Do you remember Mark Farrell ? We’ve shared in his article about the “Lessons actuarial Science has taught him about life”. As a reminder, Mark is a UK qualified actuary and currently Program Director of Actuarial Science at Queen’s University Belfast, PhD and Fellow of the Institute of Actuary.
He has recently posted an article on his own blog “Proactuary” about the future of the actuarial profession.
After taking part in a panel debate interview titled “Is the insurance Actuary an endangered species, or simply facing an evolutionary makeover?” organised by Rick Huckstep from the Digital Insurer, he summarized the debate into 13 key points :
1. As we enter the fourth industrial revolution and age of technology and automation, change is upon us. Many professions, including the 300 year old actuarial profession may be under threat.
2. The digital economy has led to an explosion of data. This data is emerging from many different sources and is also impacting the insurance industry (think IoT, Telematics, Wearables, etc).
3. The non-actuarial “data scientist” is encroaching into actuarial work.
4. Many actuaries are now adding machine learning to their toolkit and the actuarial profession is embracing this change.
5. In the era of “data is the new oil”, actuaries may be able to use their skills to break into new non-traditional areas.
6. Actuaries understand financial performance and policy-holder behaviour and hence they are the lifeblood of many insurance companies.
7. We are likely to see a blending of actuarial and data science in the next five years.
8. We are moving towards more dynamic pricing models as data increases in size and availability.
9. New risks will emerge that will likely require actuarial expertise to understand (e.g. drone risk or liability from autonomous vehicles).
10. We may see a shift towards growth outcomes (new business, customer retention, etc.) rather than the risk/compliance/ regulatory side of modelling.
11. Automation may enhance the actuary’s work rather than leading to extinction. Assuming you are a forward thinking perpetual learning actuary!
12. An actuary’s strong professional code of ethics provides an oversight. It is particularly important for helping to ensure that we are using data ethically and responsibly.
13. Being flexible and being able to adapt and grow is key for future actuaries.
We discussed this with Alexandre Jacobs, co-founder and Managing Partner of Asquare Partners. He globally agrees with Mark Farrell’s vision. For him, the actuary of tomorrow will have to evolve but will not disappear. Alexandre told us that he can see that this transformation has already taken place in universities. Indeed, Actuarial science programs are evolving to match the most requested skills from potential employers of the insurance sector.
Alexandre sees the Actuary profile evolving on 2 dimensions. A technological dimension: the actuary usually has a solid and pretty unique statistical background, he/she will need to complete and improve his/her IT programming skills.
The second dimension is business acumen. Indeed, according to Alexandre, business understanding is a crucial ability for the actuaries of tomorrow. Particularly in the context of low interest rates, the insurers’ financial incomes are decreasing and finding a technical balance is essential to ensure profitability. The actuary must therefore be more commercially sensitive and aware of the different profitability levers they can trigger.
“The actuary MUST evolve, because today’s actuary is not necessarily tomorrow’s expert. As Mark Farrell points out, continuing education and staying up to date is essential and crucial to the development of an actuarial career today,” he concluded.
Source and picture : Proactuary.com