The fast-food industry is regularly criticized for contributing to Americans’ obesity and other health problems, yet a new study shows that major health and life insurance companies have invested nearly $2 billion in McDonald’s and other popular fast-food chains.
Researchers at the Cambridge Health Alliance and Harvard Medical School looked at the stock holdings of major health and life insurers in five leading fast-food companies. The results, published online today in the American Journal of Public Health, found that insurance firms have invested $1.9 billion invested in stock of companies like Jack in the Box, Burger King and Yum! Brands, owner of Pizza Hut and Taco Bell, among others.
The researchers used shareholder data from the Icarus database, which draws on Securities and Exchange Commission filings and other information.
The $1.9 billion represents only about 2 percent of the total value of fast-food company stock, but the researchers argue that insurers “ought to be held to a higher standard of corporate responsibility.” They call for insurance companies to divest themselves of holdings in fast-food firms because of the firms’ negative impact on public health.
“Life and health insurance firms profess to support health and wellness, but their choice of financial investments has raised doubts,” the researchers write.
At least one insurer, however, rejected the study’s findings. A spokesman for Massachusetts Mutual Life Insurance, which the study said had invested more than $366 million in fast-food stock, said in an e-mail that the figures were “absolutely incorrect.”
Spokesman Mark Cybulski wrote that, as of Dec. 31, 2009, MassMutual’s fast-food-related holdings were approximately “$1.4 million, representing less than one-hundredth of one percent of cash and total invested assets of $86.6 billion.”
A spokesman for Prudential Financial, which the study also cited as a substantial investor in fast food, declined to discuss specific investments. However, Theresa Miller, Prudential’s vice president for global communications, added in an e-mail that the company has a responsibility to its clients to seek “strong investment performance … while managing risk and investing responsibly.”
Senior author J. Wesley Boyd, M.D., an assistant professor of psychiatry at Harvard Medical School, contends insurers are more concerned with making a profit than in helping people stay healthy.
“Based on their investments, these companies are showing themselves to be amoral. They’re just about making money, and they will make money off bad habits even if those habits are making you sick or killing you,” he says.
But Mark Pauly, a professor of health care management at the Wharton School at the University of Pennsylvania, thinks trying to pressure insurers to divest their fast-food holdings is a bit naive.
“It may be a nice gesture for insurers to say they’re not investing in evil things anymore,” he says, “but it’s hard to imagine that it would have a substantial impact.”
A better idea, he says, “would be for the insurance companies to invest a lot more in fast food, then go to the company’s annual meeting and get them to change their policies.”
Candy Sagon writes about health issues for the AARP Bulletin.