Fast food fueled by insurance firms
Caitlin Yoshiko Buysse | 4/20/2010, 7:50 p.m.
In yet another slam against the life and health insurance industries, a recent study compiled by Harvard researchers detailed billions of dollars of industry money invested in fast food restaurants — an apparent contradiction, given the role fast food has played in the nation’s obesity crisis.
Major insurers in the United States, Canada and Europe own more than $1.88 billion in stocks in the five leading fast food companies: McDonald’s, Burger King, Wendy’s/Arby’s, Jack in the Box, and Yum! Brands, which own KFC, Pizza Hut and Taco Bell.
This $1.88 billion investment is almost twice the average annual investment President Obama has requested for improving the National School Lunch and Breakfast Program, which provides healthy free or low-cost meals to students.
The investments in fast food also exceed — by nearly five times — the annual budget for President Obama’s new Healthy Food Financing Initiative, a program that seeks to improve the quality of food in low-income areas.
“What we’re doing in our paper is reminding people that [the industry’s] primary interests are in earning money and generating profit, not in insuring people’s health,” said Dr. J. Wesley Boyd, one of the study’s authors and a psychiatrist at Cambridge Health Alliance.
While investing in fast food may seem at odds with selling health and life insurance, Boyd explained how companies could make big profits.
“First of all, they’re making money by directly investing in fast food,” he said. “And secondly, they’re making money by often charging higher premiums to people who are eating a little too much fast food and are obese, have diabetes, cardiovascular disease, high blood pressure, etc.”
Massachusetts Mutual, a Springfield, Mass.-based company that offers life, disability and long-term care insurance, owns more than $366.5 million in fast food stocks — with $267 million in McDonald’s stock alone.
But at $422.2 million, Northwestern Mutual holds the greatest amount of stocks in fast food companies.
U.S.-based Guardian Life, MetLife and New York Life, which offer health insurance, in addition to life, disability, and long-term care insurance, have their own smaller investments in the fast food industry.
Spokesmen for Massachusetts Mutual and Northwestern Mutual disputed the researchers’ figures.
Last year, Americans spent an estimated $185 billion on fast food — and these purchases constituted about 12 percent of the nation’s total caloric intake.
These numbers represent a dramatic increase in the past few decades; since 1970, fast food spending has increased more than 30 times.
This consumption of fast food has been linked to the rapidly growing obesity epidemic in the United States, where one in three adults is obese. Obesity can lead to other health problems, like diabetes, high blood pressure and congestive heart failure.
But fast food is not the only industry that insurance companies invest in. In a similar study published last year, Boyd revealed that life and health insurance companies’ investments in the tobacco industry reached $4.44 billion.
At $585.3 million, Massachusetts Mutual owns even more stocks in tobacco than in fast food. Philip Morris, one of the nation’s leading tobacco firms, is the insurance company’s greatest investment, at $412.6 million.
Unlike fast food, which the study says, “can be consumed responsibly,” tobacco is “inarguably harmful and addictive.”
However, both tobacco and poor diet are the top two leading causes of death in the United States, according to the Journal of the American Medical Association. While the percentage of tobacco deaths has decreased since 1990, the percentage for poor diet and physical inactivity has risen, and soon may overtake tobacco as a leading cause of death in the United States.
“If the insurance industry is willing to invest in products known to be harmful and/or kill people, then, prima-facie, that is not an industry that actually cares about health and well-being,” Boyd said.
With their findings, the Harvard authors have called on insurance companies “to divest themselves of holdings in fast food companies as well as other industries that have a clearly negative public health impact.”
If the companies refuse to do this, the authors alternatively recommend that they “mitigate the harms of fast food by leveraging their positions as owners of fast food companies to force the adoption of practices consistent with widely accepted public health principles.”