Fourteen years ago, Harvard researchers revealed that insurance companies were big-time investors in tobacco companies. The seemingly hypocritical position prompted outrage and calls for them to divest.
But when the same scientists recently re-examined the matter, they found the industry had failed to kick the habit.
By reviewing SEC filings and news reports from 2008, J. Wesley Boyd and colleagues determined that US, UK and Canadian-based insurance companies owned at least $4.4 billion worth of stock in companies whose subsidiaries produce cigarettes, cigars, chewing tobacco and related products.
“Despite calls upon the insurance industry to get out of the tobacco business by physicians and others, insurers continue to put their profits above people’s health,” Boyd told Medical News Today. “It’s clear their top priority is making money, not safeguarding people’s well-being.”
The World Health Organization estimates that tobacco products contribute to 5.4 million deaths per year worldwide.
New Jersey-based Prudential Financial Inc., which markets life and disability insurance, has holdings in tobacco firms like Reynolds American and Philip Morris, that total $264 million.
These numbers are dwarfed by Toronto-based Sun Life which sells health, disability, life and long-term care insurance. It owns just north of $1 billion in tobacco company stock.
Meanwhile, London-based Prudential Plc, which offers disability, health and long-term care insurance, holds $1.38 billion in British American Tobacco and other such companies.
“Insurance firms have figured out ways to profit from both… investing in tobacco (and) selling life or health insurance. (They) exclude smokers from coverage or, more commonly, charge them higher premiums. Insurers profit – and smokers lose – twice over,” wrote the authors.
Boyd’s group first reported on the matter in a 1995 Lancet article.