PricewaterhouseCoopers (PWC) recently published a terrific white paper, “How do actuarial and data science skills converge at life insurers?” PWC argues that the roles of actuaries and data scientists will be very different in 2030 than they are today. Actuarial Recruiter, Rory Hauser, highlights some core differences between data scientists and actuaries and also notes specific issues that will impede data scientists in three of the actuarial disciplines.
- Actuaries are specialists in structured insurance data while Data Scientists’ greatest value to most organizations is their ability to work effectively with unstructured data.
- Actuaries’ problem solving approach is driven by their extensive training and the standardization of their analysis, while the Data Scientist focuses on getting the prediction right through a variety of methods.
- Actuaries are users of pre-developed systems and software while Data Scientists are constantly developing new algorithms.
- Actuaries’ primary focus is on financial issues with less experience addressing wider business issues like marketing. Data Scientists attempt to understand implications across all business units.
Data Scientist Shortfalls in Core Functions of Actuaries
Actuaries are tasked with putting a number on a product. Data Scientists are primarily focused on more advanced ways to quantify risk.
Actuaries must have an in-depth financial and economic understanding of the insurance business and its products while Data Scientists will be behind in their utilization of financial statements.
Actuaries have core regulatory and account knowledge, while Data Scientists can improve the basic assumptions in the analysis but won’t be fully accountable without actuarial industry know how.
It is an exciting time for Actuaries. Those that can effectively interface or even add Data Scientist skills to their personal portfolio will become even more valuable to their organizations. It is an opportune time to add to your skills and to increase your impact on your business.
Executive Recruiter, Smith Hanley Associates, has been recruiting and placing Data Scientists with their clients for over thirty years. Actuarial Recruiter, Rory Hauser, takes that historical knowledge and expertise and applies it for his insurance industry clients. Interested in hiring or conducting an actuarial job search?