NEXT Insurance is entering a strategic partnership with Allstate to develop products including commercial auto policies and extending its existing reinsurance relationship with Allianz.
For Next, which serves over a half million customers and is nearing $1 billion in premium revenue, it's the largest equity round in its history, eclipsing a previous round of $250 million. The deal is also the largest in the insuretech space this year, according to PitchBook. According to a July 2022 report from investment banking and brokerage firm William Blair, a"new guard" in property and casualty insurance could reach upward of 50% of total insurance value by 2032, representing $350 billion that is"up for grabs" over the next decade.E-commerce sales as a percentage of total sales in the commercial market are growing, according to William Blair's data, at a compound annual rate of roughly 10%, and even higher during the Covid lockdowns.
Next, which says it is the largest provider of"embedded" digital commercial insurance products in the U.S., sells through partnerships with Intuit, benefits provider Gusto, captive insurance agents of larger providers and independent insurance agencies. "Whether a pickup truck or fleet of cars for pizza delivery, today in the U.S. you can't go online and buy it like a personal line of auto," Goldstein said.Strategic investors are playing a more prominent role in the insuretech funding market after the startup crash of 2022 and the retreat by many venture capitalists with unprofitable fintechs bleeding cash and those that had gone public seeing sharp declines in value.
But exits have been minimal through the public markets as investors still feel the burn of the IPOs and SPACs from the insurance sector.