Munich Re to Acquire NEXT Insurance in $2.6 Billion Deal

Frankfurt (Reuters) – Munich Re has signed a definitive agreement to acquire NEXT Insurance for $2.6 billion, making it part of ERGO, Munich Re’s primary insurance arm. The acquisition marks a significant expansion into the US small and medium-sized business (SMB) insurance market.

NEXT Insurance, headquartered in Palo Alto, California, was founded in 2016 and focuses on providing digital-first Property & Casualty insurance to US small businesses. The company serves over 600,000 customers and generated $548 million in revenue in 2024. ERGO currently holds a 29% stake in the company.

The US small business sector includes over 30 million businesses, contributing 44% to the GDP. Despite their economic significance, 75% of these businesses are underinsured. The small business insurance market, valued at $175 billion, presents substantial growth opportunities.

The acquisition will enable Munich Re and ERGO to leverage NEXT Insurance’s advanced technology and digital underwriting platform to address this market gap. The deal is expected to close in the third quarter of 2025, pending regulatory approvals.