For the last several years, personal injury attorneys (and many insurance company adjusters) have been lamenting about the insurance industry’s use of a computer program, Colossus, to value claims.  Colossus, used by most insurance companies, requires the adjuster to enter information about the claim and then spits out a maximum settlement value.  The insurance companies have given adjusters little, if any, discretion to settle cases for more than the Colossus value.  Insurance companies have tried to keep the operation of Colossus a secret, even going so far as to suing former employees who were attempting to educate attorneys on the operation of Colossus.   Using the little we do know, we have adjusted the way our claims are submitted to try and maximize the value that Colossus provides for our clients’ cases. But on a whole, Colossus still undervalues cases by approximately twenty percent.

Recent bad faith cases against insurance companies have resulted in more disclosure about the program.  Criticism of Colossus has spread from just the legal community to the popular press, including recent articles in Business Week and other papers.  With any luck, the increased publicity will help pressure the insurance companies into making changes to Colossus.