Insurance Business – Terry Gangcuangco
The tobacco sector might soon find itself huffing and puffing as another huge firm has decided to get rid of its holdings in tobacco companies.
Following a review of its investment position which began early last year, British life insurer Aviva has decided to stop investing in the sector and said it will divest over time. A Reuters report said Aviva considers tobacco as harmful when used as intended.
The insurer is selling about £1 billion worth of bonds and shares in a move aimed to put further pressure on governments and firms to counter the negative effects of tobacco on public health. However, Aviva will not touch third-party tobacco investments as part of this global anti-tobacco campaign.
“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,” now AXAchief executive Thomas Buberl said last year. “Hence, it makes no sense for us to continue our investments within the tobacco industry.”
A Financial Times report said financial institutions have in recent years divested an estimated US$4 billion from tobacco, which is reportedly responsible for six million deaths annually.