ERGO acquires Next Insurance for $2.6 billion

German insurance company ERGO has acquired Next Insurance for $2.6 billion. This deal aims to deepen ERGO's presence in the U.S. market, specifically targeting small businesses. There are about 30 million small businesses in the U.S., but many are underinsured, leaving growth opportunities. Next Insurance, founded in 2016 and based in Palo Alto, California, specializes in property and casualty insurance for small businesses. Its services include general liability and workers compensation insurance. The company experienced significant growth, generating $548 million in revenue in 2024. Next's CEO, Guy Goldstein, expressed optimism about the merger. He believes it will help the company expand its technology-driven services and provide innovative solutions for small business owners. In related news, the insurance industry is undergoing a digital transformation. Many companies are moving away from outdated systems and trying to improve payments and customer experiences. Some payments processes remain inefficient and heavily rely on paper. This reliance is still prevalent in both premium payments and disbursements, creating challenges for both insurers and customers.