As we embarked on 2020, we at Aflac were eagerly anticipating a year celebrating an array of significant milestones for the company: first, the 65th anniversary of Aflac’s founding; the Aflac Duck’s 20th anniversary; the 25th anniversary of the Aflac Cancer and Blood Disorders Center of Children’s Healthcare of Atlanta; the 38th consecutive year that Aflac Incorporated has increased the annual dividend to our shareholders; and my 30th year as CEO of Aflac Incorporated. What none of us – at Aflac or elsewhere – expected, was to find ourselves in the midst of a global pandemic in the first quarter of the year.
But, that became the reality. Through sound risk management, agile planning and acting swiftly, Aflac was well positioned to respond when the unthinkable happened: a seemingly unstoppable global pandemic. We acted swiftly in order to safeguard the health and well-being of our workforce, policyholders and communities in both Japan and the United States because, after all, our greatest commitment to our policyholders lies in our promise to be there for them in their time of need … and in order to do that, we knew we had to act quickly. We ensured business continuity through setting up virtual emergency command centers, initiating work-from-home initiatives, enriching benefits relative to COVID-19, and providing financial support to agents and agencies, as well as our communities.
As a result of our extensive presence in Japan and insight from Dr. Barbara Rimer* and other medical experts, we gained early insight into the possible implications of the pandemic as well as guidance, expertise and insight at the Aflac Incorporated Board level. This early insight and already-established business continuity protocols helped us to pivot to more than 95% remote working in the United States and over 70% at times in Japan, ensuring that Aflac would be positioned to deliver to on our promises to our shareholders.
In examining the business impact of the pandemic, clearly the lack of face-to-face opportunities significantly limited our avenues for new sales, which put pressure on our earned premium and revenues, prompting us to pivot to virtual and digital sales methods and accelerate related digital investments. I could not be more proud of Aflac’s workforce and sales force in both countries for their resilience, innovative thinking and actions, and commitment to excellence and ensuring business continuity.
In the face of the pandemic, we reported net earnings per diluted share of $6.67 and adjusted earnings per diluted share of $4.92, excluding the impact of foreign currency**. This latter measure of profitability is one of the principal financial measures used to evaluate management’s performance and allows us to continue fulfilling our purpose as a socially responsible corporation that benefits shareholders and stakeholders alike over the long term. We are continually working on our foundation of sustainable growth, especially related to leveraging these particular strategic areas of focus:
Fortunately, we were prepared as we entered this pandemic in a strong capital liquidity position. At the same time, we were forced to accelerate investments in the growth or our business, balanced by the continuation of capital deployment in the form of share repurchase and dividends. One remarkable achievement we saw in 2020 was the 38th consecutive year of increasing our dividend, and we were proud to be able to continue that long track record even amid the backdrop of a global pandemic.
Throughout this site/report, you will read about some of our many achievements in our environmental, social and governance initiatives, as well as Aflac Incorporated’s financial performance. So much has occurred over the last 30 years, and over the years you have been accustomed to reading our Year in Review, Corporate Social Responsibility Report, and most recently our ESG Report on this site. For 2020, we decided to consolidate these reports into one, Aflac Incorporated’s Business and Sustainability Report, in an effort to make it easier for shareholders, customers and other stakeholders to learn about our efforts alongside the Form 10-K and Proxy Statement. We hope that you will enjoy what you find on the pages of this site and report, as well as future updates.
Chairman and Chief Executive Officer