In early April, some 50+ actuaries from 17 countries gathered for the two-day IAA AI Summit in Singapore to discuss the rise of artificial intelligence (AI) and its impact on the actuarial profession.
The summit was sponsored by the International Actuarial Association (IAA) with explicit blessing from its president Charles Cowling. Charles – whose day job is the Chief Actuary of Mercer UK – is keen to encourage actuaries to explore opportunities presented by AI. He is convinced that with better understanding of the risks and opportunities related to AI, actuaries would be well-positioned to seize the new roles, new solutions and new opportunities created by the AI tidal wave.
ABOUT THE IAA
Even though I have volunteered for both the Canadian Institute of Actuaries (CIA) and the Society of Actuaries (SOA) for more than a decade, until this, I knew little about the IAA. An organization registered in Switzerland with operations run out of Ottawa, Canada, the IAA has a three-fold mission:
- Impact global stakeholders.
- Assure the reputation of the profession.
- Advance the competency of the profession.
Through its 100 members (73 Full and 27 Associate), the IAA represents more than 75,000 actuaries from over a hundred countries. The CIA is a Full member of the IAA.
AI TASK FORCE
When the idea of establishing a task force to focus on AI was floated in the IAA Executive Committee, actuary Peter Withey couldn’t put his hand up fast enough. “I find the topic to be really interesting and so strongly support the global profession working together to craft a response to AI and a direction regarding the use of AI,” said Peter, whose drive and passion shine through his ambitious nature.
Chaired by Peter and supported by Vice-Chair Suee Chieh Tan, the IAA’s AI Task Force (AITF) objectives are:
- advance competency of the profession with respect to AI;
- promote the role of the actuary; and
- prepare the IAA to proactively engage with supranational stakeholders.
To better define the work scope and minimize overlap, the AITF is divided into five work streams; their purposes are mandated as follow:
- Innovation: Create a growth mindset among actuaries.
- Governance: Monitor and evaluate governance frameworks, policies and regulations, and engage with regulators, standards-setting bodies, and policymakers.
- Changing roles of actuaries: Develop basic definitions of AI, identify areas where AI can augment actuarial work and encourage development of appropriate actuarial expertise.
- Professionalism and ethics: Develop guidelines and principles for actuaries.
- Education: Develop enhanced curricula and training modules to include AI.
Through its member organizations’ nominations, the AITF selected 97 actuaries from around the globe, nearly half of whom attended the AI summit in person. From a leadership perspective, SOA CEO Greg Heidrich, UK Institute and Faculty of Actuaries President Kalpana Shah, and the IAA’s President-Elect Bozenna Hinton were also in attendance, along with of course the IAA’s current President Charles Cowling, highlighting the top-of-mind awareness of AI for many actuarial professional organizations.
Over the two days, plenary sessions were held, and breakout sessions were conducted among the five defined work streams. The mandate was clear – each work stream is to come back with recommendations of concrete next steps to complete this initial project by December 2024.
WHAT’S NEXT?
From leadership to delegates, the resonating belief was that actuaries will not be replaced by AI, but actuaries who can harness the power of AI will replace actuaries who cannot.
At end of the two days, the chair and co-chairs from each work stream presented their discussion results and recommended next steps, and plans were made to regroup with the task force members who could not make it to the summit. It also became clear that although the current project spans only until year-end 2024, there will be other initiatives sprouting from this work over the next eight months, which continue well into 2025. As Peter put it, “The real test will come when we turn the intentions arising from the summit into tangible deliverables that do not arrive behind too late to be of value.”
After all, even though AI as a research field has been around for nearly 70 years, the recent democratization – propelled by ChatGPT and the like – has raised public awareness and enabled wide consumer adoption of AI to a level never seen before. And it is here to stay. As actuaries, we ought to take out our proverbial surfboard, to ride forward gracefully on the swell of this incredible technological evolution.
SUMMIT INSIGHTS FROM KEY ACTUARIES
Following the discussions and collaborative efforts at the AI summit, I spoke with several key participants to gain further insights into their personal journeys with AI and their perspectives on the future of the actuarial profession in the age of artificial intelligence. Below, Bernice Lim and Tim Bishop, FCIAs who are both actively involved in the IAA’s AITF, share their thoughts on the transformative power of AI and its implications for actuaries worldwide.
IAA AITF WORK STREAM: GOVERNANCE
Q: What got you interested in AI?
A: I have always been personally interested in technological advancement and am eager to learn about industry trends and where the world is heading. My interest in AI stemmed from a simple curiosity about how platforms like Spotify know which song to recommend to me. This initial inquiry led me down a path of trying to understand AI and its broader implications to our lives and society. As I delved deeper, I became intrigued by the possibilities of AI in revolutionizing different industries and reshaping our daily lives.
Q: Why is getting involved in this initiative/topic important to you?
A: Getting involved in the AI initiative is important to me for several reasons. AI is at the forefront of technological innovation in today’s world, so being part of this initiative allows me to keep abreast of AI developments and be prepared to embrace the transformative changes it brings to our daily lives.
I am also keen to explore AI’s influence on the role of actuaries and how actuaries can adapt and leverage it effectively in our work. Being able to contribute to the actuarial community’s adaptation to AI and explore the use of AI for problem solving excites me. As AI tools become increasingly essential in both personal and professional aspects of our lives, I believe it is crucial to be part of this journey.
Q: How do you expect to interact with AI in 5-10 years?
A: In the next 5-10 years, I expect a more natural and personalized interaction with AI. AI is poised to integrate into our daily routines at home and work, helping us navigate through life more efficiently. Continued advancements in technology and data will allow AI to provide even more timely and personalized responses.
Furthermore, we can expect the ethical guidelines and regulations associated with AI to be more developed within the next few years. As our society becomes more informed about AI and its potential risks, we will be better equipped to interact with and navigate AI responsibly and effectively.
IAA AITF WORK STREAM: INNOVATION (CO-CHAIR)
Q: What got you interested in AI?
A: I started into data science and machine learning about five years ago, mostly for general interest. Back in university, I studied computer science and statistics, so I already had a background in some of the common tools and techniques used very widely today.
Now, with the explosion of generative AI and other easy to use systems, broader use of AI has become available to anyone. The field is fascinating. AI will make a significant impact on the actuarial profession. What and how big that impact will be is yet to be seen. There is a lot of hype out there. That said, it would be foolish to underestimate AI. I’m glad the IAA has created the AI Task Force.
Q: How do you expect to interact with AI in 5-10 years?
A: I want to answer this question from two perspectives: as a member of the public and as an actuary.
As a member of the public, I’m most concerned about privacy and public protection. There will be more and more concern about “who is on the other side” of many interactions with “people.” If you think things like surveillance capitalism or good old fraud is bad now, just wait.
As an actuary, I think the bigger impact of AI will be how actuaries interact with non-actuaries as a result of AI. In past, actuaries have been largely left alone in a rather insular profession. AI will change this in a couple of ways. Actuaries can expect to work more with data scientists. I think that one is obvious. However, many actuaries and actuarial employers should expect to explain their work more to the public. Search engines lead many people to self-diagnose their medical conditions, causing medical professionals to explain or justify more. While not as easy as self-diagnosing chicken pox, AI and related tools will start to make it available for savvy consumers to challenge actuarial work.
Non-actuaries will have new abilities to look into the results of what actuaries do. True, AI tools are really just fancy pattern matchers, but there are a lot of patterns in what actuaries produce. The industries in which actuaries work will come under more scrutiny and transparency because more people will be able to analyze what we do. Media outlets are hiring “computational journalists.” These are real data scientists who use advanced analytic models and AI to find interesting things to write about. They will look at insurance and pension programs. Companies and industries could be exposed to more reputational risk.
Q: Why is getting involved in this initiative/topic important to you?
A: Two reasons. First, AI is fun, challenging, creative and on the leading edge. Second, as I said earlier, I believe AI will have a significant impact on our profession. Jim Doherty, a former boss of mine and avid CIA volunteer, once made it very clear that all actuaries have a duty to support the profession. To me, efforts like working on the IAA AI Task Force and chairing the CIA Predictive Modelling Committee are great opportunities to do something new and serve the profession.
*Footnote: A word on AI-generated photos
For amusement, Bernice Lim and Tim Bishop provided an AI-generated photo of themselves (the original image is on the left, while the AI-generated one is on the right). How radical is the difference? In a next article about how actuaries can engage with AI, Seeing Beyond Risk will feature Matt Bartley and me.
Jing Lang, FCIA, is the President of Deepwork Academy and host of the Be Brilliant podcast.
