Munich Re to acquire NEXT Insurance in $2.6bn deal

By Gloria Methri

Munich Re has announced a definitive agreement to fully acquire NEXT Insurance, a US-based small business insurer, in a deal valued at $2.6 billion. The transaction, finalised on 19 March 2025, will see NEXT Insurance become part of ERGO, Munich Re’s primary insurance arm.

“This transaction marks the start of a new chapter for ERGO,” said Markus Rieß, CEO of ERGO Group. “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.”

NEXT Insurance CEO Guy Goldstein highlighted the acquisition’s strategic importance, saying, “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 is home to over 30 million small businesses across 1,000+ professions, accounting for 99% of all companies and 44% of the country’s GDP. However, small business insurance penetration remains relatively low, with 75% of businesses considered underinsured. With a total addressable market estimated at $175 billion, the sector presents a significant opportunity for expansion.

Founded in 2016 and headquartered in Palo Alto, California, NEXT Insurance is a technology-first property and casualty insurer catering to the specific needs of US small business owners. Through its proprietary digital underwriting and pricing platform, the company offers streamlined insurance solutions, including General Liability and Workers’ Compensation. In 2024, NEXT Insurance generated $548 million in revenue and now serves over 600,000 customers with a workforce of around 700 employees.

ERGO and Munich Re have supported NEXT Insurance since 2017, with ERGO currently holding a 29% stake in the company. As part of ERGO Group, NEXT Insurance is expected to contribute mid-triple-digit million-dollar earnings to ERGO’s net results in the medium term, with further significant earnings potential beyond this.

The acquisition agreement values NEXT Insurance at $2.6 billion for 100% of its shares. The deal remains subject to regulatory approvals and other customary closing conditions, with completion expected in the third quarter of 2025.