COLUMBUS, Ga., Nov. 2, 2020 /PRNewswire/ -- Aflac Incorporated (NYSE: AFL) announced today that its insurance subsidiaries American Family Life Assurance Company of Columbus (Aflac of Columbus) and American Family Life Assurance Company of New York (Aflac of New York) have completed the acquisition of Zurich North America's U.S. Corporate Life and Pensions (Group Benefits) business, including the assets and employees of Benefit Harbor Insurance Services supporting the acquired group life, disability and absence management products.
As announced in March 2020, Aflac of Columbus and Aflac of New York are reinsuring, on an indemnity basis, Zurich North America's U.S. in-force group life and disability policies with annualized premium of approximately $120 million. Aflac of Columbus and Aflac of New York also acquired assets needed to support the group life and disability business, along with an absence management platform.
The acquisition is consistent with Aflac Incorporated's strategy of buy-to-build, which deploys capital into growth initiatives while limiting the capital at risk. Funding of the transaction, along with required capital in support of assumed businesses, came from internal capital. The total consideration is less than $200 million, including capital in support of the business. Aflac expects modest run-rate dilution over the near-term as it continues to build the business to scale.
"We are excited as we welcome new team members to the Aflac family and enhance our value proposition to agents, brokers and employers," said Teresa L. White, president of Aflac U.S. "This strategic buy-to-build transaction aligns with our vision of being the number one distributor of benefit solutions supporting the U.S. workforce. We believe this acquisition will also enhance cross-selling opportunities and improve both persistency and account penetration with our core supplemental business."
Richard L. Williams, Jr., executive vice president and chief distribution officer of Aflac U.S., added, "This further enhances Aflac's value proposition to be on the front page of benefits enrollment leveraging the power of Aflac's brand and broad distribution of associates and broker partners. With our national expansion into network dental and vision in 2021 and now true group benefits, Aflac continues to deepen the relationships with employers and policyholders."
ABOUT AFLAC INCORPORATED
Aflac Incorporated (NYSE: AFL) is a Fortune 500 company, helping provide protection to more than 50 million people through its subsidiaries in Japan and the U.S., where it is a leading supplemental insurer by paying cash fast when policyholders get sick or injured. For more than six decades, insurance policies of Aflac Incorporated's subsidiaries have given policyholders the opportunity to focus on recovery, not financial stress. Aflac Life Insurance Japan is the leading provider of medical and cancer insurance in Japan, where it insures 1 in 4 households. Fortune magazine recognized Aflac as one of the 100 Best Companies to Work for in America for 20 consecutive years. For 14 consecutive years, Aflac has been recognized by Ethisphere as one of the World's Most Ethical Companies. In 2020, Fortune included Aflac Incorporated on its list of World's Most Admired Companies for the 19th time, and Bloomberg added Aflac Incorporated to its Gender-Equality Index, which tracks the financial performance of public companies committed to supporting gender equality through policy development, representation and transparency. To learn how to get help with expenses health insurance doesn't cover, get to know us at aflac.com.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. The company desires to take advantage of these provisions. This document contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as "expect," "anticipate," "believe," "goal," "objective," "may," "should," "estimate," "intends," "projects," "will," "assumes," "potential," "target," "outlook" or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.
The company cautions readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:
- the effects of COVID-19 and any resulting economic effects and government interventions on the Company's business and financial results
- ability to attract and retain qualified sales associates, brokers, employees, and distribution partners
- events related to the Japan Post investigation and other matters
- competitive environment and ability to anticipate and respond to market trends
- difficult conditions in global capital markets and the economy
- deviations in actual experience from pricing and reserving assumptions
- ability to continue to develop and implement improvements in information technology systems
- defaults and credit downgrades of investments
- exposure to significant interest rate risk
- concentration of business in Japan
- limited availability of acceptable yen-denominated investments
- tax rates applicable to the Company may change
- failure to comply with restrictions on policyholder privacy and information security
- interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems
- catastrophic events including, but not necessarily limited to, epidemics, pandemics (such as the coronavirus COVID-19), tornadoes, hurricanes, earthquakes, tsunamis, war or other military action, terrorism or other acts of violence, and damage incidental to such events
- ability to protect the Aflac brand and the Company's reputation
- extensive regulation and changes in law or regulation by governmental authorities
- foreign currency fluctuations in the yen/dollar exchange rate
- decline in creditworthiness of other financial institutions
- significant valuation judgments in determination of amount of impairments taken on the Company's investments
- U.S. tax audit risk related to conversion of the Japan branch to a subsidiary
- subsidiaries' ability to pay dividends to the Parent Company
- decreases in the Company's financial strength or debt ratings
- inherent limitations to risk management policies and procedures
- concentration of the Company's investments in any particular single-issuer or sector
- differing judgments applied to investment valuations
- ability to effectively manage key executive succession
- changes in accounting standards
- level and outcome of litigation
- allegations or determinations of worker misclassification in the United States
Analyst and investor contact - David A. Young, 706.596.3264 or 800.235.2667 or firstname.lastname@example.org
Media contact - Catherine H. Blades, 706.596.3014; FAX: 706.320.2288 or email@example.com
SOURCE Aflac Incorporated