Kathmandu. European global reinsurance company, Munich Re, has announced the acquisition of Next Insurance. The company will now operate under its primary insurance arm, Ergo. Munich Re on Monday signed a deal to buy Next Insurance for $2.6 billion.
According to Asian Insurance Review, before the acquisition, Ergo owned about 30 percent of the digital insurance company. Munich Re was also one of the early backers of Next Insurance. The deal is expected to close in the third quarter of fiscal 2025, pending regulatory approvals.
Munich Re expects to generate $23.1 billion in general insurance revenue from its Ergo division in 2025. The recent acquisition of Next Insurance is expected to add a mid-three-digit million dollar revenue boost to Ergo’s overall results in the medium term.
According to both companies, small businesses (which contribute 44 percent of U.S. GDP) are significantly under-insured. 75 percent of small businesses are outside the insurance fold. If they were to be included, the potential market opportunity would be around $175 billion.
