Aflac Inc SWOT & PESTLE Analysis

Strength

1. Leading supplemental insurance provider in US and Japan: The company was founded in 1955 and has continued till date to provide the best services to the customers and has been able to gain their trust. It has been serving people for more than six decades and has helped more than 50 million people in the US and Japan. Aflac is known for its commitment to provide customers the confidence that comes from knowing that they have assistance in being prepared for whatever life brings. It has maintained its position of paying claims fairly and promptly and thus helping the customers when needed for eligible claims. Aflac has set a class apart from life insurance peers and carved its own niche. Looking through a product lens, the company does not sell many commodified life policies. By and large its underwriting is tied to supplemental benefits policies for specific diseases like cancer. The US based insurer currently underwrites around 80% of all cancer policies in Japan. With Aflac weaving what was considered ancillary business for many life insurers and turning it into the firm's core product, it has a pricing leverage over its peers, allowing it to price policies cheaper and still save substantial underwriting margins.

2. Consistent long-term growth strategy: Aflac has maintained a straightforward and consistent growth strategy in US and Japan for many years and it has worked very well for the company. Aflac develops relevant supplemental insurance products and then goes on to sell them through its expanded distribution channels. Few of its relevant products include protection against rising co-pays, high deductibles and other out of pocket expenses arising from medical event.. Aflac was one of the flagship firms to offer supplemental insurance in Japan and has attracted a tightly woven customer base. Instead of roping in customers through the pricey agent route, by and large Aflac sells its products directly to organizations as an added perk on the benefit lineup for their employees at no additional expense. This low-cost marketing strategy permits Aflac to price its policies at rates similar to or lower than competitors' while still saving a significant underwriting margin. Voluntary supplemental benefits aids in incentivizing client loyalty for the firm. As these benefits often represent a much smaller purchase and are often deducted through policyholders' paychecks, holders are much less likely to shop around for other policies based on price.

Weakness

Opportunity

Threats

Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Proactive energy and environmental stewardship: Aflac has been committed towards helping make communities, cities and earth a better place and has always strived towards it. The company identifies and evaluates risks including climate change, natural disasters, epidemics etc. based on financial impact and probability. Aflac U.S is ISO 14000 certified in its operations. It also became the flagship US insurance firm to be ISO 50001 energy management system registered representing the latest best-practice in energy management. In 2019, it was again recertified with zero nonconformance issues. 86% of its eligible space has earned the Environmental Protection Agency's Energy Star Rating.

2. Reduction in energy, carbon emission and waste disposal: Aflac has incorporated sustained and deliberate energy-saving measures and has reduced its total electricity consumption for real estate by 3.5% a year. Since 2007, it has reduced electricity consumption in the US by over 50% KWH per square foot which has helped it in saving nearly $18 million in expenses. The absolute scope 1 emissions in the US has also reduced more than 60% since 2007 baseline. Aflac Japan has increased the ratio of hybrid cars used by sales employees, reducing gasoline consumption by 34% since 2016. The waste reduction and recycling strategy for Aflac U.S. diverted more than 900,000 lbs. of paper waste from the landfill in 2018. In Japan, recycled plastics are used for power generation and recycled paper is reused, earning Aflac Japan a 65% recycling rate.