Derek Cribb believes that actuarial business knowledge and expertise will enable the profession to play an integral part in a data-rich future
Today I've walked 7,456 steps and climbed 17 flights of stairs, my heart rate is currently 83 bpm and my resting heart rate today is 68 bpm. Data is everywhere; you can't escape it!
I recently spent the afternoon with a senior analyst in the insurance market. We had arranged to meet for an hour to discuss how the IFoA can better engage the C-suite leadership of insurance companies; we actually spent the first 45 minutes discussing the great value actuaries can add to an increasingly data-rich world.
Data can overwhelm, and when it does it can become destructive, hiding the reality of what is going on. Business leaders understand this, narrowing down the analysis of performance to a small set of KPIs and well-tested business analysis, only drilling deeper into the data when needed. It could be argued that regulators have been asking for more data than they could ever possibly analyse, perhaps giving a false sense of oversight and security.
So, not all data is useful, but most broadly agree that more data is a good thing, and at its most powerful when business knowledge and expertise is applied. That's a huge opportunity for members of the actuarial community.
There's a danger of our community getting caught up in building and churning the handle on models. This is a threat as we see more influence from the likes of artificial intelligence; who can write better computer models than computers? The real opportunity is to develop business expertise in analysing and framing the model's outputs into the real world. Outputs need context; for business leaders to make effective decisions they need to believe in the credibility of the data, and what it means for the risks and opportunities of their businesses. Data scientists I talk to agree that the interpretation of data in this way is still very much the human domain, and will remain so for some time to come.
I don't know what skills will be needed in the data-rich future. I do know that actuaries, in addition to being ethical and professionally accountable, are highly intelligent and data rational - a great headstart. But there is no divine right to this nascent market; all the relevant professions can see the same risks and opportunities.
The speed of development also means that any formal examination that is produced by the IFoA or others will always be at least partially behind the curve. This puts the onus on you, as a professional, to take the actions required to bring your skills up to date. The IFoA will support you in developing these skills, but the reality is that there are many supplemental rich sources to draw from.
So what is the IFoA doing in this sector? In 2016 we launched our MAID (Modelling, Analytics and Insights from Data) Working Party. Led by Michael Tripp, this is a cross-practice group, supported by dedicated executive resource. There are multiple strands to this work that blend the best of technical research with exploring pragmatic opportunities for application.
MAID has had some great progress to date, and more is to come. We are leveraging its work by convening a symposium of all the data working parties of the actuarial professional bodies across the globe later this year.
In 2016 we also launched three major funded research projects through our Actuarial Research Centre, one of which specifically focused on big data in health. Again, members of other actuarial associations have looked at our activities and have contributed both financially and with additional data inputs.
By bringing the actuarial community together we live up to our strategy recognising that the global profession is stronger when it works together. By sharing the best of our thinking and progress we can put the global actuarial community on the front foot.
We support actuaries as a whole, and our members in particular, in making the most of this increasingly data rich and fast-changing world.
If you would like to know more about our research projects or the MAID Working Party please contact Sarah Mathieson