More than two thirds of insurance advertisements are failing to meet FSA rules on the clarity of promotions, research conducted by consultant Grant Thornton has found.

The research found "significant" flaws in 61% of insurance adverts and promotions, including misleading statements and headline-grabbing cheap deals that were unavailable in practice.

The findings come only weeks after the FSA issued a warning to insurers and brokers over the quality of advertising, particularly in the case of advertisements claiming to match or beat competitors' quotes.

The regulator warned it would take enforcement action if firms did not make price information "clear, fair and not misleading".

Ian Gorham, a partner within Grant Thornton's financial markets group, said: "These flaws are driven by intense competition to attract customers. It is absolutely critical that the industry takes the FSA requirements more seriously.

"While the FSA does use financial penalties for organisations breaching its criteria, companies must also consider the long-term damage to the reputation of their brands, the loss of trust in the eyes of their target market and the potential to build up a large population of people who have bought a product under false perceptions," Gorham said.

Truth about advertising
Grant Thornton's research into insurance advertising and promotions revealed:

  • 61% had "significant" flaws
  • 61% made misleading statements
  • 54% made non-compliant "headline- grabbing" price-related claims
  • 8% of adverts needed to improve clarity.