Munich Re was one of the first traditional reinsurance companies to begin venture capital investing and spotted the emergence of the insurance technology, or insurtech start-up wave, early on in its cycle.
As a result, Munich Re Ventures invested in some of the early and now highest-valued insurtech’s around, which will have positioned its investors well for future profits as the fund’s realise the value in their portfolios.
Now, across four venture funds raised by Munich Re Ventures, the venture capital investing arm of the major reinsurance firm has more than $1 billion in assets under management.
So far, Munich Re Ventures has invested more than $280 million in 36 companies, with a number of the most successful unicorns from the first generation of insurtechs included.
The new $500 million Munich Re Fund II will see Munich Re Ventures invest in early stage and growth stage companies across five sectors, including InsurTech, ClimateTech, Cybersecurity and Privacy, Commercial and Industrial Equipment Technologies, and Future of Transportation.
The overarching theme is on risk technology and areas of innovative risk application, such as climate, space, internet of things (IoT) and broader fintech opportunities.
“Doubling our venture capital activities is a result of the Munich Re Group having already seen outstanding financial results and strategic value from the portfolio to us and the insurance industry,” explained Thomas Blunck, Member of the Board of Management, Munich Re. “Munich Re Ventures is an essential lever for Munich Re’s business and innovation strategy. With the new fund, MRV is set up to bring even more value to portfolio companies and co-investors with not only capital but increased access to Munich Re capabilities and our insurance partners.”
The Munich Re Ventures team has a mandate to fund innovative risk startups, while also focusing on the strategic interests of Munich Re and the broader insurance industry.
It’s a wide remit and Munich Re can also put its balance-sheet, resources and deep risk expertise to work in helping portfolio companies to succeed.
“We are thrilled by Munich Re’s recognition of the financial and strategic performance of our initial funds, and by their decision to double the size of the Munich Re Ventures platform for funding the most visionary and transformative entrepreneurs touching risk transfer,” added Jacqueline LeSage, Managing Director, Munich Re Ventures.
A number of insurance-linked securities (ILS) investment managers also allocate to insurtech opportunities, as a way to access risk-linked returns and to build partnerships for the future.
As well as raising the new $500 million fund, Munich Re Ventures is expanding its Portfolio Development platform as it looks to accelerate portfolio company success.
The platform means entrepreneurs can engage directly with areas of the Munich Re Group and its business leaders, ecosystem partners, and other industry executives across the globe.
“The new fund approach and enhanced platform allow Munich Re Ventures to significantly amplify the distinctive value-add we bring to our portfolio companies,” LeSage continued. “Munich Re Ventures has deep connectivity within Munich Re and the insurance industry to help our portfolio companies accelerate their businesses. We will now expand our appetite to invest in companies where the strategic relevance is further out on the horizon. As a result, Munich Re Ventures will be able to invest earlier, make decisions faster, and provide increased access to experts and resources across the full network of Munich Re businesses and partners at the optimal time in a start-up’s funding arc.”
Investing in the future of the industry is critical for established companies now, providing them a way to access and engage more closely with innovation, create partnerships for the future that can leverage risk capital in time, and also generate multiples on exit as insurtech and risk tech investment valuations grow further into the future.