Munich Re is investing in Big Data to improve its handling of risks and shore up its position against challenges from new competitors.

It says Big Data analysis can reveal trends in client portfolios, help improve processes, optimise holdings and provide targeted support to sales.

But it warns competitors outside the sector may analyse data sets more quickly and apply the results to new applications that place traditional insurers under pressure.

“The most important aspects are the will and ability to invest in sufficient resources and work together with the right partners,” Munich Re Board of Management member Ludger Arnoldussen said.

Munich Re says Big Data is a key part of its innovation drive and will provide new, clearly defined and more flexible insurance solutions and support services.

“We are seizing these opportunities – with our own resources and supported by external specialists,” Mr Arnoldussen said.

Examples include combining 16 terabytes of data from Munich Re, clients and third parties on a natural catastrophe platform to improve loss assessment and resource management.

The platform is in use in Mexico and will soon be available in the UK.

Automated monitoring of 7000 digital news channels with a daily volume of 250 gigabytes allows fire losses in the UK and US to be recorded quickly and cheaply. Comparing that data with risks in portfolios helps identify patterns and speed claims management.

Munich Re says artificial intelligence will play an increasingly important role in collection and processing of Big Data, and has already been used for events such as Hurricane Matthew.

“But even in the long term, automation cannot replace strategic decision-making and maintaining good customer relations,” Mr Arnoldussen said.