When I started my career as an actuarial student in the early 2000s, being successful required a good actuarial exam passing rate and good modeling skills in Visual Basic for Applications (VBA) or using SAS® to code.
However, just as SAS never stands still in data analytics, the skillsets required for actuaries never stop evolving, either.
I recently attended the International Congress of Actuaries (ICA) 2023 in Sydney, Australia. This event brings together global actuary leaders to share challenges, triumphs, expertise and insights. Being there made me realize how much the actuarial profession is changing; it’s undergoing a digital transformation. Because of that, actuaries should learn to adapt to these changes, embrace technology and find ways to bridge the gap between insurance and technology. Doing so cultivates a mindset of innovation to remain relevant and successful in this evolving industry. Delaying these changes can have high costs and potentially hinder an actuary’s ability to influence positive outcomes in the field.
Keep reading as I dive into a few takeaways from ICA 2023. These takeaways underscore the importance of being ready and willing to embrace the transformations shaping the actuarial field.
The convergence of insurance and technology
In the past, insurance and technology have been kept separate in the actuarial world, with most technology-based innovations centered on improving user experience. Finding an individual with a background in insurance and technology took work. However, with the increasing pressure to provide tech-based insurance solutions, the industry is now going through a revolution and trying to fill this gap. As Darryl Wagner, Principal at Deloitte, shared at ICA 2023 organizations are preparing their actuaries to become "super actuaries" and respond to constant disruptions. There is a need to find talented technology professionals who understand consumer protection needs and the regulatory challenges that come with developing new solutions.
Hesitation comes with a high cost to insurers
It is more complex to link technology and artificial intelligence to the insurance industry than to industries like telecommunications or marketing. Insurance companies, in general, are behind when it comes to technology. Many concerns stop us from taking action when it comes to a change or innovation. I remember that in one of my previous positions, I used software that had yet to be upgraded for at least 15 years. The IT department feared an upgrade would cause significant business disruption as the company has been through multiple mergers & acquisitions and has adopted many legacy systems. I totally understood the hesitation. But the problem here is that it’s like rolling a snowball. The longer you wait, the higher the risk of encountering more severe business disruptions. Outdated technology comes with a high cost. Many insurers struggle to adopt new techniques and need significant manual effort to run efficient scenarios or conduct ad-hoc analyses. Additionally, actuaries face various challenges that can prevent us from having the influence we should.
The importance of embracing a mindset shift
I cannot agree more with Inga Beale DBE, Portfolio Director and former CEO of Lloyd’s. In her speech at ICA 2023, she said, “digitalisation is going to be key for all of us.” I would not be surprised if AI and machine learning become prerequisites for actuaries. Actuarial digitalisation or transformation is a big topic and different people have different interpretations. To me, it is all about people, technology and a mindset change. A change of mindset is probably the key to a successful actuarial transformation.
Embedding an aggressive approach to innovation
I heard jokes from many people at the conference. One person said that if you give an actuary a shovel, they can use it for 20 years. They were kind of right, as so many times I was told, "If it ain't broke, why fix it?" Today, new customer expectations, emerging geopolitics, climate changes and new sources of competition force insurers to take a more aggressive and systematic approach to innovation. Actuaries should work closely with the business in a strategically aligned way. It must be embedded in a company’s growth model and fully integrated across the organization, bringing together cross-functional teams to approach challenges in new ways. Those who act sooner can deliver sustainable growth and stay ahead of the competition.
SAS has been helping insurers with their IFRS 17 implementations. We are seeing that IFRS 17 brings fundamental changes to insurance companies compared with the current practice of data granularity, calculation and disclosure requirements. Insurance companies have spent a lot of money and energy on data systems and processes and need to leverage this investment and bring it to the next level. We invite you, through innovative AI and analytics, to reimagine insurance and bridge to tomorrow.