April 23 (Bloomberg) -- Aflac Inc., the world's largest seller of supplemental health insurance, said profit rose 14 percent as sales advanced in Japan, and predicted full-year results will come in at the high end of its previous forecast.

First-quarter net income advanced to $474 million, or 98 cents a share, from $416 million, or 84 cents, a year earlier, the Columbus, Georgia-based company said in a release. Revenue rose 13 percent to $4.3 billion.

Profit before investment losses was 98 cents a share, compared with the consensus 96-cents estimate of 16 analysts surveyed by Bloomberg.

Aflac Chief Executive Officer Dan Amos, bolstered by sales in Japan, said operating income will increase by 14 percent to 15 percent this year, up from 13 percent to 14 percent. In Japan, which makes up three-quarters of revenue, sales of medical and cancer insurance are on the rise, the company said.

``Aflac's been doing business in Japan for a very long time,'' Friedman, Billings, Ramsey & Co. analyst Randy Binner said in an interview before the earnings were released. The company has ``a very strong track record of dealing with these kind of procedural and regulatory problems'' in Japan, he said.

Amos said at a conference in February that sales in Japan could be ``slow'' through March. Banks that distribute Aflac products have been ``overly conservative,'' with some requiring customers return to the bank three times before agreeing to sell a policy, Morgan Stanley analyst Nigel Dally said in a research note issued April 1.

Slow in Japan

Income from premiums in Japan climbed 18 percent to $2.6 billion, Aflac said. Investment income rose 14 percent to $496 million. New sales in Japan increased 5 percent to $264 million in the first quarter, the statement said. Policies sold through banks made up only 1 percent of total sales for the quarter, Aflac said.

``Sales in Japan were a highlight,'' said Fox-Pitt Kelton Cochran Caronia Waller analyst Mark Finkelstein in an interview. Bank sales are ``something that should build over time'' as banks in Japan ``familiarize themselves with the product.''

The company said 90 banks had agreed to sell Aflac's policies, which supplement work and government-sponsored plans for cancer, eye care and other needs, by the beginning of April.

New sales in Japan fell 10.6 percent in the first quarter of 2007 and Aflac made a distribution agreement with the 24,000- branch Japan Post Network Co. in November to foster growth. A timetable for sales through Japan Post hasn't yet been established, Amos said at a conference in March.

`U.S. Opportunities'

U.S. premium income rose 9.3 percent to $1.1 billion from $961 million, and net investment income rose 1.3 percent to $123 million, the company said in the statement. Total revenue from the U.S. rose 8.4 percent to $1.2 billion.

``Long term, we really like the U.S. opportunities,'' Binner said before the earnings were released. The U.S. was an ``underpenetrated'' market for the insurer, he said, and the worsening economy could be good for domestic sales.

Amos said that an 8 percent to 12 percent U.S. sales increase for 2008 was ``attainable.'' New sales advanced less than half a percent this quarter from the earlier year, Aflac said.

``Five, ten years ago, it used to be you just put a new duck ad on TV and the stock would go up,'' UBS AB analyst Andrew Kligerman said in an interview before earnings were released. ``The sales people are going to have to work a lot harder to get the year-over-year figures that investors have come to expect.''

Aflac fell 73 cents, or 1.1 percent, to $65.08 at 4:15 p.m. in New York Stock Exchange composite trading and rose to $66 in extended trading. The stock advanced 3.91 percent this year, making it the fourth-best performing stock in the KBW Insurance Index.

(The company will hold a conference call at 9 a.m. on April 24 to discuss the results. To participate, go to http:///www.aflac.com and click on the Investors page.)

To contact the reporter on this story: Linda Shen in New York at Lshen21@bloomberg.net

Last Updated: April 23, 2008 19:24 EDT