Knesset to cast eye on Direct Insurance's dual branding
Single company sells policies under different names.
After months of unanswered complaints, the Knesset is turning its attention to the dual branding controversy surrounding Direct Insurance Financial Investments.
An urgent hearing on the company's purportedly misleading use of two separate and distinct marketing campaigns for the same service was placed this week on the agenda of the Economic Affairs Committee.
IDI Insurance Company, the insurance arm of Direct Insurance, operates under two brand names: "Nine Million" (9-000-000) and "Dial 5 - Direct Insurance" (555-5555). Both offer the same service and are staffed by the same telephone sales and service representatives.
Consumers, however, are apparently given the impression that these phone numbers are run by two different competing companies; they in fact both access the very same insurance firm.
MKs Faina Kirshenbaum (Yisrael Beiteinu), who chairs the Finance Committee's subcommittee for insurance; Danny Danon (Likud); Shai Hermesh (Kadima); and Chaim Amsellem (Shas) have led the charge to bring the issue before the Knesset, where it is expected to come up for discussion within the next two weeks.
Oded Sarig, the Finance Ministry's capital markets commissioner, had already been approached by MKs and insurance brokers about the issue several months ago.
But despite his call for an end to the use of potentially misleading brand names by insurance companies, Direct Insurance continues to ply its services under both identities.
"The public deserves accountability on the false representation apparently displayed by Direct Insurance," said Kirshenbaum. "In my humble opinion, the situation where a single call center operator possesses the same information and answers the calls for both 9-000-000 and Direct Insurance borders on illegal behavior."
Hermesh said the regulator failed to issue explicit instructions on the matter, adding, "Such instructions are a critical element in maintaining a fair, competitive market. It seems the regulator was inhibited from acting on this issue and its enforcement."
Over the past two years, Direct Insurance has launched stinging ad campaigns against insurance brokers, portraying them as redundant and living high on the hog thanks to high-priced insurance peddled to customers.
Brokers have fought back, raising a public outcry against the company's ambiguous marketing campaigns.
Direct Insurance responded: "The company operates through its brands, each involving its own marketing strategy, as common throughout the world, fully transparently and with the insurance commissioner's knowledge and approval.
"This is a continuation of attempts by insurance brokers to prevent competition within the insurance industry. IDI Insurance will continue its direct consumer revolution and won't be deterred from continuing its efforts for the benefit of the public and the Israeli economy.
"We regret that Knesset members acting in good faith are apparently helping to preserve unnecessary brokerage commissions and thereby obstructing price reductions."