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In a statement released by ASIC it was revealed that four of the websites operated by Insure 247 were believed to contain “misleading or deceptive advertising”.
That’s a pretty serious allegation, but it appears that the parties involved have been able to make the necessary changes to the websites without too much drama.
There were two main issues involved.
The statement from ASIC shows that they had serious concerns with some of the text used on the websites:
“ASIC was concerned the websites gave the impression consumers were accessing an online tool which compared the features and the cost of different insurance products. ASIC’s review found there was no evaluation or comparison of the products.”
One such example was the text “compare thousands of insurances from fifty different insurers”, but upon investigation there was no such comparison offered.
In my opinion this was probably just a copywriter getting a little over excited, but the fact is you simply cannot make claims on an insurance related website unless they are factual.
Insure 247 are not alone however, as over the years I’ve seen plenty of misleading text on insurance related websites.
I don’t think there is a deliberate intention to mislead people in most cases, but if someone can be misled then it doesn’t really matter whether it was deliberate or not.
Insurance company logos
The second issue was the use of insurance company logos, which ASIC made the following comments about:
“Further, ASIC found Insure 247 displayed the logos of insurance providers that were not offering quotes for the product featured on that page of the website. For some insurance products, only one insurance provider received consumer details through the website when consumers were likely to think their details would be passed on to many insurers.”
Using the logos of the big insurance companies is a great way to build some credibility for a financial adviser or insurance broker’s website.
There is nothing wrong with doing so, and I even have a selection of logos on my own firm’s website, but don’t go displaying logos of insurance companies if you don’t use them!
It’s fair enough for a consumer to expect that if they see certain logos on your website then you’ll be using or at least comparing the products offered by those insurers.
The lesson here for website owners, regardless of whether you’re an AFSL holder, an authorised representative or just an online marketer, is that you need to make sure your website does not have the potential to mislead or deceive.
Lifebroker was founded in 2004 and has grown to be one of the top two largest online providers of life insurance.
TAL has owned a 10% stake in the business for the last three years, and this week moved to full ownership of the business.
Of most interest to me was the amount paid for the remaining 90%, but sadly the purchase price has not been released.
What we do know is that TAL’s parent company, The Dai-ichi Life Company, valued Lifebroker at $28 million in June this year.
Presumably the existing owners would have sought a premium in return for relinquishing their entire shareholding, in which case it would be safe to assume that the final valuation was somewhere in excess of $30 million.
That’s a hefty chunk of money in anyone’s language, and it shows the level of confidence that TAL has in the continued growth of online life insurance.
Unfortunately it also shows how focused TAL is on the direct insurance market, which in my opinion could lead to more Australians taking the DIY approach instead of seeking professional advice.
In case you didn’t know, TAL also owns the InsuranceLine brand which is heavily promoted on television.
What is Lifebroker?
So what exactly has TAL bought themselves?
Lifebroker is a website that allows consumers to compare premiums for life insurance from a range of insurance providers.
In addition to life insurance, consumers can also access trauma, TPD, income protection, mortgage protection and funeral insurance.
Lifebroker compares policies from a range of insurers including AIA, AMP, Asteron, BT, Comminsure, Macquarie, MLC, OnePath, Zurich and of course TAL.
It’s not clear whether or not Lifebroker will continue offering non-TAL products, but based on comments from TAL’s CEO, Brett Clark, it would appear that they will:
“Lifebroker has built a reputation on the objective comparison on life insurance products from a range of different life insurers.”
“We strongly support consumer choice and a competitive life insurance market.”
That’s good news in my opinion, because the last thing we need is another so-called comparison website which only compares products from a single insurer.
Personally I still believe there is a big conflict of interest in an insurance company owning a comparison website.
Hopefully TAL does the right thing and makes very clear disclosures on the Lifebroker website rather than burying it in the FSG.
Provided that they do that, then good luck to them and I take my hat off to TAL for investing in online assets whilst the others are left behind.