COLUMBUS, Ga., Jan. 23 /PRNewswire-FirstCall/ -- Aflac Incorporated (NYSE: AFL) today has offered comments on its capital position following the sharp drop in its share price that resulted from an investment firm's research report.

Aflac Chairman and CEO Daniel P. Amos stated: "As we stand today, we remain very confident in our overall business model and our operations. We are equally confident with the quality of our balance sheet and our capital position. For many years we have pursued a consistent investment approach, which we believe is in the best interests of our policyholders and shareholders.

    "That approach has proven to be effective and prudent, and we continue to
believe it will be so in the future. At the end of 2008, 98% of the debt
securities and perpetual debentures that we own were investment grade.  Going
forward, our investment approach will continue to emphasize the purchase and
ownership of securities that best match our policy liabilities and best serve
our policyholders. When we release fourth quarter earnings in just over a
week, we expect to report operating earnings per diluted share that are
consistent with our stated earnings objective of a 15% increase. In addition,
we see no change to our expected 2009 cash dividend payments."

    Further commenting on the company's capital position, Aflac Incorporated
Chief Financial Officer Kriss Cloninger III added, "Although these results are
preliminary, we estimate that our year-end risk-based capital ratio was 425%
to 475%. A primary reason for our current risk-based capital level is the
effect of the stronger yen to the dollar.  Excluding the impact of the
stronger yen, we estimate the risk-based capital ratio would have exceeded
600%.  We estimate our current excess capital position to be approximately
$500 million to $1.0 billion at the end of December 2008.  We believe our
capital position is more than adequate to support our current ratings.  We
continue to expect strong statutory earnings in the future, which we estimate
were $1.5 billion for the full year of 2008.  Accordingly, we do not see a
need for raising additional capital.

    "I think it's also appropriate to comment on the status of the perpetual
debentures, or so-called "hybrid securities" we own.  Based on preliminary
year-end numbers, our holdings of hybrid securities at fair value were $8.1
billion, or approximately 11.8% of our consolidated investment portfolio of
$68.6 billion.  We purchased the hybrid securities from 1993 to 2005. For GAAP
accounting purposes, the perpetual debentures are held in the
available-for-sale category.  As such, they are marked to market and reflected
on the balance sheet at fair value.  By contrast, these perpetual debentures
are carried at amortized cost for statutory accounting purposes.  That means
that the changes in the fair value of these hybrid securities are not included
in, and therefore do not impact, the risk-based capital ratio.

    "As we discussed in our third quarter earnings announcement and conference
call, the Securities and Exchange Commission (SEC) issued a letter on October
14, 2008, to the Financial Accounting Standards Board (FASB) on the topic of
hybrid securities. The SEC's letter noted that due to the debt characteristics
of hybrid securities, a debt impairment model could be used for filings
subsequent to October 14, 2008, until the FASB further addresses whether a
debt or equity impairment approach is most appropriate.  Aflac's debt
impairment approach is primarily based on an assessment of whether it is
highly probable we will receive timely payment of interest and principal,
whereas our equity impairment approach is based on the aging and degree of
unrealized losses. With no pronouncement forthcoming from the FASB, we
continued to apply our debt impairment model to the perpetual debenture
investments as of December 31, 2008.  Pending new guidance from the FASB, we
will continue to use the debt impairment approach.  In addition, for statutory
accounting purposes, we will continue to evaluate our perpetual debenture
holdings using the debt impairment approach, and we do not anticipate that
approach changing."

    The company is set to release fourth quarter 2008 results after the market
closes on February 2, 2009. Aflac Incorporated will webcast its fourth quarter
investor presentation via the "Investors" page of aflac.com at 6:40 p.m. (EST)
on Tuesday, February 3, 2009.

    For more than 50 years, Aflac products have given policyholders the
opportunity to direct cash where it is needed most when a life-interrupting
medical event causes financial challenges. Aflac is the number one provider of
guaranteed-renewable insurance in the United States and the number one
insurance company in terms of individual insurance policies in force in Japan.
Our insurance products provide protection to more than 40 million people
worldwide. Aflac has been included in Fortune magazine's list of America's
Most Admired Companies for seven years and in Fortune magazine's list of the
100 Best Companies to Work For in America for eleven consecutive years. Aflac
has been recognized three times by both Fortune magazine's list of the Top 50
Employers for Minorities and Working Mother magazine's list of the 100 Best
Companies for Working Mothers and has also been included in Ethisphere
magazine's list of the World's Most Ethical Companies for two consecutive
years. Aflac Incorporated is a Fortune 500 company listed on the New York
Stock Exchange under the symbol AFL. To find out more about Aflac, visit
aflac.com.

    The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" to encourage companies to provide prospective information, so long as
those informational statements are identified as forward-looking and are
accompanied by meaningful cautionary statements identifying important factors
that could cause actual results to differ materially from those included in
the forward-looking statements. We desire to take advantage of these
provisions. This document contains cautionary statements identifying important
factors that could cause actual results to differ materially from those
projected herein, and in any other statements made by company officials in
communications with the financial community and contained in documents filed
with the Securities and Exchange Commission (SEC).

    Forward-looking statements are not based on historical information and
relate to future operations, strategies, financial results or other
developments. Furthermore, forward-looking information is subject to numerous
assumptions, risks, and uncertainties. In particular, statements containing
words such as "expect," "anticipate," "believe," "goal," "objective," "may,"
"should," "estimate," "intends," "projects," "will," "assumes," "potential,"
"target" or similar words as well as specific projections of future results,
generally qualify as forward-looking. Aflac undertakes no obligation to update
such forward-looking statements. We caution readers that the following
factors, in addition to other factors mentioned from time to time could cause
actual results to differ materially from those contemplated by the
forward-looking statements: legislative and regulatory developments, including
changes to health care and health insurance delivery; assessments for
insurance company insolvencies; competitive conditions in the United States
and Japan; new product development and customer response to new products and
new marketing initiatives; ability to attract and retain qualified sales
associates and employees; ability to repatriate profits from Japan; changes in
U.S. and/or Japanese tax laws or accounting requirements; credit and other
risks associated with Aflac's investment activities; significant changes in
investment yield rates; fluctuations in foreign currency exchange rates;
deviations in actual experience from pricing and reserving assumptions
including, but not limited to, morbidity, mortality, persistency, expenses and
investment yields; level and outcome of litigation; downgrades in the
company's credit rating; changes in rating agency policies or practices;
subsidiary's ability to pay dividends to the parent company; ineffectiveness
of hedging strategies; catastrophic events; and general economic conditions in
the United States and Japan, including increased uncertainty in the U.S. and
international financial markets.

SOURCE Aflac Incorporated
CONTACT:
Analyst and Investor, Kenneth S. Janke Jr., 800-235-2667,
option 3, FAX: +1-706-324-6330, kjanke@aflac.com
Media, Laura Kane,
+1-706-596-3493, FAX: +1-706-320-2288, lkane@aflac.com/
Web Site: http://www.aflac.com /