It may come as a surprise to discover that AXA, one of the largest providers of health and life insurance, has €1.8 billion in assets in the smoking/tobacco industry.
The French insurance company has revealed it is planning to sell its tobacco assets, citing the impact it has on public health.
A sensible move, but why invest so heavily in an industry that is sure to contribute to health and life insurance pay outs? The fact that AXA admits the divestment will cost the company reveals that it was a profitable venture, despite the obvious connection between smoking and ill health. A change of hearth, it seems, is behind the decision.
Chief Executive Thomas Buberl said in a company statement: “We strongly believe in the positive role insurance can play in society, and that insurers are part of the solution when it comes to health prevention to protect our clients. Hence, it makes no sense for us to continue our investments within the tobacco industry.
“With this divestment from tobacco, we are doing our share to support the efforts of governments around the world. This decision has a cost for us, but the case for divestment is clear: the human cost of tobacco is tragic; its economic cost is huge. As a major investor and a leading health insurer, the AXA Group wants to be part of the solution, and our hope is that others in our industry will do the same.”
AXA will sell its equity holdings in tobacco companies and will stop all new investments, running off its existing bond holdings. The move should be welcomed, and has already been praised by health groups.
AXA released the below infogrpahic with the annoucement: