Aflac Inc. is hoping to use a stronger line of provider-network-based dental and vision plan products to increase overall U.S. sales.
Aflac executives talked about their hopes for Argus Dental & Vision Inc. Friday, during a conference call with securities analysts.
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The Columbus, Georgia-based insurer reported earlier this month that it has agreed to acquire the Florida-based holding company that controls Argus Dental.
The Argus Deal
Aflac will pay $75 million in cash for Argus once it completes the purchase, and it could make up to $21 million in additional payments over the next three years if the Argus unit does well, according to a note in a quarterly report Aflac filed with the U.S. Securities and Exchange Commission.
Argus Dental was founded in 2006. It now manages provider networks that support dental and vision plans with 1 million enrollees.
Dan Amos, Aflac’s chief executive officer, told the securities analysts that the company expects Argus-based dental and vision plans to place the company’s name “on the front page of the benefit enrollment process.”
Argus-based plans should help Aflac attract new clients, and the plans will give Aflac a chance to sell more different types of products to the 460,000 businesses Aflac already serves, Amos said.
“We expect our dental and vision strategy will serve to improve recruiting and retention of agents,” Amos said.
Aflac executives said that they expect the Argus deal to begin having a significant impact on Aflac’s U.S. operations starting in 2020, and that they expect to focus on selling dental and vision benefits mainly to small and midsize employers.
Aflac appears to be pursuing a strategy similar to the strategy Unum Group Corp. has adopted. Unum, a company best known for its disability insurance plans, acquired the parent of AlwaysCare Benefits, a dental and vision plan company, in 2016. Unum managers have said that they believe offering dental and vision benefits helps agents and brokers get employers’ attention.