The Japanese subsidiary of AFLAC Incorporated (AFL - Free Report) , Aflac Japan recently inked a deal with Japan Post Holdings, a Japanese entity that operates post stations, banks and insurance businesses, to expand their existing partnership. The two companies have been partners since 2008.
Japan Post group comprises of Japan Post Holdings and three of its operating subsidiaries– Japan Post Co. Ltd., Japan Post Insurance Co. Ltd. (Kampo), and Japan Post Bank Co. Ltd. Through these subsidiaries, Japan Post Holdings delivers financial products and provides postal services to post offices across Japan.
Japan Post Holdings has been distributing Aflac Japan’s cancer insurance products through its post offices across Japan for the past five years. Under the extended agreement, Japan Post Holdings will increase the number of post offices offering Aflac’s cancer insurance products from 1,000 to 20,000.
Additionally, Aflac Japan will engage in an agency contract with Kampo to distribute its cancer insurance products through the latter’s 79 directly managed sales offices. However, this deal is currently pending regulatory approval. Additionally, Aflac Japan is also planning to develop an exclusive cancer product for Japan Post and Kampo.
Aflac has a significant presence in Japan. Cancer insurance is gaining rapid popularity in the country. As per business reports, about one-fourth of the total population in Japan own cancer care insurance whereas 75% of the population is still without the coverage. This extended deal with Japan Post group will allow Aflac to tap this opportunity and strengthen its foothold in Japan.
Aflac has been quite active in promoting and providing its cancer insurance products globally. The above deal is one such endeavor by the company. Earlier this month, Aflac introduced its Cancer Care insurance plan in New Jersey.
According to sources, Japan Post is scheduled to sell its shares to the public and raise around $4 trillion by 2015. This is expected to provide adequate cushioning in its cash portfolio and fund the strategic initiatives of the company.
Aflac currently carries a Zacks Rank #3 (Hold). Among other insurers, Amerisafe Inc. (AMSF - Free Report) and Stancorp Financial Group Inc. carry a Zacks Rank #2 (Buy) and Employers Holdings Inc. (EIG - Free Report) carries a favorable Zacks Rank #1 (Strong Buy).