NEXT Will Combine into ERGO Group, Munich Re’s Main Insurance coverage Division
In a significant transfer marking its entrance into the U.S. insurance coverage market, Munich Re has introduced the complete acquisition of NEXT Insurance, a U.S.-based technology-driven insurer centered on small enterprise protection. The acquisition, valued at $2.6 billion for one hundred pc of NEXT Insurance coverage’s shares, marks ERGO’s fist foray into the world’s largest insurance coverage market. The transaction, which is topic to customary situations together with regulatory approvals, is predicted to shut within the third quarter of 2025.
“This transaction marks the beginning of a brand new chapter for ERGO. Along with NEXT Insurance coverage, we’ll faucet right into a extremely enticing market abroad, unlocking important progress alternatives whereas additional diversifying our present enterprise portfolio. On the similar time, we’ll work with NEXT Insurance coverage to leverage their cutting-edge know-how and our technical excellence, contributing to our dedication to sustainable, worthwhile progress,” mentioned Markus Rieß, Chief Govt Officer of ERGO Group.
Based in 2016 and headquartered in Palo Alto, California, NEXT has remodeled the U.S. small business insurance market by providing a completely digital underwriting platform and a proprietary know-how stack. The corporate reported $548 million in gross written premiums in 2024 and serves over 600,000 clients with a variety of coverages, together with Normal Legal responsibility and Staff’ Compensation.
Man Goldstein, CEO of NEXT Insurance coverage, expressed enthusiasm in regards to the acquisition, stating, “Right this moment marks a major second for NEXT Insurance coverage, our clients, brokers, and companions alike. Over the previous few years, now we have remodeled the U.S. small enterprise insurance coverage market by delivering a easy, seamless, tailor-made expertise for enterprise homeowners. This transaction will propel us ahead, permitting us to scale our technology-driven strategy and empower much more small enterprise homeowners with modern insurance coverage options. With the energy and experience of ERGO and Munich Re and their well-recognized re/insurance coverage know-how, we’re poised to guide the cost in reimagining small enterprise insurance coverage within the USA.”
ERGO, a significant shareholder of NEXT Insurance coverage since 2017 with a 29 p.c stake, has been intently monitoring the corporate’s growth. The acquisition aligns with ERGO’s technique to faucet into the extremely fragmented U.S. small and medium-sized enterprise (SMB) insurance coverage market, which is estimated to symbolize a $175 billion addressable market with important progress potential.
With this acquisition, ERGO goals to assist NEXT Insurance coverage’s continued progress by leveraging its technical and insurance coverage experience to ship sustainable and worthwhile ends in the medium time period.
Greater than 30 million small companies function within the U.S., comprising 99 p.c of all firms and 44 p.c of the nation’s Gross Home Product (GDP). Nevertheless, roughly 75 p.c of small companies are thought-about underinsured, highlighting the chance for enlargement by enhanced digital options and streamlined protection choices.
Monetary and authorized advisors to NEXT Insurance coverage within the transaction embrace Ardea Companions LP, Latham & Watkins LLP, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC. ERGO and Munich Re have been suggested by Kirkland & Ellis LLP, Barnea Jaffa Lande & Co., Bain & Firm, Inc., and Morgan Stanley & Co. LLC.
