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AFLACs Business Model

• Two major markets
• Two functional currencies
• Two operating management teams
• One business model
• Centralized executive management team
• Provides guidance on objectives
• Consults on operating tactics
• Monitors risks assumed

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Minimizing Insurance Risk

• Product design
• Protection oriented
• Fixed benefits
• Field / consumer input
• Underwriting
• Simplified underwriting
• Payroll groups / employees
• Avoid over-insurance

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AFLACs Products
AFLACs insurance products pay cash directly to
consumers to help cover expenses such as

• Deductibles
• Copayments
• Non-covered medical expenses
• Non-medical expenses, including travel, food
  lodging, child care, and lost wages

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AFLAC's Insurance Operations(March 31, 2004)

• AFLAC U.S. - established 1955
• 57,670 licensed sales associates
• 8.9 million policies in force
• 3.1 billion of annualized premiums in force

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AFLAC's Insurance Operations(March 31, 2004)

• AFLAC U.S. - established 1955
• 57,670 licensed sales associates
• 8.9 million policies in force
• 3.1 billion of annualized premiums in force
• AFLAC Japan - established 1974
• 65,885 licensed sales associates
• 23.4 million policies in force
• 8.7 billion of annualized premiums in force

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Exited Markets

• Australia
• Canada
• England
• Germany
• Hong Kong
• Italy
• Korea
• Taiwan
• Thailand

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Lessons Learned

• Choose markets with consumer need for product

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Lessons Learned

• Choose markets with consumer need for product
• Choose markets where effective distribution can
  be developed or acquired

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Lessons Learned

• Choose markets with consumer need for product
• Choose markets where effective distribution can
  be developed or acquired
• Choose markets were regulatory, political and
  cultural climates support sound business
  practices

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Lessons Learned

• Choose markets with consumer need for product
• Choose markets where effective distribution can
  be developed or acquired
• Choose markets were regulatory, political and
  cultural climates support sound business
  practices
• Deploy capital in markets with the best prospects
  for profitable growth

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Managing AFLAC's Capital Resources
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AFLAC Incorporated Capitalization(In Millions)
3/04
2002
2003

• Total long-term debt 1,312 1,409 1,423
• Shareholders equity 3,978 4,330 4,505
• Total cap. 5,290 5,739 5,928
• Debt to total capitalization 24.8
  24.6 24.0

Excludes unrealized gains on investment
securities and derivatives
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Yen-Hedged Net-Asset Position
2003
3/04

• In Yen (billions)
• AFLAC Japan net assets 499.3 527.4
• Less denom. net assets 312.5 320.4
• Denom. net assets in Japan 186.8 207.0
• Denom. net liabilities (parent)
  (155.6) (155.6)
• Consol. denom. net assets 31.2 51.4
• In Dollars (millions)
• AFLAC Japan net assets 4,661 4,990
• Less denom. net assets 2,917 3,031
• Denom. net assets in Japan 1,744 1,954
• Denom. net liabilities (parent)
  (1,453) (1,477)
• Consol. denom. net assets 291
  482

Includes unrealized gains on investment
securities
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Capital Adequacy Ratios(In Millions, Except
Ratios)
2001
2002
2003

• Total adjusted capital 2,318 2,290 2,428
  
• RBC ratios
• AFLAC 495 401 361
• AFLAC New York 224 175 189
• Solvency margin 1,225 1,292 1,132

Preliminary
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2004 Estimated Flow of Funds(In Millions)
AFLAC Incorporated
Dividend 447 Mgt. fees 9 Total 456
AFLAC U.S.
Mgt. fees 25
Profit repatriation 254 Allocated
expenses 25 Total 279
AFLAC Japan (Branch of AFLAC U.S.)
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Profit Repatriation to AFLAC U.S.
Dollars in Millions
Yen in Billions


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Deploying Excess Capital(In Millions)
489
458
445

320
292
2000
2001
2002
2003
1999
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AFLAC's Financial Performance
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Operating Earnings Per Share(Diluted Basis)
1.89

1.56
1.34
1.20
1.00
.57
2001
2002
2000
1999
2003
3/04
Yen impact .06 .02 (.07) (.02) .06
.03 inc. ex. 20.5 18.0 17.5 17.9
17.3 17.4
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AFLACs EPS Objectives

• Increase operating earnings per diluted share 17
  in 2004 excluding the impact of currency
  translation
• Increase operating earnings per diluted share 15
  in 2005 and 2006 excluding the impact of currency
  translation

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Operating Returns on Average Shareholders Equity

26.7
23.8
21.9
21.7
21.3
20.9
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Comparative Investment Returns (As of 12/31/03)
Compound Annual Returns
5 Year
1 Year
10 Year
AFLAC 23.6 11.3 21.2 SP Life Health
Index 6.4 (.8) 27.0 SP 500 Index 11.0 (.6) 28.6
Includes reinvested cash dividends
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