Brokers take on Dial Direct and lose!
Rapidly growing short-term insurance company, Dial Direct, which offers consumers direct access to and advice on motor and household insurance, recently created a stir in the market when it was taken to the Advertising Standards Authority (ASA) by two of the largest Broker associations in South Africa, namely SAFSIA and the IBC, for its advertising campaign which ran in 2003.
The first complaint to the ASA, lodged by both associations, dealt with Dial Direct's print, brochure and e-mail ads which referred to the saving that consumers could enjoy by going direct and cutting out the middleman. The ASA ruling allowed Dial Direct to continue referring to a saving in their advertising. On a second point, that by going direct, consumers would gain the benefit of having a longer and better relationship with their insurer, the ASA ruled in favour of Dial Direct, stating that although this allegation was to some extent, puffery, Dial Direct customers would certainly have a longer and direct relationship with the insurer since customers using brokers have no direct relationship with their insurer at all.
A further complaint in 2003 was one the IBC SA lodged with the ASA regarding a further Dial Direct advertisement in which is was stated that there was no need for an insurance broker “as a broker can take 25% or more of your insurance payments”.
Here, the ASA ruled collectively in favour of Dial Direct. The ASA ruled that Dial Direct's claim was not factually inaccurate and felt that it was unlikely to mislead the average consumer and therefore, the advertisement did not contravene the original Tribunal ruling. Says Lenerd Louw , director of Dial Direct, “It is Dial Direct's mission to be the consumer's hero by saving them time and money. For too long, brokers have been allowed to dominate and dictate to the insuring public in South Africa . This ruling ensures that consumers are given the right to choose. We intend to strenuously defend our right to explain the savings to consumers and are pleased that the ASA's ruling allows us to fight on behalf of the consumer for their rights to know the truth. We will continue to advertise the benefits that the consumer can receive if they go direct.”
Continues Louw, “The latest ASA ruling is not only a victory for Dial Direct, but a victory for the South African consumer who is entitled to be made aware of the benefits and savings of insuring direct.”