The Terminator is coming! At least that's one potential vision of the future, invoked by Boris Johnson at the UN last year while he speculated about artificial intelligence (AI). We can certainly debate how realistic that vision is, and what the possible timescales might be.
Perhaps a more relevant question for the foreword of The Actuary, though, is how technology will change the way we work. Some speculate about a future in which automation makes the vast majority of people redundant. Others suggest that the current level of expectation will not be sustained, and that we may even see another 'AI winter' where investment in this technology diminishes.
Analogous concerns have been around for many years. In response to being shown a knitting machine more than 400 years ago, Queen Elizabeth said to the inventor: "Consider thou what the invention could do to my poor subjects. It would assuredly bring them to ruin by depriving them of employment." Such fears have continued through the first, second and third industrial revolutions. In each case, while technological advances did render some human activity redundant, they also enabled new activity: some of Queen Elizabeth's subjects became designers and operators of knitting machines. More recently, technology has enabled humans to become airline pilots, web designers, systems architects and so on.
It's no surprise, then, that the fourth industrial revolution is prompting similar concerns. While it's tempting to assume history will repeat itself, with new human jobs being created, we need to remember the regulatory warning: 'past performance is not a guide to the future'.
The fact that sufficient new jobs have been created in each previous age doesn't mean that it will necessarily be the case this time. However, there's one feature of this revolution that gives me confidence in the actuarial profession: the ever-growing quantity of data.
Data is proliferating in our core practice areas of insurance and pensions, creating opportunities for actuaries to become involved in new activity. For example, lapse management has historically involved analysing population averages to support pricing and reserving. Data now allows us to analyse and predict lapse behaviour at an individual level. This, in turn, gives life actuaries the opportunity to get involved in customer relationship management.
Beyond our core practice areas, every industry is being inundated with data, yet most sectors don't have a strong heritage of managing it. They need professionals who excel at applying maths and statistics in a commercial environment. Pioneering actuaries are responding by helping supermarkets, telecommunications companies and internet companies to realise the value in their data.
While technology will lead to the automation of some actuarial tasks, it is already enabling many opportunities. I believe that this trend will continue, but only if we as individuals and as a profession make it happen. Creatively applying our core actuarial skills using the latest techniques will ensure we remain valuable to clients, employers and wider society. I look forward to seeing how our members forge a brave new path in the digital world.
John Taylor is the president of the Institute and Faculty of Actuaries