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Australia: Insurers feel the pressure of social media

Source: Asia Insurance Review | Jan 2018

Australia

The use of social media to “pressure” insurers into paying out claims is costing companies millions and driving up premiums, according to the Insurance Council of Australia (ICA).
 
   Dissatisfied customers taking their gripes of rejected claims to Twitter and Facebook can cause a number of problems, including reputational harm for insurers, reported ABC Online citing ICA spokesman Campbell Fuller.
 
   “It can have an impact on the cost of acquiring a new customer, or moving a customer from one insurer to another,” he said. “And because those costs are embedded in the business, they can affect the premium that customers are paying. So it does have some impact.”
 
   Mr Fuller said customer pressure over a claim can sometimes lead to payouts where they are not due.
 
   “And insurance company may feel under pressure to pay a claim even if that claim is not fair. Even if that claim is actually not legitimate or only partially legitimate.
 
   “Simply because when there are issues and disputes, the costs of not paying the claim can actually be higher than the cost of paying it.”
 
   But some social media experts are sceptical of these assertions, saying insurance companies should be using social media to listen to their customers.
 
   Dr Mark Pesche, a digital culture expert at the University of Sydney, said online accountability had actually improved customer service across many businesses. A 
 
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