Japan Post Holdings Co., the country's biggest holder of bank deposits, will start selling more insurance products by Aflac Inc., the largest provider of supplemental health insurance.

Japan Post, which began offering cancer insurance policies by Aflac, or American Family Life Assurance Co., in October 2008, will sell the policies in as many as 20,000 post offices from the current 1,000, the U.S. insurer said in a statement through the Tokyo Stock Exchange. The two companies will also co-develop insurance products, according to the statement.

The alliance comes amid Aflac's effort to expand in Japan, its largest market, and amid discussions on the Trans Pacific Partnership free-trade accord. The U.S. has requested that Japan Post's insurance subsidiary compete fairly with private companies.

Japan Post Insurance, locally known as Kampo and a unit of Japan Post Holdings, will enter into a contract with Aflac to begin distributing cancer insurance policies at all 79 of its sales offices, according to the statement.

"This isn't a bad deal for the Japanese government and Japan Post," said Nobuyasu Uemura, managing director at Capitas Consulting, a Tokyo-based firm. "This allows Japan to show its willingness to be open to discussions ahead of the TPP talks. It could lead to Japan Post selling different products to widen its offerings."

Japan earlier this year reached a deal with the U.S. on bilateral trade issues that cleared the way for the world's third-largest economy to join the TPP talks this week for the first time.

Japan Post President Taizo Nishimuro earlier this week said the company, which is also the largest holder of Japan's debt, plans to sell shares through an initial public offering by April 2015, six months earlier than targeted. The offering may exceed ¥4 trillion, the previous administration's postal reform minister, Mikio Shimoji, said in October.