As a part of the agreement, Aflac will acquire an approximate 9% stake in Trupanion. It will invest nearly $200m in newly issued Trupanion common stock.
The terms of the deal include a cap on ownership of under 10%, and a minimum holding period of three years, which will be subject to certain exceptions.
Aflac president and COO Frederick Crawford said: “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.
“The alliance will combine Aflac’s brand recognition and broad worksite and direct to consumer distribution in the US with Trupanion’s brand and strong reputation within the pet insurance industry.”
Aflac and Trupanion have also agreed to explore opportunities in the pet insurance market of Japan.
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Under the partnership, Aflac will offer access to agent, broker and direct to consumer platform distribution.
It will also offer assistance in worksite product design, marketing and enrollment support.
Marketing, underwriting, and policy administration, including all aspects of policyholder support, will be provided by Trupanion.
Aflac US president Teresa White said: “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 US.
“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.”
Trupanion founder and CEO Darryl Rawlings said: “Our shared long-term commitment is to leverage Aflac’s leadership position and broad distribution in the US 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.”