Munich Re to Acquire NEXT Insurance in $2.6 Billion Deal
Munich Re is set to acquire NEXT Insurance, a US-based insurer specializing in small businesses, in a deal valued at $2.6 billion. The agreement, finalized on March 19, 2025, will incorporate NEXT Insurance into ERGO, Munich Re’s primary insurance arm.
Markus Rieß, CEO of ERGO Group, said the acquisition marks a new era for the company. “Together with NEXT Insurance, we will tap into a highly attractive overseas market, unlocking significant growth opportunities while further diversifying our existing business portfolio. At the same time, we will leverage NEXT Insurance’s cutting-edge technology and our technical excellence to drive sustainable, profitable growth.”
Guy Goldstein, CEO of NEXT Insurance, highlighted the strategic importance of the deal. “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 propels us forward, allowing us to scale our technology-driven approach and empower even more small business owners with innovative insurance solutions. With the strength of ERGO and Munich Re’s expertise, we are poised to reimagine small business insurance in the USA.”
The US small business sector, encompassing over 30 million businesses across a thousand professions, is a huge market, representing 99% of all companies and contributing 44% of the nation’s GDP. However, the penetration of small business insurance is relatively low, with 75% of businesses considered to be underinsured. The total addressable market is estimated at $175 billion, indicating a significant opportunity for expansion.
NEXT Insurance, established in 2016 and headquartered in Palo Alto, California, provides technology-focused property and casualty insurance tailored to the needs of small business owners. Leveraging its proprietary digital underwriting and pricing platform, the company offers streamlined insurance solutions, including General Liability and Workers’ Compensation. In 2024, NEXT Insurance recorded $548 million in revenue and currently serves more than 600,000 customers with a workforce of approximately 700 employees.
ERGO and Munich Re have been supporting NEXT Insurance since 2017, with a current 29% stake held by ERGO. As part of the ERGO Group, NEXT Insurance is projected to contribute mid-triple-digit million-dollar earnings to ERGO’s net results in the medium term, with further substantial earnings potential anticipated.
The acquisition agreement values NEXT Insurance at $2.6 billion for 100% of its shares. The deal is subject to regulatory approvals and other standard closing conditions, with completion expected in the third quarter of 2025.
