Aflac's Japanese unit could be the insurance protection it needs if the U.S. slips into recession, as many economists are predicting.
When you meet Aflac’s CEO Dan Amos, you can count on him telling you three important facts about the insurance giant: It was his idea to use a duck in a television ad campaign that became so popular, turning Aflac into a household name. In his nearly 30 years of running Aflac, revenues surged from $2 billion in 1990 when he took over as CEO to $22 billion today. And he is proud to point out that Aflac has never missed an annual earnings projection in all those years.
So not surprisingly, when Aflac reported its third quarter results recently, the company delivered on its promise. Yes, the numbers were weak, but earnings came in higher than Wall Street analysts expected. And even though revenues fell slightly, they were still in line with the consensus estimate.
Amos admits that Alfac’s revenues for 2019 will be “flat to down slightly” for the year—a dramatic change from the record revenues Aflac posted a year ago.
Part of the blame goes to the company’s Japanese partner, which accounts for 75 percent of Aflac’s revenues. The so-called Japan Post Holdings unit is under investigation for improper sales of Aflac insurance products. Aflac conducted its own review of more than one million policies, and Amos has been reassured by the findings.
“We only found 70 policies that were any issue,” Amos explains. “So basically we’ve taken care of that, and we’re moving on.”
There may also be a silver lining despite the sales scandal. That Japanese unit could be the insurance protection Aflac needs if the U.S. slips into recession, as many economists are predicting.
“Remember 75% of our business is in Japan,” Amos says with confidence. “We ought to be okay. It worries us a little bit. We’ve been through recessions before. In 30 years I’ve seen several. So I know what to do when that takes place.”
Watch the video above for more.
—Would the stock market crash with a Warren presidency? Here’s what history says
—Spotify saved the music industry. Now what?
—ClassPass turns to corporate wellness for growth
—Women from Twitter, Facebook, and Uber are teaming up to fund Silicon Valley’s future
—The shrinking middle class: by the numbers
Subscribe to Fortune’s Eye on A.I. newsletter, where artificial intelligence meets industry.
