Financial planning firm, Centric Wealth, has commended the Australian Securities and Investment Commission’s crackdown on false advertising from insurance websites.
Centric Wealth’s joint head of group risk and corporate benefits, Roy Agranat, said the online insurance industry had mushroomed with the development of new technology, however many consumers were unaware of the products they were buying.
“In reality people don’t fully understand the terms and conditions they’re accepting, the premium rates they’re accepting, and the exclusions and definitions they’re accepting and, ultimately, price is forgotten after a bad claims experience,” he said.
Agranat’s comments follow ASIC’s announcement on Monday that it had successfully pushed insurance website www.insure247.com.au, which is a related company to the Hollard Insurance Company and Real Insurance, to make changes to its marketing campaign after concerns that it contained misleading or deceptive advertising.
ASIC found www.insure247.com.au displayed the logos of multiple insurance providers, but only one provider received consumer details through the website. This gave consumers the wrong impression that their details were being passed on to many insurers.
ASIC has also expressed concerns about insurance websites www.quotesonline.com.au, www.greatchoice.com.au and www.ezisure.com.au. The regulator believed these websites gave the impression consumers were accessing an online tool that compared the features and costs of different insurance products when no evaluation or comparison was being performed.
Agranat said in many cases consumers could secure cover at a similar price with more attractive terms by seeing a specialist risk adviser and going through the underwriting process.
Agranat also raised concerns that some policies sold online were white-labelled solutions that were at higher risk of being unsupported, or failing, in the future.
“Furthermore, it can be unclear which version of the product people are buying given that there can be multiple permutations of the product,” he said.
Deputy chair of ASIC, Peter Kell, said operators of websites needed to ensure they accurately portrayed the features and limitations of the services they advertised.
