Actuarial profession ready for innovation

After little change over the past 15 years, the actuarial industry is ripe for disruption. But the good news is that disruption should free up actuaries to concentrate on the 'story-telling' side of their profession.

"We still spend too much of our time doing operational work," Ajay Parshotam, manager at Deloitte Actuaries and Consultants told attendees of the 'The Future of the Actuary' session at the Actuaries Institute's All Actuaries 2020 Virtual Summit.

"Actuaries are very educated and very strong resources for their companies, but we aren't spending the time doing the things our stakeholders want us to do."

Artificial intelligence - AI

Advances in artificial intelligence have the capacity to assist actuaries in much of the operational work that is chewing up their time. One relevant area where AI capabilities are already being explored is claims and underwriting automation.

"This has very direct implications to us as actuaries," Ryan Boyd, head of corporate actuarial - Asia Pacific at Allianz Partners, told the panel.

AI claims automation has the potential to drastically reduce the time lag between receiving a claim and payment of that claim, which has implications for actuaries working in reserves.

"When AI machines are able to do the more demanding work (in a fast way) I feel us actuaries are going to be spending our time in a different way," Boyd said.

The skills required of actuaries then will be more around their ability to interpret data in a non-technical fashion to add value to the companies they are working for.

Data scientists versus actuaries

The panel also addressed the issue of perceived competition between 'data scientists' and actuaries and how the two professions might be able to co-exist and complement each other.

"I don't think there is anything such as threats when it comes to data analytics," Boyd said.

And Parshotam predicted a world where actuaries and data analysts worked closely together for the most efficient outcomes.

"One of the shortcomings of actuaries is that we try to solve everything but I do feel like I didn't study to be a data wrangler - I don't think that's our core skill," he said.

"With a team of data analysts we could give that work back to the machine."

Future challenges

The panel, which also included Jas Singh, managing director at recruitment firm SKL Actuarial, agreed that in the future actuaries will need to be agile, flexible and resilient. They will have to broaden their perceptions beyond the traditional definition of their role and focus on the softer communication, 'story-telling' type skills to better help the companies they work for.

"If we are going to convert our analysis into business solutions we need to be able to sell that," Parshotam said.