Australian artificial intelligence company Veriluma (ASX: VRI) has entered into a strategic agreement to acquire 100% of local healthcare services and software provider Prometheus Information Pty Ltd.
The $675,000 acquisition will comprise an upfront cash payment and shares consideration plus a performance cash payment and is targeted for completion by month end.
Veriluma will use the acquisition to make its foray into Australia’s healthcare sector, as Prometheus’ client base includes 17 of the country’s 37 registered health insurance funds including sector technology provider Hospital and Medical Benefits System (HAMBS).
Canberra-based Prometheus provides business intelligence, data warehousing, analytical solution and professional services with significant expertise in the identification of fraud, waste and claim abuse by providers and members.
It also has a portfolio of intellectual property products and tools, which can be used to serve government and corporate clients.
Veriluma chief executive officer Elizabeth Whitelock said the acquisition represents an opportunity to use Veriluma’s AI software to solve problems within complex environments in the insurance industry.
“Prometheus’ software and professional services mirror [our] ideals of predictive analysis to mitigate commercial risks including risks associated with fraud,” she said.
Research by Deloitte shows insurer spending on cognitive and artificial intelligence solutions is expected to reach $1.4 billion globally by 2021.
Ms Whitelock said the combination of Veriluma’s AI with Prometheus’ analytical platform will create “compelling benefits and insights” for health insurers, clients and prospects facing similar challenges in other industries.
Through the acquisition, Prometheus will become a complementary partner to Veriluma, with both teams using technology to deliver better solutions to Veriluma’s clients and partners.
“The insurance industry is transforming at a fast pace [and] competitive advantage is no longer determined by the products an insurer offers – it comes from providing customers a personalised and outstanding experience at a fair price particularly after a claim has been made,” Ms Whitelock said.
“To ensure top line growth and bottom-line profitability, insurers will turn to technology to do more with less, drive their differentiation and deliver increased customer satisfaction,” she added.
The Prometheus acquisition will add 21 clients and $670,000 revenue to Veriluma’s books.
It will also present the potential to extend fraud detection into other industry sectors and geographically, into Veriluma’s UK and US markets.