What is Colossus?
Colossus is a computer program that some of the largest insurance companies are using to estimate personal injury claims from auto accidents. Though these insurance companies claim that the use the program only as an initial evaluation tool, Colossus is being used to low-ball the injured party’s claims.
Colossus’s estimation is based on numerous factors that negatively affect a claim and lower the value of the case. Since it was originally created to evaluate soft tissue injuries (non-broken bones), it does not have the ability to value serious, even fatal injuries. Colossus simply looks to medical records, provided by an insurance adjuster, to assign a value to an auto accident victim’s bodily injury. It awards higher values for injuries like broken bones and gives greater value to victims who went to the hospital immediately after the accident. As such, Colossus allows Allstate, Aetna, USAA, and any auto insurance company that uses it, to artificially drive down injury values. Allstate’s adjusters controlled the information fed into the Colossus program and in turn, they reduce the benchmark or baseline values by only inputting the lowest settlement amounts. There is a range of possible values, from low to high, that must be considered when estimating the size of the claim.
Allstate first started using Colossus in the 1990’s in an effort to decrease the size of auto claim payouts. In fact, according to the Consumer Federation of America (CFA), the sales literature published by Colossus’s manufacturer “touted Colossus as ‘the most powerful cost savings tool’ and also suggested that, ‘the program will immediately reduce the size of bodily injury claims by up to 20 percent.’” Colossus is at the heart of Allstate’s Claims Core Process Review (CCPR), a program introduced by McKinsey Consulting in 1996 in an attempt to cut claims-department expenses. Rather than paying the victim what he deserves, insurance companies are maintaining profit margins by purposefully lowering budget, cutting staff, and controlling claims severities. This is all in an effort to raise the multi-billion dollar companies’ bottom lines.
It’s a Formula
Colossus does not consider the true extent of a victim’s pain and suffering – it’s only a formula. While judges and juries tend to listen to the victim’s story, truly understanding the impact of the injury, the insurance adjuster who uses Colossus simply types in the accident scenario (using a few keywords which must be in Colossus recognizable language) and sees what the average settlement is for the sustained injury in the area. What’s more is that the accident and settlement information used in Colossus is the private property of the insurance companies using the software. Therefore, there is no way to make sure that the accident descriptions are being entered impartially. At any point, insurance adjusters can manipulate the information input in the program. They have all the power to determine whether the victim gets awarded enough money to pay the medical bills or whether they will end up incurring thousands of dollars in debt. Additionally, Colossus does not consider key details like brain damage, injury complications or the future injuries caused by the accident.
Consumer Alert
On December 9, 2010, the CFA released a “Consumer Alert,” warning Americans who have been injured in auto accidents about Colossus. The CFA offered these 4 tips:
- Find out if a computer program was used to evaluate your claim
- Demand to see the range of results the computer generated
- Do not accept any offer less than the “high” end of the range and consider making a counter offer that is about the high offer
- If the insurer does not agree to settle at the high end of the range, consider filing a complain with your state insurance commissioner and seeking legal help with your claim
(Source: http://www.consumerfed.org/pdfs/Claims_Consumer_Alert_12-8.pdf)
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