The use of actuarial artificial intelligence scares actuaries. They believe their job security is threatened. Forty years ago actuaries worked in shifts. The early shift calculated estimates, the later shift checked the work. The desktop computer dramatically changed that process but the number of casualty actuaries grew from 1000 in 1977 to 8000 today. The introduction of improved processing only increased the demand for actuaries then as it will now with the increased utilization of AI.
David Ingram, FSA, Willis Towers Watson, at the CAS Annual Meeting in Anaheim said, “Actuaries will become experts at systems analysis, reaching conclusions from understanding systems of models with complex interdependencies.” Actuarial artificial intelligence is the next step in how people will go about making decisions. Ingram went on to say that actuaries already use three systems for decision making, instinct, scientific method and statistical analysis. He views systems analysis as being the fourth tier.
Actuarial artificial intelligence provides a structured, consistent and unbiased way of performing actuarial work that minimizes the need for human intervention. AI along with process automation and technology will make an actuary much more productive. Actuaries will no longer have to make decisions every step of the way, only once the data has been processed and the model output received. It may be necessary to overwrite the output because of qualitative information that hasn’t been captured in the data or new events that trigger adjustments. The actuary is still adding value.
AI offers options to connect data points from large data sets that haven’t been connected in the past because they were too computationally complex. Actuaries can leverage and incorporate this output or results and push actuarial science into new and exciting places. As James Lynch, FCAS and CAS Board of Directors, says, “We’ve done such a good job of harnessing the machines that demand for the humans is running ahead of supply. What did we do right? We created systems that made our work more valuable.”
An article in Forbes on Separating the Myths from the Facts on AI said business spending on AI will jump 54% increasing market revenues by 38%. PWC says global GDP could increase by $15.7 trillion by 2030 because of AI.