Aflac Inc. expects no revisions to its 2018 financial targets in the wake of allegations from former agents that the company misled new hires and illegally cross-sold products, Chairman and CEO Daniel Amos said.
The company's shares dipped following the Jan. 11 publication of a media report accusing the company of misrepresenting expected earnings for new agents and incorrectly classifying them as independent contractors.
During Aflac's fourth-quarter 2017 earnings conference call, Amos said "it's too early to tell" if the publicity has affected sales or recruiting. The company said Jan. 31 it expects to hit full-year 2018 operating EPS of $7.45 to $7.75.
He reiterated the company's denial of the allegations, which were made by a group of ex-agents.
"When it's all said and done, we will be able to handle any of the issues that were brought before us and resolve them in our favor," Amos said.
The media report made public the draft for class-action litigation submitted as evidence in a Georgia lawsuit the ex-agents filed against Aflac. A federal judge subsequently ruled that the matter was bound by the company's arbitration mandate and that the former employees did not have standing to bring a class-action lawsuit.
Amos said his company responded to the allegations in a transparent manner, including issuing a report from the findings of a special board committee of independent directors chosen to investigate the complaints. The company maintains a "robust internal audit function" and makes an anonymous ethics hotline available to all stakeholders staffed by an independent third-party service that circumvents management, he said.
Teresa White, president of Aflac U.S., said the company saw sales improvement from veteran and new agents for 2017 compared to 2016.
