Nov. 16 (Bloomberg) -- Aflac Inc., the world's largest seller of supplemental health insurance, rose the most in three months in New York trading after announcing an exclusive distribution deal in Japan, its biggest market.

Japan Post Network Co. will offer cancer insurance only from Aflac, starting some time next year, the Columbus, Georgia- based company said today in a statement. Japan Post Network sells insurance through its 24,000 post office locations and is one of four entities under Japan Post Holdings Co. that began operating last month as part of the privatization of the postal savings system.

``This is a material event for Aflac,'' John Hall, an analyst at Wachovia Corp. in New York, wrote in a note to clients. He rates the shares ``market perform.'' The product will initially be sold at perhaps 300 locations, and eventually all of them, Hall said, citing Japanese media reports.

Aflac relies on Japan for three-quarters of its revenue, and sales in the three months ended Sept. 30 increased there by 2.2 percent, the company's first quarterly increase in the country since 2005. The insurer projects Japan sales will increase 3 percent to 7 percent next year.

``Throughout 2007, we have been encouraged by the overall direction'' in Japan, said Chief Executive Officer Daniel Amos in the statement.

Japan Post has the largest pool of cash of any private company, holding about $1.6 trillion in deposits as of Oct. 1.

Aflac rose $3.50, or 6.1 percent, to $60.66 in New York Stock Exchange composite trading. The shares have gained 32 percent this year.

To contact the reporter on this story: Josh P. Hamilton in New York at jphamilton@bloomberg.net.

Last Updated: November 16, 2007 16:34 EST