There aren’t many CEOs who can confidently say they bet their company’s reputation on a duck. Yet that’s precisely what Dan Amos, chairman, president, and CEO of supplemental insurance giant Aflac (AFL), did almost 25 years ago.
Amos’s unconventional and risky bet to test out an arguably annoying ad campaign involving a quacking duck not only made Aflac an international household name but also changed the advertising game for insurers.
“The likability went through the roof afterward,” Amos told Yahoo Finance in an exclusive interview at the company’s Columbus, Ga., headquarters. “And so, in a matter of three years, we doubled our sales in the United States.”
It’s that kind of sales growth that has attracted investors to Aflac for decades. Including reinvested cash dividends — something the company is known for — Aflac has returned more than 15,000% to shareholders over the last 33 years. Under Amos’s tenure, shares of Aflac have risen from less than a dollar to above $80.
Aflac’s stock price has continued to hit record highs in 2024, yet questions remain about Aflac’s ability to unlock the next catalyst of revenue growth.
The company’s total annual revenue has been on the decline since 2019, and it faces a challenging sales environment, the potential for artificial intelligence to disrupt the industry, and demographic challenges in its largest market, Japan.
“Let me tell you, the last person in the whole world I would’ve expected to have [technology] affect them would have been taxi cab drivers, and Uber almost put them out of business,” said Amos, who is the fifth-longest-serving CEO in the Fortune 500 and the second-longest-serving CEO in the Fortune 200 behind Berkshire Hathaway’s Warren Buffett. “Now they’ve figured out how to do it. But the point is, don’t think you’re not vulnerable to changes.”
Aflac’s ‘golden goose’ and success in Japan
Amos calls the Aflac duck his “golden goose.” In 2000, two advertising executives came up with the idea to mock the company’s name, and Amos took a chance on a $1 million ad. Previously, he said, the company hadn’t spent more than $400,000 on a commercial.
The commercial catapulted the company’s brand recognition from 11% to nearly 94% over 14 years, according to Aflac. While other insurance companies have adopted similar humorous advertising tactics, Amos noted that the company is able to spend a fraction of what other casualty insurers spend on advertising each year.
But Aflac’s success began long before the duck made its debut. Originally known as the American Family Life Assurance Company of Columbus, the company adopted the acronym Aflac in 1989, a year before Amos became CEO, following the death of his uncle, John Amos.
Amos inherited a company that had quietly expanded its footprint outside the US, specifically in Japan, since 1974, when a trip by Amos’s uncle to the Osaka World Fair led to the company becoming licensed to sell health insurance in the country. Today, Aflac’s medical, life, and death coverage benefits are used by one in four Japanese households, according to the company.
However, reliance on the Japanese market comes with a demographic squeeze at both ends. By the year 2050, the United Nations predicts the share of people 65 and older in China and South Korea will overtake that of Japan. Add to that a declining birth rate, and this presents a dilemma for Aflac.
The solution, according to Amos, is the company’s hybrid policy approach — a combination of cancer insurance and life insurance to attract younger consumers earlier so they avoid financial hardships later. It’s part of a sales campaign blitz Aflac launched recently to coincide with the company’s 50th anniversary of doing business in Japan.
There’s also the geographical risk of relying on Japan for the lion’s share of Aflac’s revenue. Amos noted that he is still worried after the Tohoku earthquake and tsunami of 2011 claimed more than 18,000 lives and caused major damage to the Fukushima Daiichi nuclear power station.
A human approach to health insurance
Aflac is also facing a future healthcare industry that is poised to change more in the next three years than it has in the previous 30, driven in large part by the industry’s COVID-induced shift away from door-to-door sales and handwritten paperwork to digitization and, now, generative AI.
Despite advances, Amos doesn’t foresee a time when AI will replace the human connection between customers and Aflac employees. While other US companies outsource call centers, Amos has doubled down on keeping Aflac customers connected close to home, allowing for regular one-on-one interactions with his employees, who Amos said are the heart and soul of Aflac.
“From an administrative perspective, our most talented, important people are in the call center, because they’re the line between the company and the customer or the agent and the company,” Amos said. “And so it’s very important that we have positive attitudes, help them do whatever we need to do to make sure it works.”
“I think the human touch is something that is very important for the growth of the company,” he added, “because all we sell is a promise on a piece of paper.”
But even with his old-school approach, Amos wholeheartedly embraces change. Rather than seeing developments in generative AI and medical advancements from COVID mRNA vaccines as a threat to supplemental insurance, Amos sees them as an opportunity.
“Well, I don’t know of anybody that’s more excited about our future than I am and what I see ahead because people, through healthcare, are finding cures,” Amos said. “These cures cost money. And so you need the additional coverage to help cover those costs.”
At the same time, after 50 years working at Aflac, from a 19-year-old college student to CEO, Amos still has a few things that keep him up at night.
“I’ve got to worry about tsunamis in Japan,” Amos said. “I worry about interest rates and what’s going to happen in that regard. But am I frightened about them? No. We manage risk. That’s what we do for a living. … So I’m not nervous about it, but I worry about it all. And if I didn’t, I wouldn’t be a very good risk manager.”
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