It appears life and health insurance companies in the U.S., Canada and Europe have been caught dining on fast-food profits – nearly $2 billion worth – when they encourage their members to eschew these treats in the name of wellness. At least that’s the case an article from Harvard researchers, published in the April 15 edition of American Journal of Public Health, tries to make.
What researchers found is that stock portfolios of the insurance companies, which primarily offer life insurance products, include investments in fast-food giants like McDonald’s. For instance, Northwestern Mutual, for example, has $318.1 million in stocks in Mickey D’s and MassMutual has $267.2 million in stock in Big Macs and sides of fries, researchers say.
New Jersey-based Prudential Financial, which offers life insurance and long-term disability coverage, has total fast-food holdings of $355.5 million, including $197.2 million of stock in McDonald’s and also has “significant stakes” in Burger King and Jack-in-the-Box, researchers said in a statement. Holland-based ING, an investment firm that also offers life and disability insurance, has total fast-food holdings of $406.1 million, including $12.3 million in Jack in the Box, $311 million in McDonald’s, and $82.1 million in Yum! Brands (owner of Pizza Hut, KFC and Taco Bell) stock, researchers found.
The argument the researchers make is that in the wake of U.S. health care reform, which will force another 32 million people into buying health insurance, the companies that will provide that coverage are major investors in companies that could make people sicker. “Our data illustrate the extent to which the insurance industry seeks to turn a profit above all else,” said Wesley Boyd, senior author of the study, in a statement. “Safeguarding people’s health and well-being take a back seat to making money.”
It’s a flimsy argument for two reasons. First, most of us with mutual funds have shares in companies that provide goods and/or services we may or may not appreciate. Only researchers at Harvard have time to look. Most of us prefer to look at the return on our investment, protected from the knowledge by the innocuous name of the fund and the voluminous annual report, too daunting to tackle.
Second, like individual investors, insurance companies must earn the best return for their investment, especially as health care reform will force them to tighten their belts many more notches. If the argument is that insurance companies should divest themselves of these interests and accept lower profits, then the loss of investment returns will just mean rates will have to increase even more. Or, if the implication is that insurance companies are investing in these fast-food companies to create more sick people so they can deliver more services and make more money, then critics of health insurers are grabbing at McDonald’s fat straws.
Fast-food, big profits and the silliest attack on insurers yet via IFAwebnews.com .
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