Before we start this morning, let me remind you that some statements in the teleconference are forward-looking within the meaning of federal securities laws. Although we believe these statements are reasonable, we can give no assurance that they will prove to be accurate because they're prospective in nature. Actual results could differ materially from those we discuss today. We encourage you to look at our quarterly release for some of the various risk factors that could materially impact our results.Now I'll turn the program over to Dan, who will begin this morning with some comments about the quarter and our operations in Japan and the U.S. I'll then follow-up with a few financial highlights for the quarter in the first 9 months, and then we'll be glad to take your questions. Dan? Daniel P. Amos Thank you, Robin. Good morning, and thank you for joining us today. I'm pleased with Aflac's overall financial and operational performance in the third quarter. I believe we've established a solid foundation toward achieving our annual operating earnings growth and capital strength objectives. I'll begin this morning with a review of our operations in Japan. Aflac Japan generated strong financial results for both the third quarter and the first 9 months of the year. Revenue growth in yen rose 4.8% for the quarter and 4.1% for the first 9 months. Although investment yields declined on new money, we saw solid earnings growth for the quarter and for the first 9 months. We are particularly pleased with the tremendous sales momentum in the quarter. The new annualized premium sales rose 22.2% to JPY 42.3 billion for the quarter, which significantly exceeded our expectations. Even more impressive, production in the third quarter set an all-time quarterly records. For the first 9 months of the year, total new annualized premium sales rose 13.9%.
Third quarter bank channel sales, by far, exceeded our expectations generating JPY 14.5 billion in production. That represents an increase of 146.6% over the third quarter of 2010 and a 90.7% increase over the second quarter of 2011. Bank sales in the third quarter accounted for 34.4% of total sales. We are proud of Aflac Japan's outstanding sales results. This is particularly true following the challenges from the devastating earthquake and tsunami. Keep in mind that for several months after the disaster, Aflac Japan shifted sales and marketing resources that included relocating both people and budget from the nonbank channel to the disaster-stricken areas. Some of the negative impact from this natural disaster that held back our traditional sales force was masked by the strong bank sales in the second and third quarter.Let me remind you how the bank sales progressed. As I mentioned, we believe that more banks would step up their effort in selling Aflac products once other banks experienced success, and that's exactly what happened. While Shenkan [ph] and regional banks were early adapters in terms of selling our products, we've seen new annualized premium dramatically increase in the mega banks who started selling the products. These strong bank sales reflect Aflac Japan's impressive ability to develop relevant products such as WAYS, our unique hybrid whole-life product, that appeals to banks and Japanese consumers alike. WAYS has been a primary driver of Aflac Japan's remarkable sales increase. As you are aware, the average premium for our WAYS policies sold through the banks, the primary distributor and outlet for the product, is about 10x the average premium for the cancer in medical product. That makes WAYS a very strong contributor to Aflac Japan's top line growth that has contributed to the continued rapid growth of bank sales in 2011.
WAYS generated a third quarter sales increase of 362.8% for the same period in 2010 and a 99.3% over the second quarter of 2011. Sales of WAYS accounted for 31.7% of Aflac Japan's total sales in the third quarter. Without the discounted advanced premium option where policyholders pay all their premiums upfront, the profit margin for WAYS is about 14%, which is more than double the profit margin for child endowment. With the discounted advanced premium option, WAYS profit margin is enhanced around 18%. It's important to note that 90% of the customers at the bank, elect to pay premiums upfront through this payment option.Read the rest of this transcript for free on seekingalpha.com