Insurers invest in tobacco stocks?

A letter posted June 4, 2009, in the New England Journal of Medicine, states that insurance companies across the globe, have considerable investments in tobacco.

The author, Dr. Wesley Boyd, states that insurance companies have over $4 billion in tobacco company investments.

An example provided, is the U.S.-based Prudential Financial company. Prudential is a provider of life insurance and long-term disability coverage. Their total tobacco holdings are over $264 million.

The U.K.-based Prudential, which offers long-term care, disability and life insurance has nearly $1.4 billion invested in tobacco.

Standard Life, which is another UK-based company with Canadian operations, is stated to own nearly $950 million in tobacco stock.

Sun Life, a Canadian company, which offers disability, life, health, and long-term care insurance, owns over $1 billion in tobacco stock.

Dr. Boyd declared, that although investing in tobacco while selling life or health insurance may seem self-defeating, 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.