Ergo (Munich Re’s primary insurance subsidiary) acquired the outstanding share capital of NEXT Insurance for $2.6 bn, effectively purchasing the remaining ~71% of shares it did not already own. Ergo already held 29% of NEXT before the deal, making it a controlling majority owner after the acquisition.
NEXT, founded in 2016 and based in Palo Alto, California, offers digital insurance products including general liability and workers’ compensation.
Ergo described the U.S. small- and medium-size business (SMB) insurance segment as appealing and highlighted this acquisition as a way to establish a meaningful presence in the U.S. market, which is one of the largest and fastest-growing for commercial insurance.
- The SMB segment in the U.S. is characterized by large numbers of businesses needing relatively straightforward coverage (e.g., general liability, workers’ compensation), which lends itself to automation and digital distribution — both of which are NEXT’s strengths.
- This deal gives Ergo a ready-made platform with proven technology, customer base, and distribution channels in a segment where Ergo and Munich Re previously had minimal direct presence.
Ergo stated that NEXT’s technology stack and its automated digital underwriting and pricing platform complement Ergo’s capabilities. NEXT is now integrated into Ergo’s management structure.
Markus Riess, Chief Executive Officer of Ergo Group AG, said the deal marks a key milestone by securing a presence in the U.S.
We will seize the considerable growth potential offered by this attractive market as we expand our existing business portfolio
Markus Riess, CEO of Ergo
He noted that Ergo intends to capture the considerable growth opportunities in this market as it broadens its business portfolio.
NEXT’s profile:
- Founded in 2016, NEXT Insurance is an insurtech company headquartered in Palo Alto, California.
- It focuses on digital insurance products, offered through its proprietary technology stack, serving more than 600,000 customers as of 2024.
- It generated $548 mn in gross written premium (GWP) in 2024, showing strong growth since inception.
- Its platform automates underwriting, pricing, and distribution, allowing lower costs and faster service compared to traditional carriers.
NEXT has now been fully embedded into Ergo’s management structure. That suggests it is no longer operated as a fully independent startup but as a strategic business unit within Ergo, with its leadership likely reporting into Ergo’s hierarchy.
The deal represents one of the largest full takeovers of a U.S. insurtech by a traditional European insurer. It demonstrates how established insurers are willing to invest significantly to acquire technology-driven distribution and operating models, rather than building them in-house over time.
