P&C insurers have increased their use of predictive modeling in almost every line of business. However, most do not apply data-driven analytics uniformly throughout the enterprise, and usage fluctuates significantly by line of business and company size, according to Towers Watson's fifth annual "Predictive Modeling Survey." Predictive modeling has helped improve insurers' bottom lines, Towers Watson says; the effect on top-line results has been less significant.

"Personal lines carriers operate in a highly competitive, mature market, so it's not surprising a high percentage have adopted many aspects of modeling," says Klayton Southwood, senior consultant, Towers Watson. "On the other hand, commercial lines carriers face less intense pricing pressure in some segments, in part due to heterogeneous risks and the heightened reliance on individual risk underwriting expertise, particularly in large risk/specialty lines."

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