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Aflac succession expected to turn to CFO after Paul Amos' departure

The departure of the man widely considered to be Aflac Inc.'s future CEO will present a leadership void at the company while making CFO Frederick Crawford the likeliest next-in-line to run the company, analysts said.

Paul Amos, president of American Family Life Assurance Co. of Columbus (Aflac) announced June 8 that he would be leaving the company on July 1 for a private equity partnership at Columbus, Ga.-based Jordan Blanchard Capital LLC. His father, Aflac Chairman and CEO Daniel Amos, will assume the role of president for American Family Life Assurance. He is 65 and has given no indication that he plans to step down anytime soon.

Paul Amos' announcement would have pushed any such plans back, Sandler O'Neill analyst John Barnidge said in an interview. When Daniel Amos does retire, the person who takes over will almost certainly be the first non-family member to run the company since it was founded in 1955.

A break in a company's familial line of succession often makes it a more willing seller, Barnidge said.

"Longer term, whenever you have a non-family member running a company that's been run by family members, it probably increases the likelihood of sale," he said.

Because Daniel Amos is the son of a founder, as well as the company's chairman and CEO, assuming the role of president could raise governance issues over the long term, said CFRA analyst Cathy Seifert.

Soon to follow Paul Amos' departure is the retirement of Kriss Cloninger at year's end, who is a board member and the president of Aflac Inc. That will leave a leadership void at the top that the company will need to address soon, Seifert said.

"I think the prudent thing would be for Aflac to name someone who is capable of stepping into this role in short order," she said.

On June 9, Aflac's shares climbed about 3.5% to $78.02 on a day of mixed results in the broader markets.

Crawford's background makes him the strongest candidate to lead the company should Daniel Amos step down, Barnidge said. Before coming to Aflac in 2015, Crawford was CFO and executive vice president for CNO Financial Group Inc. and was CFO for Lincoln Financial Group prior to that.

"He has a long history in the c-suite, and he seems to be well-revered by investors," Barnidge said.

Keefe Bruyette & Woods analyst Ryan Krueger also thinks Crawford is a natural internal successor for the supplemental insurance company, he wrote in a June 9 note to clients.

Paul Amos speculated to the Columbus Ledger-Enquirer that he would be surprised if his father retired at 70, reported as the earliest age at which the CEO said he may step down.

The younger Amos will be a director for Jordan Blanchard Capital, which will change its name to JBA Capital to reflect the contribution it expects from its newest director, the private equity company said in a release. Jordan Blanchard focuses on long-term business acquisitions on the lower end of the middle market in the southeast in the manufacturing, distribution and business services sectors.

He leaves a company that Barnidge believes is well run but facing headwinds in its operating environment and financials. Low interest rates in Japan, where Aflac derives most of its business, has prompted the company to curb sales that could disrupt distribution, Barnidge wrote in a June 9 note to clients. Another challenge has been slow year-over-year earnings per share growth, he wrote.