Aflac Insurance Company overview and operations

¶ … Aflac Corporation primarily focuses on suplemental health and life insurance within the United States and Japan, where they have a dominant market share. The company was founded in 1955 by the Amos brothers in Columbus, Georgia and has since then grown to become one of the most successful insurance brokers in the nation. Aflac stands for the American Family Life Assurance Company, the acronym was only formally adopted as the company name in 1990. Although primarily known for its accident insurance due to their strong marketing scheme, Aflac offers eight different primary types of insurance, with a specialty in cancer and specified diseases insurance. One of the strongest aspects of Aflac's business model was to focus sales on worksite settings, in 2003, more than 98% of the company's policies within the domestic arena were issued on a payroll deduction basis. Currently Aflac's overall net assets is more than 59 billion dollars, making it an industry leader, with more than 40 million policyholders worldwide.

As an international company, Aflac's two primary competitors are within the supplemental insurance industry within the United States and Japan. These two competitors are Asahi Mutual Life Insurance Company and the Daido Life Insurance Company. Asahi is the world's largest supplemental insurance provider, with over 18,811 employees, easily dwarfing Aflac's 7,704 employees as of 2006. Asahi focuses the majority of their market share within Asia and specifically Japan, however it has expanded overseas to the United States. However, Aflac's overall business model of using off the book sales force drives more revenue than Asahi, with more than 14.8 billion dollars in revenue in 2006 compared to Asahi's 9.85 billion. Similarly, Daido is another of Aflac's major competitors, it does business primarily within Asia and Europe with subsidiaries within the United States. Daido has an overall revenue of 9.2 billion dollars with substantial space for growth within the next few years. Positioned against its top two competitors, Aflac is clearly the leader within the supplemental insurance industry. However, it is still behind overall insurance industry leaders such as Fidelity, Metlife, and other Fortune 500 companies.

Overall, Aflac operates in a very niche specific industry, the accident and health insurance sector. By market cap they are double the size of their next competitor and dominate the industry as a whole. However, due to expansion by major insurance players into this market space over the past two years, overall Aflac market share has declined and is being continually challenged by both Metlife and Fidelity. The market in general has been on a downward decline in the past two quarters due to emerging data on decline within policy holders. However, Aflac has maintained its position atop the industry and continues to build on their product through strong sales and distribution channels.