Munich Re has agreed to acquire Next Insurance in a transaction that values the US-based digital insurer at US$2.6 billion, the company announced.
Next Insurance, headquartered in Palo Alto, Calif., will be integrated into Munich Re’s primary insurance arm, Ergo, following the expected close of the deal in the third quarter of 2025. The move represents Ergo’s first direct entry into the US primary insurance market.
Ergo is a prominent insurance company operating in over 20 countries, focusing on Europe and Asia. In Germany, Ergo is among the leading providers in life, property, and health insurance segments, employing approximately 38,700 people worldwide.
Ergo anticipates that Next Insurance acquisition will unlock substantial growth opportunities in the US market, contributing a mid-triple-digit million-dollar amount to its net results in the medium term.
The acquisition is also part of Munich Re’s broader effort to simplify its corporate structure and expand its presence in targeted growth areas.
Founded in 2016, Next Insurance provides property and casualty insurance tailored for small businesses. Munich Re first invested in the company in 2017 and later increased its ownership stake to 29%.
Other backers of Next Insurance include Alphabet Inc.’s growth equity fund CapitalG and the digital investment unit of Allianz SE.
The acquisition also follows another highlight year for the global reinsurer, with Munich Re reporting a net profit of €5.67 billion for the 2024 financial year, surpassing its original target of €5 billion.
This marks the fourth consecutive year that the company’s annual profit has exceeded expectations. The fourth-quarter net result totaled €979 million, compared to €1 billion in the same period of the previous year.
Meanwhile, Ergo reported a total premium income of €20.098 billion, reflecting a 6.4% increase from the previous year's €18.896 billion. This growth was driven by strong performances across various segments, including health and property-casualty insurance in Germany, as well as international markets.
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