French insurer Axa pulls out of tobacco industry

Axa said the role of health insurers was changing as healthcare would focus in the future on prevention, not just on the cure, as the world battles with six million deaths from tobacco a year.

Urging other insurers to take a similar stand, the company said it would immediately sell its equity holdings in tobacco companies, which currently are valued at about 200 million euros.

It will also halt all new investments in tobacco industry corporate bonds and run down its existing tobacco industry bond holdings, valued at about 1.6 billion euros, it said in a statement.

“As a responsible health insurer and investor, the AXA group has decided to divest its tobacco industry assets, currently valued at approximately 1.8 billion euros,” it said.

Thomas Buberl, Axa’s deputy chief executive, said that through the divestment, the company was doing its “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,” he added.

Axa, whose revenues from its health care business reached almost 12 billion euros last year, is the first global insurer to take this step, a spokesman for the group told AFP.

Axa, second in Europe only to German giant Allianz, said as a major investor it wanted to be “part of the solution, and our hope is that others in our industry will do the same”.

Axa warned that without urgent action to curb the rise in smoking-related deaths, tobacco was expected to kill one billion people worldwide during the 21st century.

“Its cost, estimated at 2.1 trillion euros per year, equals the combined expenses of war and terrorism,” the company, which a year ago also said it was pulling out of the coal sector, added.

On Friday, new laws on plain packaging for branded cigarette packets took effect in Britain and France.

Despite resistance from tobacco companies, new neutral packs will be introduced in both countries over the coming months.

It follows similar legislation in Australia, credited with helping to cut down on smoking rates, especially among young people.