KEMPER INSURANCE SELECTS HNC'S NEW VeriComp Subro

The Kemper Insurance Companies has become the first company to license HNC Insurance Solutions' new VeriComp Subro software system. Using predictive technology originally developed by its parent company, HNC Software, VeriComp Subro automatically identifies and notifies carriers of claims with a high potential for subrogration - claims that should actually be paid by another party(1).

"We selected VeriComp Subro to increase our savings through the improved identification of subrogation opportunities," said George Neale, vice president, Kemper Client Services Group. "It integrates with other software applications and can be implemented quickly."

VeriComp Subro uses HNC's proven predictive modeling techniques to analyze an insurance company's claims database. It then identifies and automatically refers claims that have the potential to be subrogated to an insurance company's claims analysts for further review.

"Property and casualty carriers are under tremendous pressure to reduce costs. Reducing their losses through improved identification of claims that should be paid by a third party can save insurance carriers millions of dollars each year," said Sean Downs, president, HNC Insurance Solutions.

With the addition of VeriComp Subro to HNC's family of predictive software solutions, HNC now offers a more comprehensive suite of products to help insurance companies save money through improved fraud detection, more efficient loss reserving, better selection of cases for case management and identification of more subrogation opportunities.

"The insurance industry is at the cusp of a transformation that will occur through new technology and the Internet," said James Bisker, senior research analyst, The Tower Group. "Products like VeriComp Subro are the next generation in the application of artificial intelligence in the insurance space. Through the use of artificial intelligence for improved decisionmaking, companies like HNC Software are raising the bar for the entire industry."

VeriComp Subro is the second HNC Insurance Solutions product to be licensed by Kemper. In March of this year, the carrier installed MIRA, a product that assists insurers in establishing reserves for workers' compensation claims. MIRA has a proven track record as a statistical tool that can improve both the accuracy and timely establishment of ultimate reserves on an individual case basis.

For more information, contact HNC Insurance Solutions by telephone at 949- 655-3300, by e-mail at info@hncis.com or visit its Web site at www.hncis.com.

About Kemper Insurance

The Kemper Insurance Companies, with 1999 revenues of $3.0 billion, is a leading provider of property-casualty insurance and risk management services. It operates countrywide and in many foreign markets. For more information about Kemper Insurance, visit its Web site at www.kemperinsurance.com.

About HNC Insurance Solutions

HNC Insurance Solutions, a division of HNC Software Inc, is a leading provider of predictive solutions to the insurance industry. These solutions use proprietary software technologies to analyze highly complex data and improve insurance claim and policy decision-making, resulting in enhanced productivity, decreased claims costs and reduced fraud for insurers, TPAs, employers and managed care companies. Many of the leading workers' compensation carriers use at least one product or service of HNC Insurance Solutions.

About HNC Software Inc

Headquartered in San Diego, California, HNC Software Inc is a leading provider of complete predictive software solutions for the services industry, including financial, telecommunications, insurance and Internet commerce. HNC's suite of predictive software solutions can provide real-time insight into customer relationships based on transaction-level data, helping companies manage their relationships with individual customers. By accurately predicting customer behaviors, these companies can create initiatives to mitigate risk and attrition; improve customer service; develop marketing programs to enhance profitability, and detect fraudulent customer transactions.

For more information, visit HNC's Web site at www.hnc.com or contact Melinda Bateman, HNC Software Inc, 5935 Cornerstone Court West, San Diego, CA 92121, (858) 799-3880. For the investor relations hotline, call (800) 396- 8052.

(1) For example, assume that an employee of a trucking company was involved in a truck accident and makes an insurance claim. VeriComp Subro may identify that the claim could have involved a truck with faulty brakes, which could be the cause of the accident. If that was in fact the case, then the insurance carrier could subrogate the claim with the manufacturer of the brakes on the truck, thus saving - on the average - 1 percent of the total cost of the claim.

Contact Fi.Comm, Heidi Flannery, 503-844-8888 x111, heidi.flannery@ficomm.com or HNC Software, Melinda Bateman, 858-799-3880, mb@hnc.com.