Dan Amos, Chairman and CEO of Aflac. Joining Dan on stage is David Young with investor relations and Ken Janke, Executive Vice President and Deputy CFO. Dan Amos has been CEO for nearly 25 years. Dan, I believe you've been with Aflac for almost 40 years if that's correct. I also believe that Dan is one of the driving forces in launching the Aflac Duck, which is probably the only figure more closely associated with Aflac than the Amos name itself. With that, I'll turn it over to Dan for a quick presentation.
Thank you very much. It's a pleasure to be here. Before I begin, you're familiar with the forward-looking statements in the presentation, which are in this slide on your notes. I will go on from there and just say that we're glad to be here and Aflac continues to grow and do well. Aflac does business in our two largest insurance markets in the world, Japan and the U.S. Our policies cover more than 50 million people worldwide. Aflac's products provide a layer of financial protection against the loss of income and assets by paying fixed cash benefits to the insured based on a health event. Our strategy for growth in Japan and the U.S. has remained straightforward and consistent for many years. Aflac develops relevant products and voluntary insurance markets and sells them through expanded distribution channels, which yield new accounts and ultimately new customers.
Aflac's operation in Japan accounts for about three-quarters of our pre-tax insurance earnings. Today, we insure one out of four households in Japan. Aflac has been operating in Japan for 40 years. Since inception, Aflac Japan has focused primarily on what is referred as the third sector products, which includes cancer insurance and medical insurance. Aflac Japan began as the pioneer in cancer insurance. In 2002, Aflac Japan began to offer EVER, which is our medical product that quickly jumped to number one in standalone medical insurance. Our products help our policyholders with out-of-pocket expenses that are not covered by Japan's national health insurance system. While Japan has offered first sector products, including our traditional life insurance, fixed annuities for some time, our focus remains to be in the third sector products. Most recently, we introduced two new cancer insurance products.
In September of 2014, we introduced a new cancer insurance product available for sale through all of our distribution channels. The new cancer product provides enhanced coverage, including additional outpatient treatments for the treatments of multiple cancer occurrence benefits with updated pricing at most age groups. Additionally, on October the 1st, we introduced a cancer insurance product for sale exclusively through Japan Post and Kampo. The new cancer product was designed to provide essential cancer-related benefits for Japan Post and Kampo and also complements the insurance coverage that's available through other products Japan Post offers now. While our expanded distribution relationship with Japan Post contributed to this success, we experienced strong growth across all channels, including our corporate affiliated agencies, our individual agents, and independent corporate agencies. As a result, cancer insurance sales were up a whopping 176% through all distribution channels for the quarter.
Japan's population is covered by a national health insurance system, but citizens still have significant out-of-pocket expenses associated with the healthcare costs. We believe the need for Aflac products will only continue to grow. Given Japan's aging population and declining birth rate, the national health insurance system has been under increasing strain. Co-pays for citizens under age 70 has grown to 30% from the cost of medical treatments covered by national health insurance system. As the fiscal resources tighten in all areas, including medical, nursing home, and pension benefits, it is clear that the difficult fiscal situation will persist in Japan. As you can see, the growth of our medical expenses is projected to significantly outpace the GDP growth. Because of the rapidly aging population, higher co-pays for medical expenses, the market for medical products has been steadily increasing, and this trend is expected to continue.
We believe that we can expand our leading position, and the medical market continues to grow. In addition to offering relevant products, distribution represents a vital component of our growth strategy by broadening it to reach consumers. This is one area that we focused a great deal of our efforts on. Our goal is to have a presence in all outlets where consumers want to buy their insurance or purchase their insurance. Aflac Japan was represented by more than 14,000 sales agencies at the end of 2014, equating to more than 121,000 licensed sales associates employed by those agencies. Our traditional agencies have been and remain the key to our success and represent over 75% of the sales in 2014. We've developed strategic alliances with new channels that have contributed to our top-line growth.
These channels include Japan Post. We continue to make gradual but steady progress with advancing our sales through the postal outlets. I'm pleased that we've expanded the number of postal outlets selling the cancer products to 10,000 as of October. These outlets represent the vast majority of their sales. We also expect the number of postal outlets selling Aflac's products will grow to 20,000 by March of 2016, which will strengthen our position even further on cancer insurance sales. I believe that this alliance will continue to mutually benefit as we make cancer insurance available to more and more Japanese consumers. Another important component of our strategy is our brand. As a product innovator and trusted brand, we've experienced tremendous amount of success leveraging the strength of the Aflac brand in an effort to drive sales.
For example, to promote our newest cancer products, we introduced an advertising campaign in Japan with a newer character called the Pioneer Duck. The character was created to celebrate Aflac Japan's 40th anniversary and to remind customers that Aflac was the first company or pioneer of cancer insurance in Japan, and it has been a tremendous success for us. By leveraging the popularity of the Aflac Duck through different characters over the years, more than nine out of 10 people recognize the Aflac brand. We will continue to look for new ways to connect with consumers through innovative marketing campaigns for the product line. Let me update you on Aflac Japan's performance. Our sales target is based on Aflac Japan's third sector products, including cancer insurance and medical insurance. Third sector products are much less interest sensitive than first sector products.
It is especially impressive that our third sector sales increased 28.5% in the fourth quarter, particularly in comparison to the strong third sector results that we had in the fourth quarter for the prior two years. As I mentioned earlier, the sales of cancer insurance surged following the launch of the New Cancer DAYS product. Aflac Japan's third quarter sales growth for the year was 6.1%, which was at the high end of our sales target. Total revenues were challenged as first sector sales, which have high premiums, declined with the low interest rate environment. In yen terms for the year, revenues grew 1.3%. As you've heard us say before for the last few years, favorable claims experience has resulted in improvement in our benefit ratio, which was 60, I mean, 60.9% at the end of 2014. Our pre-tax profit margin and persistency remain strong.
On a rolling 12 months starting on October the 1st, we should be up almost 20% in new sales, which would be the biggest increase that we have had in third sector sales in more than 10 years. With fourth quarter sales facing difficult comparisons, we believe that third quarter sales in the third sector sales in the fourth quarter of 2015 could be down sharply over 2014. However, as always, we're working to improve sales as we expect greater insight in the second quarter, and we'll update you at that particular time for the fourth quarter results and what we expect. Let me turn to our U.S. operation.
You may know, Aflac is the number one provider of voluntary insurance at the worksite in the U.S. Such, we primarily collect premiums on a payroll deduction basis. Offering competitive and valued products has long as one of the Aflac strengths, and we are committed to doing it even better. Our portfolio of individual and group products provides consumers with outstanding value while offering businesses of all sizes the opportunity to provide their employees a more valuable and comprehensive selection of benefit solutions. We are continually focused on updating our products to identify new opportunities to bring our valuable, cost-effective products to employees and businesses of all sizes. The Aflac U.S. product portfolio, and I apologize for my voice, includes a variety of voluntary insurance products designed to pay cash directly to the policyholders when a serious medical event presents financial challenges.
These payments are made regardless of any other insurance policyholders may have. Regardless of the changes in the healthcare environment recently, one constant has been and continues to be the need for our products. There is no major medical plan, not even the best, that is designed to cover all out-of-pocket expenses. We are focused on developing products that will work well in an evolving healthcare environment, and we have dedicated to delivering our products to the market more quickly. Change comes opportunity, and in the dynamic healthcare environment, we are positioning Aflac to provide solutions for consumers and employers, while leveraging the opportunity for growth. Aflac's well-recognized brand and market leading status only broadens the appeal of our products to consumers through the U.S. We will continue to drive home the need for our products to businesses and ultimately to their employees.
In doing so, we believe that Aflac U.S. has the opportunity to emerge better positioned from an ever-evolving healthcare environment and market. One reason for that is because just like national health insurance system in Japan, we believe that the trend toward more uniform coverage will instill a better understanding and appreciation for the types of products Aflac sells. We continue to believe that the U.S. small and large businesses alike represent a vast opportunity for growth, and we are building our businesses and enhancing our distribution system with that potential in mind. This slide shows the most recent data from the U.S. Census Bureau. The United States has more than 5.6 million businesses with fewer than 100 workers, and these small businesses employ about 39 million people.
Although our traditional focus has been those payroll accounts with less than 100 employees, we also believe that our strategy for reaching regional and large brokers will better position Aflac in businesses with 100-plus employees. Our job is to be where consumers want to purchase Aflac products. As such, we sell through our traditional career agents channel and a broker channel comprised of brokers, both large and small. In total, our distribution network has over 70,000 commissioned agents, and we continue to recruit agents and develop relationships within the insurance brokerage community. About 98% of our products are sold at the work site, and the vast majority of those sales come through smaller employers with 100 or less employees. However, there is great opportunity throughout the employers of all sizes.
As part of our distribution initiative, we are positioning resources, including people, to focus on building and managing relationships with large national brokers. Within this strategy, these key Aflac positions will work with larger brokers on building a voluntary go-to-market strategy. To support the market in sales and enrollment process, we are already represented by more than 80 benefit administrator platforms, sometimes referred to as exchanges, through various brokers. Like Japan, the Aflac brand is important, and no one knows more about that than we do. As of October the 1st, Aflac brand has hit an all-time high of 96%. The Aflac brand is a combination of many elements, and the most visible, of course, being the Aflac Duck. It's also made up of trust that we build through relationships with businesses, policyholders, and consumers.
That's especially important because the fact is businesses and consumers want to turn to a brand that they know and trust. Aflac's established brand has served as an effective door opener and catalyst for many consumers and payroll accounts to be more receptive to hearing about Aflac's products and how that can help them. At the same time, our well-known brand has increased expectations for servicing payroll accounts, distribution, consumers, and policyholders. That's why our focus on customer service is one of our areas of concentration, and we have initiatives underway to support an important aspect of our business. One such groundbreaking initiative you may have seen us when it came out on the Grammys on Sunday, is what we call One Day Pay, which is an industry first. It allows us to process, approve, and pay a claim in just one day.
That accounts for about 70% of our eligible policies we can do that with. In January, we did 118,000 process, approved, and paid in just one day. We should end up somewhere between 1 million and 2 million, and I think it'll be at the high end of the range as we move forward because more and more people will hear about it and use it. Let me update you on Aflac's U.S. performance. Aflac U.S. also performed extremely well in the fourth quarter with $454 million in new sales or a 14.1% increase, which exceeded our expectations. The strong fourth quarter sales drove our total annual sales to $1.4 billion, which was up 0.7%. Significantly exceeded our most recent sales expectations for the year.
It is rewarding to see the changes that we made in our sales organization in 2014, both the career agents channel and the broker channel yield such promising results. Revenues grew 1.2%. As in the case of Japan, favorable claims experience has resulted in more favorable benefit ratios over the last several years. At the end of 2014, our benefit ratio was 48.7%. The pre-tax profit margin and persistency improved slightly. As we look ahead, I believe the changes that we made in our sales organization in the fourth quarter are showing promising results for us. I'm not willing to say that we've had a sales turnaround until I see sales for the first half of 2015. Saying that, I still am encouraged and believe that we should make our target of 3%-7% increase in sales for 2015 with a target of a 5% increase.
You can look for the first quarter to have more difficult comparisons, so we'll be at the low end of the range. The second quarter, we should exceed the high end of the range. I'm very encouraged. I'll spend the last portion of my discussion updating you on the consolidated financial performance of our capital management activity. Aflac Incorporated has a long history of delivering strong financial performance in the face of fluctuating yen. Due to the significant contribution of Aflac Japan's operation to our overall earnings, a weaker yen suppresses Aflac Incorporated's results as reported in dollars. However, Aflac's currency exposure is primarily translation-related as opposed to currency transaction. As such, we still believe that viewing our results excluding the impact of foreign currency is the most meaningful way to evaluate our financial performance, whether the yen has helped us or hurt us.
We've been doing it that way for 25 years. While the yen to the dollar was little changed from 2011 to 2012, the weakening dramatically changed in 2013 and again in 2014. It also is very important to note that our sensitivity to the yen has decreased given the dollar-denominated pre-tax operating income has increased significantly to more than 50%. We remain very focused on our capital ratios, which demonstrates our commitment to maintaining financial strength and flexibility on behalf of the policyholders, the shareholders, and the bondholders. Our capital ratios improved significantly in 2014. Although we have not yet finalized the statutory financial statements, we estimate that 2014 risk-based capital ratios, or RBCs, remain very strong and expected to exceed third quarter estimates.
Additionally, as a result of the significant decline in interest rates that led to substantial unrealized gains in the investment portfolio, Aflac Japan's solvency margin ratio, or SMR, improved significantly, and we expect it will go above 850%. We enter into a new reinsurance agreement on October the 1st, which released approximately JPY 55 billion of Aflac Japan's regulatory reserves. Half of that transaction was retroceded to Aflac Incorporated subsidiary at the end of 2014. Reinsurance is one tool that we've used to manage our capital. As we continue to enhance our multi-capital management plan, we will evaluate our reinsurance needs and anticipate providing additional information at the financial analyst meeting in May of this year. Maintaining our leading industry return on equity is another high priority for us. For 2014, our operating return on equity was strong at 22.6%.
We believe that an analysis of operating earnings, a non-GAAP financial measure, is important to understand Aflac's underlying profitability drivers. Aflac defines operating earnings as the profits derived from operations inclusive of interest cash flows associated with notes payable, but before realized investment gains and losses from security transactions, impairment, and derivative and hedging activities, as well as other non-reoccurring items. On an operating basis, we have had a history of producing solid earnings results. As this chart growth in operating earnings per diluted share was depressed by the weakening of the yen to the dollar at the end of 2014. Excluding that impact, growing the earnings per share was at the high end of the expectations for the year. In 2015, we remained focused on growing the cash dividend and repurchasing our shares.
We are pleased with the actions of the board of directors by increasing the quarterly cash dividend by 5.4% effective in the fourth quarter of 2014. This marks the 32nd consecutive year of increasing the cash dividend. Our objective is to grow the dividend at a rate generally in line with the increase in operating earnings before the impact of the yen. Our capital strength gave us the confidence to increase the 2014 share repurchase objective from $1 billion to $1.2 billion of our common stock. We plan to increase that number in 2015 to $1.3 billion of our common stock. We continued to focus on maintaining the solid fundamentals in our core business and building on a record of earnings growth.
I am very pleased that we ended the year with operating earnings per share at the high end of the 2014 estimate, although that result creates tougher comparisons when we look at 2015. Our objective remains to grow 2015 operating earnings per diluted share before the currency at the 2%-7% range. Overall financial markets are currently very challenged and interest rates are at significantly depressed levels, it's difficult to invest cash flows at attractive yields. We will be very disciplined in selling First Sector products in Japan, which will reduce cash flows to our investments. As I stated earlier, over the last several years, the benefit ratios in both the United States and Japan have improved, especially in 2014, which has contributed significantly to our earnings.
As always, we are working very hard to achieve our earnings per share objective while ensuring that we deliver on our promise to our policyholders. This slide shows how 2015 EPS might look with and without the impact of currency. We estimate that per 1 JPY change on the annual average exchange rate will equate to about $0.024-$0.029 in per share earnings in 2015, and that's down from about $0.04. We remain focused on our vision to be the number one provider of voluntary insurance at the work site in the U.S. and the number one provider of supplemental insurance in Japan over the third sector. As we work toward our objectives and goals, we are confident in our business model and the fundamentals needed for our products, and most importantly, the future success of Aflac. Now, we'll be glad to take questions.
Great. Dan, thanks a lot. Dan, thanks for the commentary. I had a question about Japan sales and Japan Post and obviously the 174% year-over-year increase speaks to strong initial momentum there. Sales, I guess, isn't the full story at this point of the Japan Post cycle since it's early on. Could you give any other indications of consumer reception of this product as you enter the new channel?
Well, we're not allowed to break out Japan Post sales. That's something that they do not want us to do. We agreed to do that when we did the contract a couple of years ago. I can tell you that they're on target or doing better than what we thought we would do. One thing that I want to be clear on is when you go from 10,000 to 20,000, it's not doubling because a lot of the best locations are in the 10,000. Saying that, it also means that we're going to be strong for the first three quarters of this year because of that. It's also proven how much we dominate the cancer insurance market in Japan. In the U.S., cancer insurance isn't as big as it is over there. Over there, they feel like they've got to have it.
It's the number one killer. Almost everyone has debated whether to buy it or bought it. I think there's still enormous opportunity for growth in that market. Across the board, because there were two products, both Japan Post product and then the product for our sales force, we had big increases with individual agents. We had big increases with corporate agencies. Because Japan Post had not sold much the year before, it made the percentage go way up. It's a combination of all of it.
I appreciate the commentary. Unfortunately, we're over time, we're going to have to leave it there. Thank you very much for joining with us today.
My pleasure.