Insurance Companies Invest Billions In Big Tobacco
Posted on: Thursday, 4 June 2009, 13:10 CDT
Leading life and health insurers in the US, Canada and the UK have invested at least $4.4 billion in major tobacco companies, according to a new report in the New England Journal of Medicine.
"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," said study author Wesley Boyd, of Harvard Medical School.
"It's clear their top priority is making money, not safeguarding people's well-being."
Boyd and colleagues showed that Prudential Financial Inc., which provides life insurance and long-term disability coverage, has invested $264.3 million in major tobacco companies, including Reynolds American and Philip Morris.
Additionally, Sun Life Financial Inc., which sells life, health, disability and long-term care insurance, has just over $1 billion in two tobacco companies, including $890 million in Philip Morris, said Boyd and co-authors, Drs. David Himmelstein and Steffie Woolhandler at the Cambridge Health Alliance and Harvard Medical School,
Prudential Plc, which offers health, disability, and long-term care insurance, has holdings of $1.38 billion in two tobacco companies, including British American Tobacco.
“Although investing in tobacco while selling life or health insurance may seem self-defeating,” the authors write, “insurance firms have figured out ways to profit from both. Insurers exclude smokers from coverage or, more commonly, charge them higher premiums. Insurers profit - and smokers lose - twice over.”
Researchers gathered data from Osiris, a proprietary database of industrial, banking and insurance companies.
“These data raise a red flag about the prospects of opening up vast new markets for private insurers at public expense, as has happened in our state of Massachusetts, whose recent health care reform is often cited as a model for national reform,” researchers said.
Tobacco is a contributing factor in 5.4 million deaths a year, according to the World Health Organization.
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Source: redOrbit Staff & Wire Reports
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