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AFLAC CEO: Excluding Weakness In Yen, We're Doing Quite Well

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AFLAC Incorporated (NYSE: AFL) was severely impacted by the yen/dollar exchange rate in the first quarter, which led the company to post worse than expected results on Tuesday post the market closing.

Dan Amos, Aflac chairman & CEO, was on CNBC Wednesday to discuss the impact of the weakness of the Yen on the company’s results.

Excluding The Yen

“We saw the yen weaken significantly in the fourth quarter and of course it was in the first quarter,” Amos said. “We collect all of our money in yen, we pay all the clients in yen and then it’s the translation when it actually takes place in terms of how our operation works. So we always talk about, even when the yen benefits us, is to look at it excluding the yen and we were right on target in terms of our consensus estimates.”

He continued, “We really had very little control over the yen or currency, so we basically just run the operation that way and it’s doing quite well. Japan Post, which is the largest distribution system in Japan has started selling for us, although I can’t go to specifics, they are doing very well and continue to do well. So the Japanese Market is been very good for us and we expect it to continue.”

The First Sector

Amos was asked what happened at what the company calls the "first sector" which led to sales falling by 30 percent. He replied, “Well with low interest rate environment we actually put caps on how much you could sell because we are really in that third sector and I think it was actually up 121 percent for the quarter.”

“So, it's been very strong, it’s been due to a new product we introduced, but frankly the first sector at this level we make a decent profit margin, but not anywhere near like we do with the third sector,” Amos concluded.

 

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Posted-In: CNBC Dan AmosMedia