JavaScript Claim handling software being marketed to insurers iscreating a system where underwriters profit by unfairly reducingcustomers' claims payments, a consumer insurance expert says.
J. Robert Hunter, Consumer Federation of America director ofinsurance, speaking at the CFA's financial services conferencehere, said that such software is often marketed to insurers ascapable of providing immediate cost savings. In fact, he added,they "are designed to systematically underpay" the claimant.
As evidence to the problem, Mr. Hunter noted that the amount ofmoney being paid by insurers relative to claims has decreasedsignificantly. In 1987, he said, insurers paid roughly 75 cents foreach premium dollar they collected. Today, he said that number hasdecreased to 65 cents and appears to be headed furtherdownward.
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