1 AFLAC | WORKFORCES REPORT The Role of Voluntary Insurance in the New Health Care Landscape Tye Elliott, VP Aflac Core Broker Sales

2 AFLAC | WORKFORCES REPORT Today’s health care environment Impact on employers and employees The broker’s role Benefits of voluntary insurance The path toward voluntary insurance

3 AFLAC | WORKFORCES REPORT Where are we on the health care reform journey?

4 AFLAC | WORKFORCES REPORT Health care costs are continuing to rise Companies are cutting costs A comprehensive benefits package now more important to employees Situation Analysis

5 AFLAC | WORKFORCES REPORT Current realities: Rising health insurance costs Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage

6 AFLAC | WORKFORCES REPORT Companies looking to offset financial pressure caused by rising health care costs Employers are shifting costs to employees 56% of companies increased employees’ co- payments and/or employees’ share of premiums

7 AFLAC | WORKFORCES REPORT Employees looking at benefits packages as safety nets Emphasis on a well-rounded, comprehensive benefits package 6 in 10 of today’s employees would be willing to take a job with lower pay, but better benefits

8 AFLAC | WORKFORCES REPORT How does the current health care landscape affect brokers? 8 AFLAC | WORKFORCES REPORT Use of brokers is growing –From 2011 to 2014, employers use of brokers grew from 56% to 64%

9 AFLAC | WORKFORCES REPORT 2014 is the year for voluntary benefits

10 AFLAC | WORKFORCES REPORT Employees concerned about rising costs 86% believe the expenses they are responsible for will continue to rise Only 16% feel their benefits package meets the needs of their family 76% want more benefits options 35% are just SOMEWHAT SATISFIED with benefits; 11% NOT AT ALL satisfied Workers Not Feeling Protected

11 AFLAC | WORKFORCES REPORT A robust benefits offering no longer stops with the “usual suspects”

12 AFLAC | WORKFORCES REPORT Desire for voluntary benefits 63% of employees today see a need for voluntary insurance 76%: Because of increasing medical costs 51%: Because of changes due to reform 66%: Because of rising coverage costs

13 AFLAC | WORKFORCES REPORT What is voluntary insurance? Complements major medical insurance Designed to help pay for out-of-pocket expenses Policies include accident, disability, cancer, hospital, critical illness and many more

14 AFLAC | WORKFORCES REPORT Voluntary polices = Cash benefits Aflac’s policies pay policyholders directly for costs associated with a covered serious illness, injury or loss Cash benefits can be used for rent, gas, groceries, child care or any other out-of-pocket expenses

15 AFLAC | WORKFORCES REPORT Brokers seeing advantages of voluntary insurance Brokers who offer voluntary are 35% more likely to be increasing the number of their clients Brokers who offer voluntary are 12% more likely to be maintaining and/or increasing sales 64% say they offer voluntary to satisfy needs of their clients’ employees

16 AFLAC | WORKFORCES REPORT The voluntary advantage

17 AFLAC | WORKFORCES REPORT The Pitch: Everyone wins with voluntary Benefits impact workers and the bottom line Cost-effective way to offer employees more protection Additional revenue stream for brokers Bottom line: Good business for all

18 AFLAC | WORKFORCES REPORT Benefits options are important for recruitment and retention 85% of workers say their benefits package is at least somewhat influential on their overall job satisfaction 63% say a benefits package is important to their work productivity

19 AFLAC | WORKFORCES REPORT Voluntary benefits affect workers’ job satisfaction 23% of employees are enrolled in voluntary benefits programs +19% less likely to look for a new job +38% more likely to be satisfied with their benefits programs +18% more likely to be extremely/very satisfied with their jobs

20 AFLAC | WORKFORCES REPORT Impact of voluntary benefits Have more than $1,000 in savings Have peace of mind Health insurance is important part of financial plan Have a financial plan Confident in financial future

21 AFLAC | WORKFORCES REPORT Employees enrolled in voluntary feel more confident A majority of employees name “personal financial issues” as the No. 1 non-work-related issue distracting them while on the clock Those enrolled in voluntary are 10% more likely to have peace-of-mind

22 AFLAC | WORKFORCES REPORT Benefits: Best-in-class companies Source: 2011 Employer Survey on Purchasing Value in Health Care Report by Towers Watson

23 AFLAC | WORKFORCES REPORT Providing a wide range of benefits doesn’t have to cost a dime

24 AFLAC | WORKFORCES REPORT Looking forward

25 AFLAC | WORKFORCES REPORT Employers are looking to brokers for guidance

26 AFLAC | WORKFORCES REPORT 85% satisfaction 78% decision to leave 73% refer a friend 83% loyalty Voluntary matters because benefits matter INFLUENCE OF BENEFITS PACKAGE

27 AFLAC | WORKFORCES REPORT In conclusion… Employers are taking cost-cutting measures Employees feel financially unprotected as health care costs are shifted to them Brokers need to balance clients’ goals and employee needs The solution is voluntary benefits

28 AFLAC | WORKFORCES REPORT THANK YOU