Washington L&I Selects Fair Isaac's VeriComp Fraud Manager for Detection of High-Risk Workers' Compensation Claims

VeriComp Fraud Manager scores claims on the likelihood of fraudand abuse. The software helps organizations fast-track normal claimswhile identifying claims that are out of profile compared to theirpeers. This rank-ordering helps adjusters focus their attention onsuspicious claims with minimum effort, lowering costs and enhancingefficiency.

"Early discovery of workers' compensation fraud and abuse,combined with the ability to identify claims in need of additionalcase management, is very important to us," said Bob Malooly, assistantdirector of insurance services for the Washington Department of Laborand Industries. "VeriComp Fraud Manager will help us do this, whilehelping to keep the cost of workers' compensation claims as low aspossible. We're excited to work with Fair Isaac and put their advancedtechnology to use to help improve the workers' compensation system inWashington state."

As one of the nation's 10 largest workers' compensation insurers,the Department of Labor and Industries provides workers' compensationinsurance coverage to about 70 percent of Washington's workers.

In addition to rapidly identifying fraudulent and abusive claims,VeriComp Fraud Manager can discover cases with high cost or longduration potential, enabling adjusters to apply more aggressive casemanagement and medical intervention earlier in the life of the claim.Using Fair Isaac's advanced predictive analytics, VeriComp FraudManager can recognize subtle patterns of abuse that even the mostexperienced adjuster might miss.

The VeriComp Fraud Manager solution delivered to L&I utilizes theFair Isaac Industry Alliance consortium model. The Fair Isaac IndustryAlliance is the first offering of its kind for the workers'compensation industry, using the predictive power of data pooled fromnumerous contributors to provide a more complete approach to detectingfraud and abuse.

"Quickly identifying the right action to take on workers'compensation claims is critical for the Washington State Department ofLabor and Industries," said James Kalustian, vice president,Healthcare and Pharmaceuticals at Fair Isaac. "VeriComp Fraud Managercan help L&I improve claims management by detecting workers'compensation fraud and abuse earlier, by discovering new fraudincrementally, and by offering L&I a sophisticated way of identifyinginjured workers who need more aggressive case management.Increasingly, Fair Isaac analytics are improving productivity and costsavings for insurers across the country."

Nationally, it is estimated that fraud and abuse account for atleast 10 percent of the cost of workers' compensation premiums. Thevast majority of workers' compensation fraud goes undetected, and iffraud is caught at all, it is usually late in the life of the claim.According to the National Insurance Crime Bureau (NICB), workers'compensation fraud costs Americans over $5 billion nationally.

VeriComp Fraud Manager is already helping the WashingtonDepartment of Labor and Industries further improve its tradition ofeffective fraud detection. Early tests indicate that VeriComp FraudManager identifies well over half of the fraudulent claims monthsbefore they are discovered by adjusters, and discovers suspiciousclaims that would otherwise have been missed. On average, Fair Isaaccustomers have typically saved several hundred dollars per claim,based on improved detection of fraud and abuse. Additionally, thebenefit from improved claims management yields significant value.

Fair Isaac software products and services process more than $4.4billion annually in property and casualty claims. They are in use inthe operations of nine of the top 10 property/casualty carriers andover 50 percent of the nation's state workers' compensation funds. In2004, Fair Isaac saved its customers more than $3.3 billion in claimscosts.

About Fair Isaac

Fair Isaac Corporation (NYSE:FIC) is the preeminent provider ofcreative analytics that unlock value for people, businesses andindustries. The company's predictive modeling, decision analysis,intelligence management, decision management systems and consultingservices power billions of mission-critical customer decisions a year.Founded in 1956, Fair Isaac helps thousands of companies in over 60countries acquire customers more efficiently, increase customer value,reduce fraud and credit losses, lower operating expenses and enter newmarkets more profitably. Most leading banks and credit card issuersrely on Fair Isaac solutions, as do insurers, retailers,telecommunications providers, healthcare organizations and governmentagencies. Through the www.myFICO.com web site, consumers use thecompany's FICO(R) scores, the standard measure of credit risk, tomanage their financial health. For more information, visitwww.fairisaac.com.

About the Washington State Department of Labor and Industries

L&I is a diverse state agency primarily focused on protecting thesafety and welfare of Washington's nearly three million workers. L&Ifosters on-the-job safety and health through its (WISHA) inspectionand enforcement program and through voluntary consultations andtraining. L&I also administers the state's mandatory workers'compensation system, which provides medical, wage-replacement, pensionand retraining benefits to those who are hurt or become ill as aresult of their work. The system also protects employers from the highcost of long-term injury claims, and from liability lawsuits thatcould otherwise result from workplace injuries. L&I licensescontractors, inspects electrical work and elevators and protectsworkers from illegal employment practices. It also helps develop thestate's skilled workforce through apprenticeship programs.

Fair Isaac Statement Concerning Forward-Looking Information

Except for historical information contained herein, the statementscontained in this press release that relate to Fair Isaac, includingstatements regarding its VeriComp Fraud Manager product offering andthe benefits to be derived from this offering, are forward-lookingstatements within the meaning of the "safe harbor" provisions of thePrivate Securities Litigation Reform Act of 1995. Theseforward-looking statements are subject to risks and uncertainties thatmay cause actual results to differ materially, including anyunforeseen technical difficulties related to the implementation, useand functionality of the offering, the risks that customers will notperceive material benefits from the offering, failure of the productto deliver the expected results, the possibility of errors or defectsin the offering, regulatory changes applicable to the use of consumercredit and other data, and other risks described from time to time inFair Isaac's SEC reports, including its Annual Report on Form 10-K forthe year ended September 30, 2004, and quarterly report on Form 10-Qfor the period ended June 30, 2005. Forward-looking statements shouldbe considered with caution. If any of these risks or uncertaintiesmaterializes or any of these assumptions proves incorrect, FairIsaac's results could differ materially from Fair Isaac's expectationsin these statements. Fair Isaac disclaims any intent or obligation toupdate these forward-looking statements.

Fair Isaac, VeriComp and FICO are trademarks or registeredtrademarks of Fair Isaac Corporation, in the United States and/or inother countries. Other product and company names herein may betrademarks of their respective owners.