AI – Is there a future for actuaries?

AI represents probably the greatest existential threat and greatest opportunity for the actuarial profession in 200 years. AI will revolutionise all actuarial work, both within insurance and elsewhere. AI has been around for many years. It’s nearly 30 years since the IBM computer Deep Blue beat chess world champion Gary Kasparov. Since then computers have grown exponentially in power and capability. AI, potentially combined with phenomenal power of quantum computing, will soon achieve full human capability – and maybe much more. General AI is achieved when AI is able to perform as well or better than humans on all cognitive tasks, as opposed to the more narrow forms of AI which are designed for specific tasks. Many believe that General AI could be achieved within 5 years.

All professions face huge challenges with the growing power of AI. Every day we see newspaper headlines that AI is replacing human jobs across industries. AI is already able to do much more sophisticated mathematical modelling (e. g. of financial markets), analyse increasingly large and complex data sets (e. g. of weather patterns locally and globally) and do a lot of the work involved in actuarial reporting. As actuaries we face major professional challenges as we struggle to manage the potential biases in AI data analysis, and the difficulties involved in relying on AI modelling that we may not understand. 

Governing the use of AI is a major concern globally for governments and regulators. Actuaries are uniquely placed, with our understanding of complex mathematical models, the challenges of data analytics and statistical inference, and our professional code and experience in governance, to assist governments and regulators control the ethical use of AI. But we need to make sure that we participate in those discussions. The AI Act in Europe is just the start of the huge amount of work that will be needed.

In education, we face the challenges of developing not only future actuaries but also actuaries currently working in industry, in order to enable them to be most effective. All educators also face the challenge of how to examine students, given that any student, however poor, if armed with the latest AI tools will be able to outperform any other student without access to AI.   

AI is developing fast. We rapidly need to understand how we can leverage the power of AI to help actuaries do our current roles better and faster and to solve new challenges, for example in climate change, protection gaps and the UN’s sustainable development goals, for the wider good of Society. The IAA has recognised the great importance of AI. This April it is gathering over 50 top experts in AI and actuarial work in Singapore to tackle this huge issue and find ways forward in all these areas. It is vitally important that we learn from each other, pulling together the best talent globally. Every country in the world is racing to get to grips with the implications of AI. At the IAA we want to take advantage of this enormous international effort. 

Some are worried and pessimistic about the transformational impact of AI on our profession. But I am optimistic about the future. All new technology: electronic calculators, computers, excel spreadsheets, the internet, has produced voices predicting it means the end for the actuarial profession. But each time, technical developments have enhanced rather than reduced opportunities for actuaries. I believe the same will be true of AI and that it will open up many exciting new opportunities for actuaries. But we will need to embrace the new AI tools and learn how to apply them to new problems and challenges. AI will not replace actuaries, but actuaries with AI will replace actuaries without AI.