Placing the value on bodily injury claims is inherently speculative.

To remove some of the guess work from ascertaining a proper value for general damages, some insurance companies utilize a comprehensive software program called Colossus. The Colossus software attempts to recreate, electronically, the “round-tabling” that often occurs with specific claims. One court has described the “round-tabling” process as a process in which the insurer’s most skilled and experienced casualty claims professionals come together to evaluate hypothetical injury claims by examining settlements in similar claims, jury verdicts, and the like. See In re Farmers Ins. Exchange Claims Representatives’ Overtime Pay Litigation, 336 F.Supp.2d 1077, 1102 (D. Or. 2004).

When an insurer decides to use the claim valuing software, it is customized according to the insurer’s settlement philosophies and claims practice history. This process may involve bringing together a super round-table to come up with predicted values for hypothetical case scenarios, which are then incorporated into the software matrix. When this is done, the Colossus software allows for electronic “round-tabling” at each adjuster’s desk for each submitted claim without having to wait for a claim committee meeting. In that fashion, use of the Colossus software helps insurers to evaluate claims consistently and to smooth out variations in claim payouts.

Because some settlement amount ranges of value recommended by Colossus may be different than what a specific adjuster would offer on a specific claim, there has been a plethora of litigation over the utilization of the software where plaintiffs assert bad faith claims against the insurance company based on their use of it.

Related Posts