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Insurance Technology Startup Next Insurance Bags $250M Hitting $1B Valuation

Insurance startup Next Insurance recently raised $250 Million in financing in its series C round of funding. The total amount was invested by European Reinsurance giant Munich Re. The Reinsurance group had in this round been the only participant in a move that saw it acquire around 27.5% in the single-niche insurance company. This now puts the Next Insurance’s valuation around the $1 Billion mark.

The startup, which is known for offering insurance to small and medium scale digital enterprises with offerings that cover their general business risk (general liabilities, professional liabilities, commercial automobile and workers remunerations), has so far been able to cover about 1,000 different kinds of enterprises with just about 70,000 customers and clientele.

In a press statement released today, Munich Re expressed its commitment to ensuring that the transaction helps Next fulfill its goal of reaching small and medium companies with its offerings. The Chairman of the Board of Management Joachim Wenning said:

“Next’s data- and technology-driven business model offers outstanding growth opportunities, which we will harness together. Next Insurance will benefit from our expertise in primary insurance and reinsurance. This investment emphasizes Munich Re’s commitment to be the leading provider of digital insurance solutions.

It also helps Munich Re expand its footprint in the promising insurance market for small and medium-sized commercial customers in the United States. We are confident that building on our proven collaboration will benefit both Munich Re and Next Insurance.”

This gives further insight into why the reinsurance giant considered being the only participant in the Series C round of funding. Having participated in the first two rounds with capital commitments of $29 Million and $83 Million in both 2017 and 2018 respectively. This also improves Munich Re’s footprint in the United States market as Next Insurance’s total customer base is within the United States only.

Up till recently, the insurance industry functioned on a traditional supply chain where everyone knew their roles and played accordingly. Investments such as these indicate a shift from the traditional roles as defined by more than a century of the insurance business with new models coming out in the open with different holdings by investment partners in many different areas. 

This particular model sees the digital business space which hitherto faced its unique challenges of getting adequate risk cover now have offerings up to reinsurance and other forms of securitization in various adequate ways.

It also has paved the way for all kinds of partnerships within the insurance sector and has blurred the lines between who does what, why and when where the business of covering risk is concerned. Although it sounds murky, it helps in redefining what the insurance business will be like in the coming decades. 

This also means that the age of the insurance broker may be coming to a close unless the business of insurance brokerage also undergoes massive innovations which in itself is highly likely.

It appears that Next isn’t the only insurance company reaching out to small-scale businesses. Lemonade is also in the loop and has so far raised $300 million earlier this year while auto-insurer Root Insurance raised $100 Million in 2018.

Insurance Technology Startup Next Insurance Bags $250M Hitting $1B Valuation

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