Personal lines insurers are committed to predictive modelling and now commercial lines issuers are using the statistical tool to improve their understanding of price and risk.

The latest Towers Watson Predictive Modelling Benchmarking Survey has found almost all US personal lines insurers are committed to predictive modelling, but only 70% of commercial lines insurers use or plan to use it in risk selection and pricing within the next two years.

The survey of 60 US and Canadian insurance executives found the greatest growth potential for predictive modelling is in commercial property, commercial multi-peril and business owner policy lines.

Towers Watson says the drive for improved performance is fuelling interest in modelling, and CEOs see it being used in pricing, product innovation and refinements to underwriting and risk selection, claim applications and target marketing.

“More and more participants that use predictive modelling report [are] improving both their top and bottom-line results,” the survey report says.