Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers various voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans, and annuities in Japan. The Aflac U.S. segment provides products designed to protect individuals from depletion of assets comprising accident, cancer, critical illness/care, hospital indemnity, fixed-benefit dental, and vision care plans; and loss-of-income products, such as life and short-term disability plans in the United States. The company sells its products through sales associates and brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies. Aflac Incorporated was founded in 1955 and is headquartered in Columbus, Georgia.
Business Analysis of Aflac
The Insurance Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Aflac compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Aflac to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Aflac with an interactive chart.
- Revenue Growth: Aflac reported a revenue growth of 8.1% year-on-year during 2016. Diversified Insurance Industry grew at 0.6% in the same period
- COGS share of Revenues: As a percentage of revenue, Aflac spent 57.3% of its total revenues on COGS. Diversified Insurance industry average (COGS share of revenue) in the same period was 54.2%
- R&D share of Revenues: Aflac R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Aflac spent 18.5% of its total revenues on Sales, Marketing, and General Administration (SG&A). Diversified Insurance industry average SG&A spending in the same period was 21.6%
- Inventory share of Revenues: Aflac Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: As a percentage of revenue, Aflac invested 2.3% of its total revenues on Accounts Payable (A/P) Diversified Insurance industry average Accounts Payable investment in the same period was 12.0%
- Accounts Receivable share of Revenues: As a percentage of revenue, Aflac invested 3.0% of its total revenues on Accounts Receivable (A/R). Diversified Insurance industry average Accounts Receivable investment in the same period was 37.0%
- PP&E share of Revenues: As a percentage of revenue, Aflac invested 1.9% of its total revenues on Property, Plants, and Equipments (PP&E). Diversified Insurance industry average PPE investment in the same period was 3.4%
- Intangibles share of Revenues: Aflac Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: Aflac Net Margins in the year 2016 were 11.8%. Diversified Insurance industry average Net Margins in the same period were 10.2%
Sector and Industry Association of Aflac
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Aflac is associated with Financials Sector Group, Insurance Sector, and Diversified Insurance Industry.
Insurance sector is comprised of the following industries: Life Insurance; Property & Casualty Insurance; Surety & Title Insurance; Insurance Brokerage; Diversified Insurance. The definitions for each of the industries is as follows:
- Life Insurance industry includes companies engaged principally in life insurance.
- Property & Casualty Insurance industry includes companies engaged principally in accident, fire, automotive, marine, malpractice and other classes of non-life insurance.
- Surety & Title Insurance industry includes companies providing title & surety insurance.
- Insurance Brokerage industry includes insurance brokers and agencies.
- Diversified Insurance industry includes companies with life, health, property & casualty, and reinsurance interests, none of which predominates.
Industry Ranking of Aflac
With $22.6 billion revenues, Aflac ranked number 1 of all the companies in the US Diversified Insurance industry. There were a total of 7 public companies in the US Diversified Insurance industry that had revenues greater than $50 million during 2016.
The top companies in the US Diversified Insurance industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.