I am too outraged right now to indulge in preamble.
Insurance companies often grumble that cynics don’t appreciate the complexities of their business practices. It’s too intricate to be judged by industry outsiders, they complain. But it would be hard to say that about Life Insurance Corporation of India. LIC’s business pattern is quite revealing and shocking.
‘Desi’ insurance behemoth, LIC of India, has a cool 15% stake in Tobacco giant, the Indian Tobacco Company (ITC). It is inconceivable that the guardians of health share a mutually-beneficial relationship with the merchants of death! In essence, LIC has transformed healthcare into a business whose goal is money-making.
The LIC invested heavily in ITC during 2011. The number of equity shares held by LIC in ITC Ltd was around 99.58 crores, with a book value of approximately Rs. 3,561 crore on March 31, 2011.
Wait, it gets murkier.
The Right to Information (RTI) further revealed that LIC and the other insurance companies, alongwith Government’s Unit Trust of India (UTI), hold a baffling 31.97% equity in ITC. Upon closer examination, it was laid bare that the top-six public shareholders of ITC ltd. happened to be insurance companies and the Government of India! Why, then, will the Indian government ever ban sale of cigarettes?
The World Health Organization says nearly six million smokers are condemned to death every year. LIC’s investment in the tobacco company is morally wrong, it is a slap on the face of millions of trusting Indians, who blindly place their faith in LIC. The advertisements and the aggressive marketing of its various insurance policies reflect a paradigm shift in its thought process.
Profit in the health insurance industry is the single greatest barrier to building an efficient, sustainable system of healthcare. But it’s easy to comprehend LIC’s interest in ITC. As of 2012-13, ITC ltd. had an annual turnover of US$8.31 billion, and a market capitalisation of US$45 billion! But then, LIC is no mean entity either, with an estimated asset value of US$240 billion! So why associate with an industry which has no qualms about transporting millions to death every year?
Insatiable in its greed for more, the state-run insurer holds shares worth about Rs 2.33 lakh crore in all the companies on stock exchange put together. Among the Nifty companies, LIC’s holding in terms of value is estimated to be highest in ITC – Rs. 27,326 crore! It’s a mockery of faith on the part of LIC.
India’s tobacco market is worth Rs. 65,000 crores, selling 80% of cigarettes in India, and it is killing hundreds every second. No self-respecting company, let alone a Government-run company like LIC, will ever contemplate sharing profits with a business house that survives and flourishes at the cost of death!
In an effort to neutralize its damning effect on the health of the society, ITC advertises and promotes, sending out misguiding messages. It’s an attempt to make Cigarettes seem like any other consumer product. Experts have conceded that it’s a clever tactic, as it increases its social acceptability and hampers efforts to educate people about the hazards of tobacco use.
Tobacco companies market their products with an objective to associate tobacco with desirable qualities, such as energy, glamour and sex appeal. It is an age-old ploy. It also strengthens the tobacco industry’s influence over media, sporting and entertainment businesses.
ITC frequently engages in activities that it conveniently categorises as ‘corporate social responsibility’ (CSR), including sponsorship of research, charities and community projects. ITC ‘s CSR initiative is intended to improve its image as socially acceptable, financial contributors to India’s GDP. It also persuades governments to desist from imposing bans.
People’s right to live free from addiction supersedes the economic interests of the tobacco industry, and LIC knows this.