Germany’s Munich Re has reached a definitive agreement to acquire 100% of NEXT Insurance shares, valuing the business at $2.6bn.
Palo Alto, California-based NEXT Insurance will become part of ERGO, Munich Re’s primary insurance business.
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The transaction is due to close in the third quarter of 2025 (Q3 2025), contingent on regulatory approvals and other standard conditions.
Set up in 2016, NEXT Insurance is a tech-driven property and casualty insurer, specialising in catering to small business owners in the US.
With its technology stack and digital underwriting platform, NEXT Insurance provides digital insurance coverage options such as general liability and workers’ compensation.
In 2024, NEXT Insurance reported a top line of $548m. The business presently employs approximately 700 people and serves more than 600,000 customers.
ERGO and Munich Re have supported NEXT Insurance since 2017, with ERGO Group holding a 29% stake in the company.
ERGO anticipates the integration will contribute “mid-triple-digit” million dollar earnings to net results in the medium term.
Ardea Partners and Latham & Watkins were the lead financial advisor and legal advisor to NEXT Insurance, respectively.
Goldman Sachs and J.P. Morgan Securities also provided financial advice to NEXT Insurance.
ERGO and Munich Re secured advice from Kirkland & Ellis, Barnea Jaffa Lande & Co., Bain & Company and Morgan Stanley.
ERGO CEO Markus Rieß said: “This transaction marks the start of a new chapter for ERGO. Together with NEXT Insurance, we will tap into a highly attractive market overseas, unlocking significant growth opportunities while further diversifying our existing business portfolio. At the same time, we will work with NEXT Insurance to leverage their cutting-edge technology and our technical excellence, contributing to our commitment to sustainable, profitable growth.”
NEXT Insurance CEO Guy Goldstein stated: “Over the past few years, we have transformed the US small business insurance market by delivering a simple, seamless, tailored experience for business owners. This transaction will propel us forward, allowing us to scale our technology-driven approach and empower even more small business owners with innovative insurance solutions. With the strength and expertise of ERGO and Munich Re and their well-recognised reinsurance know-how, we are poised to lead the charge in reimagining small business insurance in the USA.”
Munich Re reported a net result of €5.7bn ($6.17bn) in 2024, up 23.4% from €4.5bn in 2023.
