Praedicat said it has completed a $6 million, early stage financing. The Los Angeles-based casualty catastrophe modeling company plans to use the money to accelerate development of products that prepare insurers and other companies for emerging or latent commercial risks.
Frank McMahon, an investor and partner at American Discovery Capital, led the financing, and he’ll join the Praedicat board. Previous investors RMS, the catastrophe modeler, and Jacques Dubois also participated in the new funding round.
The money will be used to fund development of Praedicat’s latency catastrophe models for a broader set of emerging risks and business activities. Robert Reville, Praedicat’s CEO, explained in prepared remarks that the company’s models “facilitate growth for our customers by allowing for broader, tailored coverage of emerging risk and for innovation in new insurance products for latent risks.
McMahon pointed out that Praedicat’s modeling data on emerging risk could apply to other industries beyond insurance.
“We see the insurance industry as the foundation of Praedicat’s business, but its risk models are relevant to chemicals, pharmaceuticals, personal care products and more,” McMahon said in prepared remarks. “This financing round will support that expansion as well.”
Dubois, an investor in Praedicat since its 2012 founding, has been appointed chairman of the company’s board of directors. He’s a veteran insurance industry executive and retired at the end of 2016 from Swiss Re Group, where he had served as a member of its executive board and as chairman and CEO of Swiss Re America Holding Corp., which manages the reinsurer’s operations in North America.
Dubois said that Praedicat’s new financing will help bring it into a new phase.
“Our quantitative models will be used to inform insurance and reinsurance transactions,” Dubois said. “Not only can Praedicat’s data analytics help insurers grow their casualty business, they will assist insurers in demonstrating to ratings agencies and regulators that they have a thorough understanding of their casualty aggregations. Further, other industries will begin to rely on Praedicat’s insights as well.”
Hemant Shah, the RMS CEO and a member of the Praedicat board, added in prepared remarks that “the long tail of casualty insurance is the next frontier of catastrophe modeling, and Praedicat is at the forefront of that frontier.”