NEXT Will Integrate into ERGO Group, Munich Re’s Primary Insurance Division
In a major move marking its entrance into the U.S. insurance marketplace, Munich Re has announced the full acquisition of NEXT Insurance, a U.S.-based technology-driven insurer focused on small business coverage. The acquisition, valued at $2.6 billion for 100 percent of NEXT Insurance’s shares, marks ERGO’s fist foray into the world’s largest insurance market. The transaction, which is subject to customary conditions including regulatory approvals, is expected to close in the third quarter of 2025.
“This transaction marks the start of a new chapter for ERGO. Together with NEXT Insurance, we will tap into a highly attractive market overseas, unlocking significant growth opportunities while further diversifying our existing business portfolio. At the same time, we will work with NEXT Insurance to leverage their cutting-edge technology and our technical excellence, contributing to our commitment to sustainable, profitable growth,” said Markus Rieß, Chief Executive Officer of ERGO Group.
Founded in 2016 and headquartered in Palo Alto, California, NEXT has transformed the U.S. small business insurance market by offering a fully digital underwriting platform and a proprietary technology stack. The company reported $548 million in gross written premiums in 2024 and serves over 600,000 customers with a range of coverages, including General Liability and Workers’ Compensation.
Guy Goldstein, CEO of NEXT Insurance, expressed enthusiasm about the acquisition, stating, “Today marks a significant moment for NEXT Insurance, our customers, agents, and partners alike. Over the past few years, we have transformed the U.S. small business insurance market by delivering a simple, seamless, tailored experience for business owners. This transaction will propel us forward, allowing us to scale our technology-driven approach and empower even more small business owners with innovative insurance solutions. With the strength and expertise of ERGO and Munich Re and their well-recognized re/insurance know-how, we are poised to lead the charge in reimagining small business insurance in the USA.”
ERGO, a major shareholder of NEXT Insurance since 2017 with a 29 percent stake, has been closely monitoring the company’s development. The acquisition aligns with ERGO’s strategy to tap into the highly fragmented U.S. small and medium-sized business (SMB) insurance market, which is estimated to represent a $175 billion addressable market with significant growth potential.
With this acquisition, ERGO aims to support NEXT Insurance’s continued growth by leveraging its technical and insurance expertise to deliver sustainable and profitable results in the medium term.
More than 30 million small businesses operate in the U.S., comprising 99 percent of all companies and 44 percent of the nation’s Gross Domestic Product (GDP). However, approximately 75 percent of small businesses are considered underinsured, highlighting the opportunity for expansion through enhanced digital solutions and streamlined coverage options.
Financial and legal advisors to NEXT Insurance in the transaction include Ardea Partners LP, Latham & Watkins LLP, Goldman Sachs & Co. LLC, and J.P. Morgan Securities LLC. ERGO and Munich Re were advised by Kirkland & Ellis LLP, Barnea Jaffa Lande & Co., Bain & Company, Inc., and Morgan Stanley & Co. LLC.
