Munich Re announced it is taking a further key step to create new business models in industrial Internet of Things (IoT) through the acquisition of the software company “relayr” via Munich Re’s subsidiary, Hartford Steam Boiler (HSB).
Valued at US$300 million, relayr offers industrial companies, which are seeking to digitalize their business, a comprehensive range of services — from initial consultation on the right technology to overseeing implementation and supporting operation, said Munich Re in a statement.
The amount of the acquisition was not disclosed.
Relayr has developed a platform that can be used by companies to connect new and legacy hardware and software to extract and analyze data from physical objects such as machines and equipment, said Munich Re, describing relayr’s activities.
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. 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.
While relayr will continue to operate autonomously, it will benefit from the group’s financial strength and its large industrial client base, Munich Re said, noting that relayr currently focuses on small and medium-sized enterprises. Relayr sells its solutions directly, in cooperation with consulting partners, and indirectly via technology companies.
The group said that its IoT strategy continues to be based on a combination of building in-house solutions, cooperating with partners and acquiring IoT expertise.
“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,” said Torsten Jeworrek, member of Munich Re’s board of management.
“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,” Jeworrek added.
“We are delighted to be intensifying our relationship with Munich Re/HSB and working together to drive digitalization in commercial and industrial markets,” commented Josef Brunner, CEO of relayr.
“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,” he noted. “This transaction is a great opportunity to build a global category leader.”
Greg Barats, president and CEO of HSB, and responsible for Munich Re’s IoT strategy, said: “HSB has always focused on insurance and technology. Back in 2016, HSB invested in relayr in an effort to harness the strategically significant business potential offered by IoT. relayr’s end-to-end IoT solutions for the industrial and commercial sectors are an ideal addition to our Group’s capabilities. relayr will help us to rapidly implement our global strategy to develop new IoT solutions for our clients. Digital transformation in the industrial and commercial sectors offers opportunities for new services and financial applications.”
The closing of the transaction is subject to regulatory approvals, which are expected to be obtained within the next four to six weeks.
Makes it possible to determine when a machine is likely to fail, for example, and conduct maintenance to ensure that this does not happen. With relayr’s IoT solutions, companies can obtain critical business data which can be used to improve processes and thus profitability.