Health Insurers Want You to Smoke?
Monday, June 15th, 2009
Life and health insurance companies in the U.S., Canada and Britain have invested billions of dollars in big tobacco? Yes they have, says the New England Journal of Medicine. A study published this month says life and health insurers have shoveled $4.4 billion into companies whose affiliates produce cigarettes, cigars and chewing tobacco.
Among the insurers and their tobacco investments are Prudential Financial Inc., which invested $264.3 million in three U.S. tobacco companies, including Reynolds America and Philip Morris. Canada’s Sun Life Financial has more than $1 billion in tobacco investments, including Philip Morris. The U.S. firms Northwestern Mutual and Massachusetts Mutual Life also have substantial tobacco investments.
“It’s the combined taxidermist and veterinarian approach: either way you get your dog back,” said Dr. David Himmelstein of Harvard Medical School in a letter to New England Journal of Medicine.
Smoking accounts for nearly 90% of lung cancer cases. Further, smokers who are exposed to asbestos are more likely to develop asbestos-related diseases, such as asbestosis and mesothelioma, than non-smokers. People who develop asbestosis are advised to quit smoking to prolong their lives.
Brendan Borrell writes for Scientific American that doctors have complained about the tobacco investments in the past and possibly had an impact. Past targets Cigna and MetLife have dropped off the list. The doctors believe that insurance companies heavily invested in tobacco companies are less likely to support anti-tobacco legislation.
As I wrote a few days ago, insurance companies make most of their money from investment income, not premiums. Recent increases in insurance premiums rates are mostly the result of poor investment returns.
June 15, 2009
Barbara O’Brien
