Insurance Companies Seek to Redefine “Fairness”

Most consumers are unaware that their insurance premiums are being used, in part, to fund technologies like Colossus and ISO Claims Outcome Advisor. These technologies spit out a number to describe the "worth" of a person’s insurance claim, based on an adjustor’s description of the accident and injuries, and based on historical payments for similar claims.

Colossus claims that it can “minimize payout variance on similar bodily injury claims.” ISO states that “linking likely treatments to injuries helps . . . identify unnecessary treatments.” In other words, these technologies encourage insurance companies to deny compensation for valid injuries whenever those injuries do not fit a specified mold. Insurance companies sometimes treat these automated numbers as more important than the opinions of physicians and other persons with relevant expertise.

Colossus tries to explain that its goal is to “increase fairness to all customers.” To many of us, fairness means “if you break it, you fix it” and “if you promise to pay, you pay.” But to Colossus, fairness apparently means something like: “if you break it, you consult your electronic database, which will spit out a number that may or may not fix it.”

Here at Walkup, we know that injured people have to face their individual realities: future surgeries, disability, decades of pain and frustration. Insurance companies, who have been happily accepting payments over the years, should look at the same realities. Their “one size fits all” fiction does not generate fair results.

In recent years, these problems have deepened. Thirteen of the top twenty U.S. Property and Casualty insurers use Colossus. But ISO’s growth has been even more staggering. In early 2009, ISO reported that its database had accumulated more than 600 million industry claims, with more than 200,000 new claim reports every day. As of January 2007, 95% of the insurance industry used ISO for day-to-day claims handling. ISO connected its Claims Outcome Advisor ™ product to its ISO ClaimSearch® product, which has extensive private data from law enforcement agencies and insurance companies - accumulated over the years for the ostensible purpose of fighting fraud.

A prince never lacks legitimate reasons to break his promise - Machiavelli