On 26 February 2019, the Data Science virtual conference opened with a panel discussion.
Here two of the panellists from the event, Valerie du Preez and Maz Bown, share further thoughts on some of the benefits of data science and why actuaries need to embrace it and prepare for opportunities.
Big data and cloud-enhanced computability are enabling insurers to assess risks at a higher granularity and greater frequency than at any previous time, and this trend will continue to accelerate as more devices and infrastructure become connected. While the advent of data and computer power is nothing new, and certainly is not specific to the insurance industry, insurance has arguably been somewhat slower to adapt than other industries. This inertia perhaps reflects the relatively strong quantitative nature of our business and the key experts (ie actuaries) that are already in place, combined with legacy infrastructure and close regulation.However, the fourth industrial revolution's disruption brings opportunity. Today's actuaries can enhance the insights they bring to their organisation by embracing data science skills and techniques to extract additional value from new data and modelling solutions. This could be done by learning these techniques directly (for which many excellent courses can be found online or through learning centres, some of which are highlighted on the Data Science webpage at bit.ly/30c2f7G), or by bringing in and collaborating closely with data science experts. The essential qualities the actuary brings in either case is a detailed understanding of the insurance domain, enabling a clear framing of the problem, as well as a robustness of approach to the validation of model results with customer, society and business in mind, and an ability to clearly explain key outcomes and decisions to stakeholders.
Our experience so far has been that a fundamentally collaborative approach, with actuaries and data scientists working side by side to learn from and leverage each others' skills, has worked well, enabling all to deliver more efficiently on business challenges. For actuaries who are looking to learn and apply data science techniques, the main attributes that help us succeed are our ability to embrace change with resilience and our active passion for continuous learning - ideally combined with an affinity for data manipulation and coding (R or Python, for example). It never hurts to add a string to your bow.
Actuaries need to consider which skills will be required as the wider insurance landscape and business model evolve. Our profession has been structured around the traditional areas of pensions, life insurance, general insurance and investments, but even within these businesses, processes and roles are changing to embrace automation and enable improved insight to meet customer needs. Actuaries need to become more agile and versatile if they are to thrive in this landscape.
There is a need for us to explore outside our traditional areas of work, where potential opportunities include roles involving expert data science and visualisation skills, information technology and computer science skills, as well as the ability to support the business in customer engagement and enterprise risk management as a result of being exposed to new technologies. Above all, the future actuary will need to use their skills to communicate the impact of this changing environment to senior leadership, boards and regulators.