Distribution and Consumer Value Issues Allan O’Bryant Aflac International

2 Road Map Aflac Japan Today Corporate Agency System Changing Customer Needs Evolving Distribution Systems Lessons Learned

3 No. 1 Life Insurer in Japan Policies in Force Aflac = No. 1

4 Comparison of Premium Income Growth Aflac Industry Source: Japan Institute of Life Insurance (FSA Basis, 3/00=100)

5 Corporate Agency System Aflac Parent Company Employees of Parent & Affiliated Companies Corporate Agency

6 Shrinking Worksite Market Decrease in number of employees due to corporate restructuring Shift in employee preference in buying insurance to outside the worksite Need for privacy when discussing insurance needs

7 Product Broadening New Business in Annualized Premium

8 Sales by Agency Type Individual Corporate Tie- Up

9 Surrender and Lapse Rates Life Industry Aflac Source: Japan Institute of Life Insurance (FSA Basis)

10 Paid Claims

11 Days Required to Pay Claims Less than 2 days on average

12 Average Premium per Policy Average Premium Aflac \52,591 Top 9 life insures\154,635 Life Industry\135,972 Source: Life Insurance Association of Japan

13 Evolving Distribution Systems Internet Call Center & Telemarketing Insurance Service Shops Automated Business Writing (e-App)

14 Customer Voice Customer comments are registered into an internally shared DB. Customer comments are reviewed by Customer Voice Committee and corrective actions are taken. Critical issues are shared with appropriate management.

15 Lessons Learned Support the existing distribution channels when introducing a new approach. Must meet customer needs.