Munich Re acquisition shows how insurtech can be applied to corporate insurance

The rise of insurtech clearly offers huge opportunities for improving the way risk is identified, analysed, managed, priced and ultimately transferred, but until now its application in the commercial and corporate insurance sector has been unclear. Corporate risk and insurance managers in Germany and across Europe are scratching their heads, asking how this technology and data can be used to deliver more innovative risk management and transfer solutions, while improving the overall process and administration? Application of this new technology seems obvious in the personal lines market, but for the commercial and large corporate space the benefits are not as easy to pin down. Munich Re’s decision to acquire 100% of tech company Relayr, which offers industrial players end-to-end solutions in the areas of the internet of things (IoT) and digitalisation, at a cost of $300m, perhaps provides part of the answer. Relayr is a rapidly-growing IoT company that provides enterprise middleware and IoT solutions to digitally transform industries. The company has about 200 employees based in offices across seven cities in the US, UK, Germany and Poland. Munich Re announced this week that it will acquire Relayr through its subsidiary, Hartford Steam Boiler (HSB). It said the joint business model will develop solutions for clients through technology to improve risk management, data analysis and financial instruments. “Munich Re is taking a further key step to create new business models in the industrial internet of things. The group will acquire the software company Relayr via its subsidiary, Hartford Steam Boiler, and will therefore play an active role in shaping business opportunities in this rapidly expanding sector,” stated the reinsurer. Munich Re said that from an initial consultation on the right technology through to overseeing implementation and supporting operations, Relayr offers industrial companies that seek to digitalise their business a “comprehensive range” of services. “By way of example, Relayr has developed a platform that can be used by companies to connect new and legacy hardware and software, to extract and analyse data from physical objects such as machines and equipment. This makes it possible to determine when a machine is likely to fail, for example, and conduct maintenance to ensure that this does not happen,” explained the reinsurer. “With Relayr’s IoT solutions, companies can obtain critical business data, which can be used to improve processes and thus profitability. Costs can be cut, energy efficiency increased, and product quality improved, to name just a few. Since it began to cooperate with HSB in 2016, Relayr’s offering has been supplemented by financial and insurance-related components,” stated Munich Re. Torsten Jeworrek, member of Munich Re’s board of management, added: “The internet of things is already changing our world and has the potential to disrupt the traditional insurance and reinsurance industry through new business models, services and competitors. This acquisition is a clear example of our strategy: We are combining our own knowledge of risk, data analysis skills and financial strength with Relayr’s technological expertise. This is our basis to develop new ideas for tomorrow’s commercial and industrial world.” Josef Brunner, CEO of Relayr, said: “We are delighted to be intensifying our relationship with Munich Re/HSB and working together to drive digitalisation in commercial and industrial markets. We help companies in those markets to successfully navigate disruption and stay relevant. The unique combination of our companies demonstrates the importance of applying first-class technology and powerful financial and insurance offerings to deliver business outcomes to customers. This transaction is a great opportunity to build a global category leader.” Munich Re said Relayr will continue to operate autonomously and will retain its “distinct startup culture” to help drive innovation and attract IoT talent. The reinsurer said the company can also use Munich Re’s and HSB’s large client base to gain access to potential new customers. The closing of the transaction is subject to regulatory approvals, which are expected to be obtained within the next four to six weeks. To view our GVNW conference newspaper please click here.

Munich Re acquisition shows how insurtech can be applied to corporate insurance

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