Aflac sales in Japan received a major boost Friday with confirmation the insurance company has signed a new contract with Japan Post Holdings to sell policies in 20,000 post offices throughout the Asian nation.
Columbus-based Aflac has done business with Japan Post since 2008, with the government-owned entity peddling the insurer’s cancer policies in 1,000 outlets. Pending regulatory approval, the organization’s Japan Post Insurance, known as “Kampo,” also will begin selling Aflac policies at its 79 offices.
Aflac Chairman and Chief Executive Officer Dan Amos, in a statement, said he was pleased with the agreement, which comes with his company preparing to report its second-quarter earnings numbers on Tuesday. Stock market analysts have been expecting slower sales in Japan, with Aflac facing more competition, particularly through banking channels, which the Columbus company itself has used in the past.
“We believe their selection of our cancer products reflects the overall strength of the Aflac brand, our reputation for quality customer service, and the comprehensive support we provide to our customers and agents,” Amos said of the Japan Post expansion.
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Japan Post President and CEO Taizo Nishimuro said Aflac’s “long track record” in the Japanese market made the decision an easy one. More than 75 percent of Aflac’s business is done in Japan, with the balance in the U.S.
“From the Japan Post group’s perspective, deepening cooperation with them will enhance the value of our post offices and improve convenience for our customers in all parts of the country,” Nishimuro said. “This partnership is of the utmost significance as it will bolster our earnings and increase the Japan Post group’s corporate value in preparation for our (initial public stock offering) in the near future.”
Aside from handling Japan’s mail needs and selling insurance, Japan Post also operates banks. The Japanese government has considered fully privatizing the entity.
Sterne Agee research analyst John Nadel, in a note issued Wednesday after media reports of the pending deal, called it “very positive news” because it indicates Japan Post is delaying creation of its own cancer policies. It also should “drive significant sales growth” for Aflac in one of its more popular, higher profit margin products.