The world’s largest insurer, AXA Group, is to sell out of around €1.7 billion (£1.4 billion) worth of tobacco securities, as it seeks to cut its conflicts of interest. The move is an attempt to support government efforts to reduce the number of people who smoke. As a major health insurer, AXA said its role was increasingly about prevention rather than cure (1).
Incoming Chief Executive, Thomas Buberl, told the BBC it “makes no sense” for the company to continue investing in the industry. He added that AXA was also a large provider of health insurance, and chronic diseases cost the firm a lot of money (2).
Last week, tobacco companies started selling cigarettes in standardised green packaging bearing graphic warnings of the dangers of smoking, under new rules designed to prevent young people taking up the habit (2).
Tobacco giants also failed in a last-ditch legal challenge against the government’s plain packaging rules at the High Court, when a judge rejected a judicial review action brought against Health Secretary Jeremy Hunt by four of the world’s biggest firms (2).
Effective immediately, AXA will drop its equity interest in tobacco companies, currently €200m, and cease to invest in tobacco corporate bonds, though it will hold its current €1.6bn holdings to maturity.
The group has also announced it will divest holdings in coal-related companies, worth around £385.4 million, alongside pledging to treble its renewable investment assets to at least £2.3 billion in the next four years (3).
- (1) – Axa stubs out €1.7bn tobacco industry investment – BBC News
- (2) – Insurance giant Axa stubs out ties with tobacco industry – Independent.IE
- (3) – AXA stubs out €1.7bn tobacco investment