ICA says social media hurts
The main insurance industry lobby says people are using social media to “pressure” insurers into paying out claims, costing them millions.
The Insurance Council of Australia (ICA) says dissatisfied customers are now able to complain about rejected claims on Twitter and Facebook, which is creating reputational harm for insurers.
“It can have an impact on the cost of acquiring a new customer, or moving a customer from one insurer to another,” ICA spokesperson Campbell Fuller says.
“And because those costs are embedded in the business, they can affect the premium that customers are paying. So it does have some impact.
“When a company is trying to sell a product to a customer, it falls down the Google rankings and therefore it's harder for a new customer to see that particular company.”
Mr Fuller says the complaints sometimes lead to insurers making payouts.
“Other factors involved are that we have customers complaining on social media or using social media to try and leverage an insurance company,” he said.
“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 actually paying the claim.”
But others believe that social media is just helping customers hold insurers more accountable, and that insurance companies should be using it to listen to their customers.