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article imageHealth Insurers accused of investing in fast food

By Joan Firstenberg     Apr 16, 2010 in Business
You would think health insurance companies would do everything they could to help keep their subscribers healthy. But in a strange and worrisome twist, their investments may tell a bigger story than their ads and PR.
Big insurance companies like Prudential, ING, and Northwestern Mutual that offer health, disability and long-term care are allegedly making big investments in fast food chains like McDonald's and Pizza Hut. This strange situation was revealed in a study done by the American Journal of Public Health.
CBS News reports that a study author, Dr. Wesley Boyd, of Harvard Medical School, says the medical community sees an irony if not a moral issue that the insurance firms would be investing nearly $2 billion in companies that sell the kind of food that is often linked to obesity and cardiovascular disease. Boyd says...
"The insurance industry, so far as it seeks to make a profit, it does so in an amoral way."
The insurer with the most money in fast food is Northwestern Mutual. The study says this company owns $422.2 million in fast-food stocks, with $318 million invested in just McDonald's.
This is not just a practice of U.S. insurance companies. ING, based in Holland offers life and disability insurance. In its stock portfolio you will find McDonald's, Jack in the Box and Yum! Brands which owns Pizza Hut, KFC and Taco Bell.
Prudential Financial, based in New Jersey sells life insurance and long-term disability coverage. Its total fast food holdings come to $355 million with nearly $2 million of that invested in McDonald's, Burger King, Jack-in-the-Box and Yum! Brands.
The study's authors say they are concerned that with the recent passage of health care reform the insurance industry may get to play an even bigger role in health care, and for that reason should be held to a even higher standard of corporate responsibility.
Dr. Boyd, a psychiatry professor at Harvard Medical School says,
"There’s a ton of irony in it. In order to generate profits, they will invest in any area they need to … to make money, even if what they invest in, in this case fast food, is an industry that is known to cause people to get sick and to die early."
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