Smoking Conspiracy > Money > Insurance Companies Profit from Smoking

Smoking Aloud

The current anti-smoking campaign
is not about your health ...

It is all about YOUR MONEY... They want it!

Insurance Companies Profit from Smoking

It was my general understanding that insurance companies charged its customers a premium for insurance policies which they in turn reinvested to cover the eventual payouts. Insurance companies earn investment profits on “float” or collected in insurance premiums that has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out.

Profit = earned premium + investment income - incurred loss - underwriting expenses.

The more efficiently they did that, the more money they made.

Apparently, they have not done that very well and now expect somebody to bail them out of their bad investments. As we learned in 2007 and '08, the big insurance companies had invested in the derivatives market and lost $Trillions. As a result of AIG's inability to support its many Credit Default Swap commitments, American taxpayers were called upon to provide $180 billion to bail them out of their financial mess.

Seeing an opportunity to capitalize on the hyped-up public hysteria about smoking and recognizing the "deep pockets" of the tobacco industry, the insurance industry has chosen to target the tobacco industry and cigarette smokers to further line their pockets with ill-gotten profits.

Consider Blue Cross and Blue Shield of Minnesota who sued cigarette makers to recover $1.77 billion they say they spent to treat smoking-related illnesses. What in the world were they supposed to do with that $1.77 billion? That's supposedly the business they're in ... taking your money to pay for your health costs.

So much for their policy holders revenues to cover their profits ... these are some greedy folks. Not only did they get money for the original insurance policy, but they got paid again for fulfilling their obligations to cover the health costs of their clients! Not bad.

And, apparently, it wasn't only health care costs the insurance companies needed to recoup. Feeling pretty proud about their deception of the American public and their burgeoning windfall of stealing more of your money, they rewarded themselves pretty well with salary increases that exceed the total income of many of their victims.

Median annual earnings of full-time wage and salaried underwriters rose to $48,550 in 2004, up from about $30,800 in 1994. The middle 50 percent increased their earnings to between $37,490 and $65,450 a year, up from between $22,000 and $40,500 10 years ago. The lowest 10 percent almost doubled their income from $18,600 to $30,410; the top 10 percent increased to more than $86,110 a year, up from $54,800.

In March 2009, it was publicly disclosed that the American International Group (AIG) was to pay approximately $218 million in bonus payments to employees of its financial services division.

As politicians and Americans across the nation are debating health care reform and nationalized health care, their conversations are about the wrong issues. Instead of debating public options or doctor choice, what they really should be talking about is how long the criminals in the insurance and banking industries should be spending in jail for their fraud and theft of the American taxpayer.

I repeat my original premise: "The current anti-smoking campaign is not about your health ... It is all about YOUR MONEY... They want it!

Insurance Hypocrisy

Drunk Driving When was the last time you saw a smoker swerving down the road, running over pedestrians, or crossing the center lane hitting another car head-on?

So, why do smokers often pay more for automobile insurance?

Princess Diana CrashDoes the insurance agents ask you if you drink liquor? Of course not, but they do often ask whether you're a smoker. Now, who's more likely to cause an automobile accident ... someone on his 10th cigarette or someone on his 10th highball? Cigarettes were not cited as a contributor to the 120 mph auto crash that killed Diana, Princess of Wales, and her two companions. But, the driver was found to be drunk.

Hardly a week passes without newspaper reports of accidents, shootings, and robberies related to alcohol-use, but do they make an issue or charge you extra if you drink?

"We have a situation in the United States where we're spending $15 billion on the war on drugs, and yet we allow billions of dollars to be freely spent to promote the drug (alcohol) that kills more than any other drug."
- U. S. Representative Joseph P. Kennedy II

What's replacing the banned tobacco ads? Alcohol and drugs! As if we don't have enough drunk drivers on the roads already, more and more people are being encouraged to drink through an increase of liquor advertising. No double standard here!

In another move to heighten the hypocrisy of the anti-smoking movement, as of Jan. 1, 1998, California has banned smoking from even within, of all places, Bars. Oh, it's okay to get drunk before getting out on the streets and highways, but God forbid that you should smoke a cigarette while getting inebriated. What an act of foolishness!

  • The median age at which children begin drinking is just over 13 years old.
  • 26% of eighth graders, 40% of tenth graders, and 50% of twelfth graders report having used alcohol in the past month.
  • 18% of eighth graders, 38% of tenth graders, and 52% of twelfth graders report having been drunk at least once in the last year.
  • One-quarter of sixth graders say it is "fairly easy" or "very easy" to get beer. 15% say it is easy to get liquor. A study conducted in Washington, D.C., revealed that 19- and 20-year-old males were able to purchase a six-pack of beer in 97 out of 100 attempts.
  • Among ninth grade students, alcohol or other drug use, or a combination of substances, was the best predictor of early sexual activity. For youth, alcohol use more than any other single factor is indirectly responsible for more pregnancies, sexually transmitted diseases, and HIV infections.
  • Many of the radio stations on which Seagram airs gin ads feature youth-oriented rock and roll or album-oriented rock formats that target audiences officially designated 18 and above. In reality, many younger teens listen to those stations.

It should be clear to anyone who can read (those who can't already don't believe them) that these anti-smoking "do-gooders" really don't care one whit about you, your children, or your health. They do care about your money, however. So much so that they will do anything and say anything to convince you to give more of it to them.

Consider the success they have already had in recent years in convincing you to give them more of your money.

Personal Consumption Expenditures (billons of dollars)
Source: Bureau of Economic Analysis, U.S. Dept. of Commerce

1989 1990 1991 1992 1993 1994 1995
Tobacco Products 40.5 43.4 43.8 49.6 47.0 47.7 47.2
Drug preparations 55.0 60.6 70.9 75.0 77.9 81.7 85.7
Physicians 121.6 133.8 152.1 167.2 172.9 179.8 189.8
Hospitals & Nursing Care 209.5 231.3 293.4 320.0 344.4 363.8 383.6
Health Insurance 31.2 36.6 37.3 42.7 51.7 57.0 61.3

Tobacco products show an increase of only 16.5% of Americans spending between 1989 and 1995 compared with an increase of 56% for drug preparations and physicians, 83% increase for hospitals & nursing care, and a whopping 96% increase for health insurance.

According to a survey by Modern Healthcare magazine, half of all hospital CEO's earned $165,500 or more in 1995.

I ask you, "Who's getting your money?"

Motivation for Deception

Take a look at the following data comparing revenues of the insurance and tobacco industries between 1989 and 1995. You'll notice the revenues of the leading insurance companies have been drastically reduced while the revenues in the tobacco industry have increased.

Insurance Revenues (millions of dollars)
1989 1995
Prudential Insurance of America 129,118 41,330
Metropolitan Life Insurance 98,740 27,977
New York Life Ins. 37,302 16,202
Aetna Life & Casualty 52,023 12,978
Tobacco Revenues (millions of dollars)
1989 1995
Phillip Morris 39,069 53,139
R.J. Reynolds 15,224 16,008
American Brands 7,265 5,905
Universal 2,920 3,281
UST 670 1,300
Source: The World Almanac and Book of Facts, 1997

Do you see any clue here as to what industry might have a reason to assault another industry? I would suggest the insurance industry has a high motivation to disparage the tobacco industry, and they have gained the support of government bureaucrats and many deceived Americans in stealing your money.

Politically Incorrect


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