North American insurers are increasingly using predictive modelling in almost all business lines, new research shows.

Insurers in the highly competitive personal lines market use data-driven analytics more than those in commercial lines, Towers Watson’s fifth annual survey of insurers finds.

Commercial lines face lower pricing pressure due to uniformity of risk and because more individual expertise is used in underwriting, the report says.

“Specialty lines are considered by some in the industry to hold the potential for more profitable growth and specialty lines carriers are showing increasing interest in applying predictive modelling to their businesses.”

Smaller insurers prefer to differentiate their business in areas such as claims service rather than the use of modelling.