Aflac Tops Estimates on First Japan Sales Gain in Seven QuartersJing Cao
Aflac Inc., the largest seller of supplemental health insurance, posted fourth-quarter profit that beat analysts’ estimates as sales in Japan increased.
Net income rose 4.1 percent to $703 million, or $1.57 a share, from $675 million, or $1.45, a year earlier, the Columbus, Georgia-based insurer said Tuesday in a statement. Operating profit, which excludes some investing results, was $1.29 a share, topping the $1.28 average estimate of 18 analysts surveyed by Bloomberg.
Chief Executive Officer Dan Amos, 63, has worked to reverse slumps in both the U.S. and in Japan, where there was a decline in sales through banks. He has increased staff, expanded product offerings and forged marketing partnerships, including one to offer coverage through Japan Post offices.
“We continued to build on our partnership with Japan Post throughout the year, expanding the number of postal outlets and their agents selling our cancer products,” Amos said in the statement.
New annualized premium sales in Japan rose 1.5 percent to 33.4 billion yen, or $292 million, the first increase in seven quarters. Sales of supplemental health insurance, which includes cancer and medical products, climbed 29 percent, compared with a 16 percent gain a year earlier.
Aflac earns three-quarters of its profit in Japan and converts results from the country’s currency for reporting purposes. The yen weakened more than 8 percent in the fourth quarter to 119.78 against the dollar on Dec. 31, compared with 105.31 a year earlier.
The insurer, which uses a duck in its advertisements, rose 1.6 percent to $59.09 at 4:07 p.m. in New York. The shares declined 3.9 percent in the past 12 months.
Aflac expects supplemental health insurance sales in Japan to increase about 15 percent for the first nine months of the year, Amos said in the statement.
Net investment gains increased to $83 million in the quarter from $6 million a year earlier, according to the statement. Full-year profit was $2.95 billion, or $6.50 a share, compared with $3.16 billion, or $6.76, in 2013.