BBB National Programs Archive

NAD Recommends Progressive Discontinue Certain Advertising Claims Made in Comparative Context, Following Challenge from Allstate

New York, NY – May 13, 2013 – The National Advertising Division has recommended that Progressive Casualty Insurance Company discontinue certain advertising claims made in a comparative context in broadcast advertising. However, NAD found, some of the same claims – made in a stand-alone context – are truthful and accurate.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

In this case, NAD examined multiple television commercials that featured “Flo,” the animated salesperson who works in the fictitious “Progressive Store.” The commercials promoted a variety of discounts and services from Progressive, as compared to “A. Nother Insurance Co.” The advertising also featured two dim and hapless employees of “A. Nother” insurance company.
A key issue before NAD was whether the advertising claims made by Progressive against a fictional company were comparative in nature.

NAD found that while Progressive may not have intended to take aim at specific competitors, the advertising at issue could be interpreted by consumers to offer a comparison with other insurance companies.

“In particular, the commercials make specific uniqueness claims about discounts offered by Progressive that are not offered by ‘A. Nother Insurance Co.,’” NAD noted, including “a paperless discount, safe driver discount, a discount based on a telematics analysis, and a loyalty discount.”

In addition, NAD noted, the employees of “A. Nother Insurance Co.” could reasonably be understood to be insurance “agents,” reinforcing the message that comparative claims were being made against an actual competitor of Progressive’s. NAD determined that although the commercials are humorous and compare Progressive’s discounts and services to those of a fictional insurance company, the commercials clearly conveyed the comparative message that Progressive offers benefits that some (if not most) other insurance companies do not offer.

NAD recommended that Progressive discontinue claims referencing discounts in the context in which they appeared in the broadcast advertising. However, NAD noted that nothing in its decisions precluded the advertiser from promoting the discounts on a stand-alone basis, or in advertising that specifically identifies the basis of comparison.

NAD determined that the claim “The longer you stay with us, the more you save. And when you switch from another company to us, we even reward you for the time you spent there” was supported as a stand-alone claim, but recommended the advertiser modify the claim to more clearly convey its intended message: the discount is unique because it not only provides lower premiums to customers who have maintained continuous coverage with a different insurance company, but it also provides an added benefit of giving customers credit towards tenure in Progressive’s loyalty program for the period of time that they were insured with their previous company.

Finally, NAD determined that the claim “more and more people are bundling their home and auto insurance with Progressive . . . And why wouldn’t you? You can save on both your home and auto policies” was substantiated in a standalone context.

However, NAD recommended that the advertiser modify its “bundling” commercials to expressly advise consumers that its homeowners insurance is issued, underwritten and serviced by a third-party insurance company.

Progressive, in its advertiser’s statement, said that while it did not agree with certain of NAD’s findings, “we respect the self-regulatory process and will consider NAD’s recommendations in future advertising.”