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The Actuary The magazine of the Institute & Faculty of Actuaries
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Successful AI adopters encourage actuaries to become data scientists

Empowering actuaries to become data scientists is a key feature of insurance companies successfully harnessing artificial intelligence (AI) to foster change, Microsoft has found.


21 OCT 2019 | CHRIS SEEKINGS
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AI shaking up insurance industry ©iStock


In a new whitepaper, the technology giant said that AI pioneers are moving away from the crude averages that still provide the basis for many actuarial and underwriting models.

It explains how formerly technical elements of data science are being automated and democratised, allowing actuaries to build and use new sophisticated AI models.

"The take-up of AI has become a key feature in driving business changes across the insurance journey lifecycle," the whitepaper says.

“New AI approaches allow companies to accurately depict multifaceted individual behaviour and build optimal risk profiles specific to an individual or event.”

The paper, co-produced by AI platform SparkBeyond, also reveals that successful firms collaborate and share data insights to improve outdated and inefficient processes.

Harnessing telematics, data-literate and progressive business leaders, and cross-functional teams that embed data into their strategy, are other key features of successful AI-adopters.

The researchers also highlight a range of benefits that AI can have for insurance firms, from individualised risk assessments to automated underwriting.

Moreover, AI can help companies make business decisions that drive positive social impacts, from health and wellness to natural catastrophe mitigation and planning.

As for customers, the researchers explain how AI can generate slick digital experiences, more personalised communications and quicker insurance payouts.

"The changes in the next 10 years will be as profound as the effects of the digital revolution of the 1990s and 2000s,” the paper says.

“AI will affect the whole value chain, from marketing and distribution, underwriting and pricing, to claims management – driving new customer experiences, products, and operating models.

"This whitepaper seeks to frame the opportunities and risks that AI poses to the insurance industry – executives, take note."

 

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