Friday, April 1, 2011

Aflac (AFL) Bracing for Japan Claims

Talking with FOX Business Network, Aflac (NYSE:AFL) CEO Dan Amos, after a visit to Japan, said the company expects what he said were“quite a few claims” as a result of the disastrous earthquake and tsunami.

Amos confirmed Aflac insures about “one out of four” Japanese people.

Even so, he believes the company will “still attain our earnings per share growth.” That's a bold statement that will take time to bear out, although insurance payouts will probably affect the company more over the long term as it will take time to sort through and deal with the millions of claims they're sure to face.

He concluded, “We are going to have quite a few claims. No something we did not reserve for. Who knows what the number. If you had 24,000 deaths, we insure one out of four, so that would be 6,000 deaths. We have 20 million policies in force, so as a percent its very small and we can handle that. We still expect to still attain our earnings per share growth. If something else goes wrong from a nuclear perspective that’s another story. But right now we will do fine.”

Aflac closed Thursday at $52.78, gaining $0.26, or 0.50 percent.

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