Aflac and Trupanion Announce Distribution Alliance and Investment
October 29, 2020 at 16:40 PM EDT
COLUMBUS, Ga. and SEATTLE, Oct. 29, 2020 /PRNewswire/ -- Aflac Incorporated (NYSE: AFL), a Fortune 200 company that helps provide protection to more than 50 million people in Japan and the U.S., and Trupanion, Inc. (Nasdaq: TRUP), a leader in medical insurance for cats and dogs, are pleased to have entered into an exclusive alliance agreement to sell pet insurance in worksites across the U.S. This alliance will leverage Aflac's strong brand and broad U.S. worksite distribution network, including its digital Consumer Markets channel, and Trupanion's expertise and leadership in pet insurance. The companies also have agreed to explore potential opportunities in Japan's growing pet insurance market. In connection with the alliance agreement, Aflac will purchase an approximate 9% stake in Trupanion to further drive alignment.
"We are pleased to partner with Trupanion, the industry leader in U.S. pet insurance. With pet ownership on the rise and more Americans working from home, we see the opportunity for growth in what we view as a large, underpenetrated market," said Frederick J. Crawford, president and Chief Operating Officer of Aflac Incorporated. "The alliance will combine Aflac's brand recognition and broad worksite and direct to consumer distribution in the U.S. with Trupanion's brand and strong reputation within the pet insurance industry."
Under the alliance agreement, Aflac will provide access to agent, broker and direct to consumer platform distribution and assistance in worksite product design, marketing and enrollment support. Trupanion will provide marketing, underwriting, and policy administration, including all aspects of policyholder support.
"The distribution alliance will provide for the further enhancement of Aflac's value proposition by offering broader employee benefits and benefit solutions to our vast network of agents and brokers, as well as to employers and their employees in the U.S.," said Teresa L. White, president of Aflac U.S. "We believe Trupanion's offering provides our distribution partners with a benefit solution that they have been seeking from Aflac, and is a great complement to our core supplemental product portfolio."
"We are excited to enter the worksite through this alliance with Aflac and to have the company as a shareholder," said Darryl Rawlings, founder and CEO of Trupanion. "Our shared long-term commitment is to leverage Aflac's leadership position and broad distribution in the U.S. to unlock the potential of pet medical insurance being sold at the worksite and directly to consumers. We also look forward to exploring opportunities in Japan, where Aflac insures one in four households."
Rawlings added, "Aflac is a world-class organization, and we share similar cultures and values. We feel honored to partner with them over the coming years to grow the pet insurance category in the U.S. and build our international footprint."
The transaction will result in Aflac Incorporated investing approximately $200 million in newly issued Trupanion common stock subject to regulatory approvals. The investment terms include a cap on ownership of under 10%, and a minimum holding period, or "lock-up" provision, of three years, subject to certain exceptions.
Raymond James & Associates, Inc. served as financial advisor, and Skadden Arps, Slate, Meagher & Flom LLP as legal advisor, to Aflac Incorporated. Guggenheim Securities served as financial advisor and DLA Piper served as legal advisor to Trupanion.
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SOURCE Aflac Incorporated