If any industry should know the statistics verifying the deadly impact of smoking, that industry would be the life insurance industry. Insurers know that smokers have double to triple the mortality rate compared to non-smokers — which is why companies like Prudential won’t even grant life insurance to those who smoke, or else they charge smokers exorbitant premiums. And yet, demonstrating an extraordinary degree of cynicism, some of the world’s largest life insurance companies invest heavily in tobacco. In fact, insurance company investments in tobacco industry stocks amount to $4.5 billion.

According to a report out of Harvard University and just published in the New England Journal of Medicine, life and disability insurance companies own billions of dollars in tobacco stock. The American Medical Association and other organizations have put pressure on these companies to divest these holdings, but to no avail. The message, it would seem, is that the bottom line counts far more than saving lives.

As Dr. David Himmelstein, one of the study authors said, “It’s the combined taxidermist and veterinarian approach: either way you get your dog back.”

The tobacco-friendly insurance companies named in the report include Prudential, which owns $1.5 billion in tobacco stock (including US and British divisions), and Sun Life Financial, with over one billion dollars in tobacco investments. Both of these companies also sell health insurance. The study also named Northwestern Mutual and MassMutual, attributed to hold over $200 million and $500 million, respectively, in tobacco company shares, although both of those companies contest those figures and claim that their investments amount to far less. Sun Life also contests the figures, plus defends its tobacco investments by pointing to the company’s socially conscious investments — $1.2 billion in renewable energy and another billion to renovate hospitals — as if doing some good things buys the license to do some very wrong things. Or to put it another way, they wish to be accounted good guys because they’re only responsible for contributing to the deaths of 250,000 people a year, not 500,000. Perhaps, we could call it the “Sun Life Defense” as an updated homage to the Nuremberg Defense.

Perhaps the most startling numbers apply to TIAA-CREF, the retirement fund for teachers in the United States. TIAA-CREF owns over a billion dollars in tobacco investments. Although plan participants can elect to avoid supporting tobacco stock and instead buy only socially responsible investments. Still, it seems unconscionable that a company that supports the educational system, albeit indirectly, would simultaneously support tobacco interests.

Incidentally, Northwestern Mutual, Mass Mutual, and TIAA-CREF are consistently ranked in the top-5 of America’s Most Admired insurance companies. But that doesn’t seem to stop Jean Towell, spokesperson for Northwestern Mutual, from stating, “We ultimately have a fiduciary responsibility to our clients.” Apparently, Ms. Towell hasn’t twigged that supporting interests that kill might actually not be that admirable. This is not hyberbole. Tobacco products are instrumental in the death of 5.4 million people worldwide each year, and as I’ve written before, tobacco companies have done a great job of pushing their products in underdeveloped and poor nations.

It should be noted that when pressure in the developed world caused tobacco companies to cut back on advertising, the tobacco industry launched relentless campaigns in places where the word wasn’t yet out about just how deadly smoking is — places like Russia, China, Africa, and India. The results were a 75 percent increase in smoking rates in Africa, a 100 percent increase in Russia since the collapse of the Soviet Union, a 91 percent increase in tobacco exports to China, and so on. Currently, about 12 percent of cancer cases in less developed countries result from smoking, but experts anticipate a momentous rise in that figure since major health ramifications from smoking can take three to four decades to hit — and already, lung cancer is the leading cause of cancer deaths worldwide.

But tobacco stocks are considered among the most reliable investments in this shaky economy, with Altria Group (formerly Phillip Morris) stock yielding over seven percent and Reynolds American at 8.6 percent. Apparently, it’s a golden ring too alluring to resist for the money hungry investors, no matter the consequences. So insurance companies downplay the evil wrought because tobacco is only part of their portfolio in order to bet both sides of the equation. In this way they can profit whether subscribers live or die (if a customer dies from smoking and thus stops paying premiums, the company at least continues to make profit from all the other people in the world who nevertheless continue to smoke). Meanwhile tobacco continues to kill increasing numbers of people.

But that’s not the truly dark side of the situation. We haven’t discussed that yet!

Dr. Himmelstein notes that the impact of the insurance investment in tobacco extends beyond the obvious. “If you own a billion dollars [of tobacco stock], then you don’t want to see it go down. You are less likely to join anti-tobacco coalitions, endorse anti-tobacco legislation, basically, anything most health companies would want to participate in.”

In other words, investment in tobacco is not merely a passive activity. It gives you a financial incentive to support efforts to induce ever larger numbers of people to smoke and die — particularly if you can outsource most of those numbers to “foreign” countries. The bottom line is that if you invest in big tobacco, it’s not just about money; it’s about actively participating in global murder. And just like the Nuremberg defense did not hold up in the court of public opinion, neither does the Sun Life defense.

In any event, if you want to invest in companies that avoid unethical practices, check out the social investment forum.

:hc