Through the case Through the case study, study,

we try to explain the we try to explain the possibility of possibility of

Aflac investing in Aflac investing in China.China.

Members Introduction

• 申宏威• 宫丽芬

• 许 卉• 王若楠

Background

Conclusion

Japan

China

Contents

Background• Cancer insurance• Aflac

Health insurance in Japan• Background• Key factors

What factors make Aflac to win in Japan?

Health insurance in China• Background• Fierce Competition

The difference between the markets of China and Japan.

Conclusion

Cancer Insurance Background

Medical Costs Standard health insurance covers most medical costs.

ReimbursementThe standard insurance often results in financial hardship for patients and their families.

Standard Insurance

Cancer Insurance

Nonmedical Costs The cancer insurance covers the nonmedical costs (such as lost wages, deductibles, copayments, and travel to and from caregivers).

Cash Benefits The insurers, upon diagnosis of cancer, pay cash benefits for items that usually require out-of-pocket expenditures and are distinct from reimbursements made by traditional health insurance.

SupplementAs a supplement, the cancer insurance fill the gap in coverage.

Aflac BackgroundAflac is one of Fortune 500 company.

In the United States, Aflac underwrites a range of insurance policies, but is perhaps best known for its payroll deduction insurance coverage, which pay cash benefits when a policyholder has a covered accident or illness.

In Japan, the company is the second largest insurer overall and the largest life insurer, and is also well known for its supplemental medical policies.

The History of Aflac

Premium Income-Japan versus US

What factors led Aflac to success of cancer insurance in Japan?

Aflac in Japan (2009)

Number one life insurance company in terms of individual policies in force

The largest foreign insurer in terms of premium income. Ranks first in the number of individual policies in force among all of

Japan's life insurers The fifth most profitable foreign company in any industry

Background

1974-1984 The first company sells cancer insurance in Japan

1985-1994 Diversification of the product lineup

1995-2004 Expansion of product-line and sales channels

Product: Tailored for the market

Designed in the context of the Japanese national health system Segment Market: On the ground of aging population social, Aflac

researched and developed specific policies to meet the needs of the aging population.

Payment options selectable

Promotion: Reputation > Advertising

1, Finance situation: Aflac is rated AA- by Standard & Poor, AA- by Fitch Ratings, and Aa2

(Excellent) by Moody’s for financial strength. A.M. Best rates Aflac as A+ (Superior) for financial strength and operating performance.

Solvency margin 773.6% (March 2009)

2, Strong CSR:

Place: Smart distributionSales network: corporate agencies, independent corporate agencies,

and individual agencies to reach different customer groups

3,694 employees （ end of March, 2009 ） 82 branch offices （ April, 2009 ） 18,682 associates （ end of March, 2009 ）

Payroll-deduction basis; electronic transfers from bank accounts.

More than 39,600 payroll accounts representing 89% of the companies listed on the Tokyo Stock Exchange

Employers and employees at 157,600 small businesses

In Post Offices from October 2008.

Efficient, low Cost Operation

Low Cost

Low Price

Price: Best Price Always

1, Reliance on agents: Only get commission after gaining a new customer

2, Less advertisements: related to the distribution strategy

3, Reasonable profit rate

Key Strategies in Japan lead toCore CompetitivenessA well-timed entering Japan market, with the consciousness

of insurance is strong in Japan.

Made a valuable strategic alliance with local partners, thrived in a deregulated environment.

Specific and focused strategy and products, created a vibrant new niche market.

Introduced innovative business methods, unique know-how.

Long commitment : Persisted in its commitment to Japan and meets the requirements of the society.

Is there any opportunity in China?

逻辑结构逻辑结构

了解外部环境状况了解外部环境状况 明晰公司内部优势及劣势明晰公司内部优势及劣势

外部环境外部环境分析分析

内部资源内部资源分析分析

•自 99 年起，商业健康险业务每年增长 52%•2008 年健康险市场容量高达3000 亿

•2008 年，人均 GDP 超过3000 美元

1999

2002

2005

2008text in

here

52%

E: 经济环境中国加速进入老年化社会：至 2040 年，我们人口老龄化将达到 28% 超过美国

人们保险意识淡薄：2007 年一份调查显示，只有 32% 的人购买了商业保险

S: 社会环境

外部环境外部环境

就保险公司而言，商业健康险发展受税法等的制约就个人而言，法律空白导致对投保人利益保护不力

5%

中国中国 美国美国

无无

5%5%减减免免

1%1%1515%%

个人所得税

税率

成本

P: 政治环境

对保险公司的反面进作用

对保险公司的反面进作用

现代计算机技术的发展促进保险业产品的创新服务质量的提高

整个行业竞争更加激烈单个保险公司很难长时间保有某个产品优势

T: 科技环境外部环境外部环境

内资前六家公司占据 85% 的市场份额， 外资仅占 4.9%

进入中国满 7 年的外资公司中，仅 2 家盈利

政府监管严格与内资公司竞争激烈新允许进入的银行等加入更恶化了竞争环

境

低弱弱外资

高强强内资

类别类别 资本资本 渠道渠道 消费者认可度消费者认可度

9% 4.94% 4%

20072007 200820081Q

20091Q

2009

外资公司竞争环境外部环境外部环境

拳头产品面临同类及替代品众多的威胁

产品 品牌

其他渠道

Please write down of contents explanation for Business Area.

保险产品的特殊性使得其无法复制已有的高品牌知名度

国内渠道的排他性协议使得开拓渠道困难重重

在日本市场取得的先机优势已不具备

内部资源内部资源

小结小结

竞争激烈，外资公司生计维艰

拥有相当市场容量，然政治环境，人们意识等均需要提高

金融危机造成消费者对外资保险公司信任度急剧下滑

外部环境外部环境

内部资源内部资源

The Difference-between China and Japan产品已经失去行业先发优势

市场环境的不同商业环境不同

社保体系的不同 公司保险商业保险的无缝连接

政治环境不同

成功的低成本营销和品牌推广策略难以复制

Conclusion and Recommendation

Review the Case

Background• Cancer insurance• Aflac

What factors make Aflac to win in Japan?• 5 Points

Health insurance in Japan• Background• Key factors

Health insurance in China• Background• Fierce Competition

The difference between the markets of China and Japan.

Conclusion

Reference

1. 2008 年中国统计年鉴

2. 2008 Annual report for Aflac

3. Cancer Insurance Policies in Japan and the United States By CHARLES L BENNETT, MD, PhD; PETER D. WEINBERG, and JAMIE J. LIEBERMAN, Chicago, Illinois

4. Firm Performance In The Chinese Insurance Industry By Tyler Leverty* Georgia State University, Yijia Lin Georgia State University, Hao Zhou Allianz General Representative Office

Thank You! Time for Q&A.