The founders of Charlotte-based Precedent have identified a five-year trend revealing that claim severity for injuries has soared four times faster than inflation.
That's largely a result of increased errors and inefficiencies made in the claims-handling process from utilizing outdated systems, Precedent says. Harnessing manual methods can lead to delays, inaccuracies and escalated cost for claims.
To reduce severity, or the monetary loss of an insurance claim, Grant Little and Jim Andrews launched Precedent in late 2022 to streamline communication between attorneys and insurance carriers. The startup leverages artificial intelligence to provide carriers with the tools needed to manage their attorney-represented injury claims.
With $9 million in fresh capital announced yesterday, Precedent plans to offer its portfolio of products to more insurers as well as scale new product development. As part of the fundraise, Barry Karfunkel, founder of investment firm AdirVentures, will join Precedent's board of directors as chairman. AdirVentures led the funding round.
Karfunkel said Precedent's mission comes at an opportune time as more people in the industry look to simplify the claims-handling process and diminish the severity of liability claims.
"We believe the compelling (return on investment) for Precedent's customers will drive broader market adoption of Precedent's technology, leading to more accurate outcomes, lower costs and new efficiency gains for insurers," he said.
Little, who is CEO at Precedent, added that digital advancements between insurance carriers and providers has "revolutionized claims efficiency and customer service." For example, customers can use their phones to report a claim or receive an estimate.
However, he said, some plaintiff attorneys and insurance carriers still utilize antiquated resources such as mail, fax and email to relay time-critical information.
"This seed equity round from Adir allows us to define this new category and assist the industry in efficiently resolving claims with plaintiff attorneys," Little said. "Adir's financial support, domain expertise and relationships will be extremely beneficial to us as we continue to grow."
