★How Aflac built an empire on Japan’s unspeakable nightmare
The overwhelming majority of its profits—some 75% of Aflac’s pre-tax earnings in 2012—come from Japan and have done so for years. The company’s position in Japan has helped Aflac consistently outpace the industry average in profit growth. And the cornerstone of Aflac’s Japan business is one incredibly bleak-sounding product line: Cancer insurance.
If your business thrived on a healthy fear of cancer, there were few better places to be than Japan in the 1970s. Cancer was in the midst of a decades long climb that would eventually make it Japan’s top killer in 1981. It remains the number one cause of death in Japan.
In Japan, there was plenty of fear. There was also plenty of demand for insurance. (It remains one of the world’s largest insurance markets.) And there wasn’t a lot of something else: Competition.
It was seen as a small concession to the US, which had been hammering Japan on opening its rather closed economy. In an interview with the Atlanta Journal Constitution back in 2000, an insurance industry analyst summed up the view of Japanese policy makers: “Nobody is going to buy dreaded disease insurance, so let’s give it to the Americans. Let them have it.”
But they did buy it. Oh boy, did they, as some of Japan’s largest corporations gave their stamp of approval to Aflac’s offerings.
And the list of participating companies reads like a roll-call of Japan Inc.—Hitachi, Sony, Toyota, Nissan, Dai-Ichi Kangyo Bank, Sumitomo Bank, Mitsui, Mitsubishi and thousands of others.