Munich Re has made an industrial InsurTech play with the acquisition of Relayr, an Internet of Things (IoT) platform that can predict when and how machinery will fail.

The reinsurance giant bought the InsurTech platform, valued at $300mn, through its subsidiary Hartford Steam Boiler (HSB).

Relayr boasts an ability to connect new and legacy hardware and software to extract and analyse data from physical objects such as machines and equipment.

As a result, Munich Re said, the firm can determine when a machine is likely to fail and conduct maintenance to ensure that that does not happen.

The tech can also be used to obtain “critical” business data, which can be harvested to improve processes and thus profitability, Munich Re said.

“Costs can be cut, energy efficiency increased, and product quality improved, to name just a few,” the reinsurance giant went on.

In a statement, Munich Re boss Torsten Jeworrek said: “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.”

He said the deal formed the basis of the reinsurer’s plans to develop new ideas commercial and industrial cover.

Relayr boss Josef Brunner said: “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.”

HSB president and CEO Greg Barats who heads up Internet of Things strategy for Munich Re said: “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,” he went on.

“Digital transformation in the industrial and commercial sectors offers opportunities for new services and financial applications.”