we didn't talk anything about advertising and I flew all the way back here and then had to fly all the way back again to talk about advertising.

They want to build relationships first, then they want to talk business. And even today sometimes it drives me crazy but you have to understand the culture and work with them. I think it fits well with Southerners more so than Northerners who live a faster pace of life and want to make a decision right then and move on. I think that's one reason Japan and our company has done so well is we understand relationships and it has worked real well for us.

Your son Paul is working in Japan now. What's the thinking behind that? What is Paul doing over there?

Paul speaks fluent Japanese. He took that at Duke. He and his entire family are living over there. They'll be there six months to a year. He started working with Japan back in May and now is the point person for the Japanese operation. He's been working with the U.S. for years.

We're cross-training. Ken Janke, who is deputy chief financial officer, now is working with the U.S. operation as president of Aflac U.S. Ken is overseeing the Aflac Columbus operation and the operation in Columbia, S.C. Ken will eventually go back as chief financial officer. His long-term goal is not to be in charge of the U.S. His long-term goal is to know how to be the chief financial officer, but I think you need to have operational skills.

Paul is working with Japan to understand it, works closely with it and that's experience you can't look at lightly. And so I think that gives him an opportunity to do that. It will make him well rounded.

So Paul is just one piece of a much larger puzzle right now?

That's right. I mean, certainly Paul will be considered as my replacement. I don't know who will get it, but certainly that's a goal he would like to achieve and if he does a good job he'll be in the running for that.

But I'm not going anywhere right now. I want to be clear on that.

So this isn't a retirement interview?

This is not a retirement interview.

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