Effective predictive modeling enhances underwriting and pricing profitability. This is Towers Watson’s conclusion after analyzing results of its “Commercial Lines Insurance Pricing Survey” (CLIPS), which compared prices charged on policies underwritten during Q2 2010 to the prices charged for the same coverage during the same period of 2009.

According to survey results, commercial insurance prices in aggregate declined by 1% during Q2 2010, and insurers that utilize predictive modeling in their pricing and risk selection process reported that they were better able to hold price levels. While data for most lines indicate flat prices, the commercial property, directors and officers liability, and employment practices liability lines show price reductions.

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