The Australian regulator, the Australian Securities and Investments Commission (ASIC), has recently stepped in to stop Choosi, an insurance comparison aggregator. They claim the company deceived consumers through its insurance comparison services. Choosi has come a long way since the partnership started six years back. From July 1, 2019, to November 30, 2024, they had issued 4,225 funeral insurance policies and 9,478 life insurance policies.
ASIC’s deputy chair, Sarah Court, stated that Choosi’s messaging has reached millions of individuals during this period. The regulator alleges Choosi misled consumers by failing to adequately explain the narrowness of its comparisons. These comparative analyses often focused on specialty products from Hannover Insurance, a global insurer with two other subsidiaries doing business in Australia.
And the court emphasized how important transparency is in the insurance comparison industry. If the Federal Court finds that ASIC’s allegations are made out, Choosi faces heavy penalties.
The Role of Insurance Comparison Websites
Insurance comparison websites are an important part of helping consumers find their way through these options. Opines Court, that doesn’t absolve them of their duty to conduct the public’s business in public. “Anyone that is a commercial provider offering a comparison website, you have to be up-front with what it is you are comparing,” she stated. “You need to be transparent with anyone, any consumer that’s coming on to use your site.”
Court emphasized that although comparison sites can provide a meaningful service by helping consumers identify affordable insurance options, they cannot mislead consumers about their services. “We know that this was a very widespread advertising campaign by Choosi over many years… and we know there have been thousands of policies that have been sold,” she added.
Choosi has been on a pretty aggressive advertising campaign to push its new services, with strategy including an advertorial on Today Extra. A screenshot from this advertorial that shows a Choosi spokesperson explaining the products available from the company.
Allegations Against Choosi
ASIC claims that Choosi’s platform mostly operated as a distribution channel for Hannover Insurance. It failed to provide a true apples-to-apples comparison across insurers. Court remarked on the nature of the services offered by Choosi: “What we’re alleging is that there were not a number of leading insurers or multiple insurers being compared; there was but one insurer.”
She expressed worries about the effect this would have on consumers who used the site to make full, side-by-side comparisons. “What we’re seeing here is the Choosi platform really being used by Hannover as just a platform to distribute its products, with no comparison going on with other insurers at all,” she stated.
Court’s remarks underscore the need for corporate agents of change, like Choosi, to stay on the high road. She argued that it is critically important for these types of platforms to be completely transparent about what they’re providing to consumers.
Potential Consequences and Industry Implications
The defeat of ASIC’s lawsuit would be a huge victory for Choosi and other firms operating in the burgeoning insurance comparison market. If the Federal Court finds ASIC is successful, Choosi could be liable for hundreds of millions in penalties. Yet this decision would be tremendously disruptive to their proposed operational model.
“It will be important for [ASIC] to seek substantial penalties,” Court noted. This case should serve as a wake-up call to all commercial enterprises operating in this space that transparency is key. Truthfulness is the foundation of consumer trust.
Depending on how the case proceeds, it could lay the groundwork for better regulation on how insurance comparison websites operate their business. Yet, the court underscored how invaluable these platforms are to consumers. They provide key assistance for people who struggle to pay or obtain coverage. “We know that people are finding it difficult to afford insurance, difficult to access insurance, and so comparison websites could play a really important role in helping consumers,” she said.
