AI: Is there a futurefor actuaries?
Charles Cowling
President IAA

IAJ seminar
May 2024

AI – Is there a future for Actuaries?
1. Background to AI– Why AI matters to us all– What AI can already do … and what it can’t (yet!)

2. What AI might mean for Actuaries– The future is in our hands: How might AI transform actuarial work?

3. International Perspective– Opportunities for Actuarial Intelligence– The IAA ResponseIn 2024 the IAA represents 75,000+ actuaries in 115+countries

3The Mission of the IAA

IImpact global stakeholders

AAssure the reputation of the profession

A

Advance the competency of the profession

4

The Mission of the IAA

I

Impact global stakeholders

A

Assure the reputation of the profession

A

Advance the competency of the profession

5Part 1:
Background toAI

Why AI matters to us all

What AI can already do … and what it can’t (yet!)Background:
Putting Gen-AI in context

The dawn of useful AI – a “once in adecade” moment
1980

1990

Excel

Email2000

Google2010

iPhone2020

Gen-AI

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Examples in the real world
We are already interacting with AI every day8

AI in the headlines
There is rarely a newspaper without an AI headline

Sources: The Guardian 11 August 2023 / Financial Times 18 June 2023 / BBC News 20 May 2019

What can AI already do?
GPT-4 can already:• Perform rudimentary drafting tasks• Pass the general bar exam!
• Write computer code faster and morereliably than humans – “Co-Pilot”• Ace “SAT” tests that head teachers said
they found “personally challenging”• Do maths … sometimes!
10Part 2:
What AI means for Actuaries

The AI tidal wave…

Is anyone able to define AI?

… could become a tsunami… as quantum computing becomes a reality

What are the risks?
And how could actuaries help to mitigate them…?

Data privacy &cyber security

Statistical bias

ErrorsExplainability© / legal risk

Human touch &people insight

Regulatory risk

“People risk”
during disruption

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From Artificial Intelligence to Actuarial Intelligence
What are the opportunities?
Enhanced Decision Making•

Analysing large data sets; identify patterns, trends,
correlations

Personalisation and Customer Experience•Customer preferences and tailored recommendations

Advanced Analytics and Prediction•Machine Learning; complex data sets, predictive
analytics, risk analysis

Innovation and Competitive Advantage•

Development of new products and services

Improved Efficiency and Resource Optimisation•Optimise processes, streamline workflows, efficient
resource allocation

Enhanced Customer Support•

Virtual assistants, round the clock customer support

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Part 3:
International Perspective
New Roles
New Solutions
New Industries

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From Artificial Intelligence to Actuarial Intelligence
Global Opportunities
New Roles
New Roles
New Solutions
New Industries
New Solutions
New Industries

17Artificial Intelligence ➔ Actuarial Intelligence
Opportunities – New Roles
Frank Chang•Lead Actuary, Google, 2012

•Vice President, Applied Science, Uber

Toby Hall•Chief Data Officer, Delta Dental of Michigan, 2012•

President & CEO, Roosevelt Innovations

Jacky Ng•

Chapter Lead Data Science APAC, Advanced Analytics CoE, Swiss Re,

Dorothy Andrews•Senior Behavioral Data Scientist, National Association of Insurance Commissioners

Alice Locatelli•Managing Director - Technology and Innovation, Society of Actuaries
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AI and Machine Learning as opportunities
to improve insurance penetration in Africa
Empowering Small Holder Farmers in Kenya and Ghana – Dr J Olukuru

19Quantium – World leader in Data
Science and Artificial Intelligence
Founded by an actuary, Adam Driussi, in 2002
We bring expertise in two core domains to make the most ofopportunities in the ‘big data world’
Data science• Translating raw data into
actionable insight• Data cleansing and curation• Data ecosystem• Data monetisation• Applied analytics

Artificial intelligence• Build transformative, datapowered solutions• Decision support tools• Decision engines• Machine learning

2/3rds of Australian actuarial students are specialising in data
analytics>50% of younger actuaries (age<35) see Data Science as
their primary or secondary practice area.
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From Artificial Intelligence to Actuarial Intelligence
IAA Response – AI Task Force & Work Steams•

Professionalism and Ethics - Developing guidelines and principles for actuaries•

Education - Developing enhanced curricula and training modules to include AI•

Changing role of Actuaries - Developing basic definitions of AI; areas where AI canaugment actuarial work; encouraging development of appropriate actuarial expertise•Governance - Monitoring and evaluating governance frameworks, policies, andregulations; engaging with regulators, standard-setting bodies, and policymakers•

Innovation - Cultivating a growth mindset among actuaries

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From Artificial Intelligence to Actuarial Intelligence
IAA Task Force – Global Summit Singapore 4th/5th April

Established work streams•

Gathering experts, including non-actuaries•

100+ volunteers from around the world

Global Summit•

Bring experts together; drive activity; share progress, ideas and expertise;•

Establish global network•

Broadcast/record sessions

End 2024 Deadline•

Initial project work•

Propose follow-on work

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From Artificial Intelligence to Actuarial Intelligence
IAA Response – Professionalism and Ethics

Initial Actions•

Create a repository of AI professionalism and ethics related sources•

Contribute to a glossary of terms or definitions to support a common understanding of AI(for actuaries)•

Develop an assessment of AI Ethical risk classification/taxonomy with specific focus on
professional aspects related to such risks•

Develop a “considerations” note on key questions to address•

Develop a document for FMA’s to assist in testing their existing code of conduct andguidance against to see if ‘fit for purpose’ for AI•

Develop use cases / case studies on professionalism and ethics•

Develop messaging to Supranational organisations on how actuaries and AI contribute totheir mandates

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From Artificial Intelligence to Actuarial Intelligence
IAA Response – Education
Key Issues•

What do actuaries need to learn? - different actuaries will have different needs•

If you add new [AI] things to the syllabus what do you take out?

•Given the pace of change, it will be challenging to keep a syllabus up-to-date•

How should assessment of actuaries [with AI] evolve?

Initial Actions•

Define what actuaries need to know / be able to do to successfully deploy AI•

Finalise initial summary of AI topics of that could be included in Education,•

Develop ideas/guidance on using AI for exam answers•

Develop principles for validation / interpretation skills (using AI-augmented solutions)•

Create ideas for actuaries to learn from AI-augmented actuaries•

Finalise review of AI Education Programs around the globe•

Develop use cases / case studies and lessons learnt on AI-enhanced profession•

Develop best practice examples of AI collaboration with other industries

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From Artificial Intelligence to Actuarial Intelligence
IAA Response – Changing role of Actuaries

Initial Actions•

Review of literature of practical relevance - from actuarial societies and actuarial firms•

Produce questionnaire to set up and distribute to local actuarial societies•

Produce standard glossary of AI terms used in actuarial work•

Develop guiding principles on the design, usage and maintenance of AI tools / models•

Develop use cases / case studies•

Develop training materials on new [AI] tools and models

25From Artificial Intelligence to Actuarial Intelligence
IAA Response – GovernanceInitial Actions

•

•

•

Produce library and comparison of AI regulation/guidelines worldwide•

Identifying particular challenges of actuarial relevance•

Implications of AI regulation/guidelines on actuarial work•

Benchmarking (weak vs strong implications)

Develop governance framework covering:•

Data governance – including 3rd party data (vendor), synthetic or alternative•

Model governance – e.g., to include model outcome bias (e.g. source of bias)•

Implementation/conduct – ensuring responsible use of AI

Outline of guidance notes on•

Validation – input and output•

Testing – customer outcome•

Documentation
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From Artificial Intelligence to Actuarial Intelligence
IAA Response – Innovation

Initial Actions•

Competitions•••

Inspire actuaries globally to submit ideas

Inform•Collect information on new AI applications for actuaries•

Share innovations

Marketing•

Produce marketing strategy for actuaries and AI•

Develop new ways to promote the work of actuaries and AI•#AIforActuaries

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Is there a future for Actuaries?
Maybe, maybe not … but …

Actuaries with AI
will replace
Actuaries without AI

Four Futures for Actuaries in the Wakeof AI - Actuarial Review Magazine(casact.org)

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Any Questions?

International Actuarial Association
Association Actuarielle Internationale
1203-99 Metcalfe, Ottawa ON K1P 6L7 Canada
Tel: +1-613-236-0886
Email: secretariat@actuaries.org
www.actuaries.org