Aflac’s Acquisition of Benefits Business from Zurich North America

Sidley Austin LLP is representing publicly traded Aflac Incorporated (NYSE: AFL) in its purchase of Zurich North America’s U.S. group benefits business, consisting of group life, disability and absence management products. Willkie represented Zurich in the transaction.

Aflac announced 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 entered into a definitive agreement to acquire Zurich North America’s U.S. Corporate Life and Pensions (Group Benefits) business, which consists of group life, disability and absence management products.

Aflac of Columbus and Aflac of New York will reinsure on an indemnity basis Zurich North America’s U.S. in-force group life and disability policies with annualized earned premium of approximately $115 million. Aflac will also acquire assets needed to support the group life and disability business, along with an absence management platform. Subject to regulatory approvals and customary closing conditions, the transaction is expected to close in the second half of 2020.

It is anticipated that Zurich North America employees dedicated to the U.S. group life and disability business will transfer to Aflac. In addition, Aflac and Zurich have entered into an agreement with Benefit Harbor LP to transfer the assets and employees of Benefit Harbor Insurance Services, the outsourced platform supporting the group life and disability business of Zurich North America, to Aflac. Aflac has separately expanded its relationship with Benefit Harbor to provide certain specialized services to group life and disability clients. No changes are expected in the location of where business activities reside today.

In addition to the transaction, Aflac’s acquired group benefits business will be included as a partner within Zurich’s Global Employee Benefits Solutions Partner Network, allowing Aflac to offer its employee benefit products to Zurich’s global clients with a U.S. presence.

The Sidley team is led by Sean Carney (Picture), Chad Vance (Insurance) and Brian Fahrney (M&A), and includes John White, Kyle Bessette (Insurance), Stephanie Dobecki (Insurance Regulatory), Tracy Williams, John Wilson (Insurance Tax), Lauren Gallagher, Karim Pirani (Employee Benefits), Glenn Nash, Rachelle Soderstrom and Ryan Rutledge (Technology and IP Transactions).

The Willkie deal team representing Zurich was led by partners Thomas Cerabino, Sarah Wong and Michael Stern, senior counsel Donald Henderson and associate Annie Heiss.

Involved fees earner: Kyle Bessette – Sidley Austin LLP; Sean Carney – Sidley Austin LLP; Stephanie Dobecki – Sidley Austin LLP; Brian Fahrney – Sidley Austin LLP; Lauren Gallagher – Sidley Austin LLP; Glenn Nash – Sidley Austin LLP; Karim Pirani – Sidley Austin LLP; Rachelle Soderstrom – Sidley Austin LLP; Chad Vance – Sidley Austin LLP; John White – Sidley Austin LLP; Tracy Williams – Sidley Austin LLP; John Wilson – Sidley Austin LLP; Thomas Cerabino – Willkie Farr & Gallagher; Annie Heiss – Willkie Farr & Gallagher; Donald Henderson, Jr. – Willkie Farr & Gallagher; Michael Stern – Willkie Farr & Gallagher; Sarah Wong – Willkie Farr & Gallagher;

Law Firms: Sidley Austin LLP; Willkie Farr & Gallagher;

Clients: Aflac Global Investments; Zurich North America;

Author: Ambrogio Visconti