Aflac (AFL) Launches Critical Illness Product In U.S. Unit

Aflac Inc. (NYSE:AFL) has launched a new insurance product named Lump Sum Critical Illness Insurance in its U.S. segment.

The critical illness product has been redesigned to include new riders and a wider range of benefits for offering customers a holistic approach to recovery and care.

This product will be an addition to the company’s existing bouquet sold under direct to consumer portfolio. Other Aflac plans available directly to consumers include cancer, accident, life, dental and specified health event. For 2019, the company has planned to introduce more products in this category.

This product will be available in the voluntary insurance market, which can be easily accessed by millions of Americans working outside the traditional workplace as freelancers, contractors, self-employed solopreneurs and those in startups.

The critical illness product carries features like lump sum payment, building benefit, hospitalization rider and a new event recovery rider. The policy is currently available across nine states in the United States. It will also be present in 10 additional states by this year-end. Remaining states will join the line-up in 2019.

The company’s U.S. segment continues to perform strongly as is evident from a revenue CAGR of 3% from 2008-2017, which sustained through the first nine months of 2018 with revenues up 2.5%. The company has undertaken a number of growth initiatives in this segment such as the adoption of Everwell and One Pay Day for increased penetration, delivery of value-added services and stronger client retentionand investment in administrative capabilities. These initiatives should drive the company’s top-line growth. In 2018, the company’s 3-5% sales growth is expected to result in 2-3% growth in earned premiums.

In a year’s time, the stock has gained 5.3% versus the industry’s decline of 4.2%.

Aflac carries a Zacks Rank # 3 (Hold). Some better-ranked stocks in the space are AMERISAFE, Inc. (NASDAQ:AMSF) , Employers Holdings Inc. (NYSE:EIG) and Unum Group (NYSE:UNM) , each carrying a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AMERISAFE and Unum’s earnings surpassed estimates in three of the four reported quarters, the average positive surprise being 15.4% and 3.31%, respectively. While Employers Holdings’ metric beat estimates in each of the four reported quarters, the average being 77.83%.

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