A brief article from KPMG around the automation of Actuarial. I think this piece touches on some common misconceptions that are slowly being addressed. The more parts of different businesses I talk to, the more I am beginning to understand a lot of why people label actuaries " the actuaries".
This article considers how the wider business can interact with an actuarial function that isn't necessarily made up of human actuaries. I do not believe that the actuarial function can be fully automated in the short term, but I also do not believe that actuaries in their current capacity are capable of providing the insight which they could do if they embraced new technology!
I think a key challenge for any actuarial function is how do they add the most value to the wider business whilst being efficient in their timeliness and spending. By embracing technological change I believe this will become more than possible.
The whole black box illusion is an interesting one and one which could be detrimental to the function, but by embracing change one step at a time, be it through automating one line of business or even just the one process like data uploads and reconciliations, the actuarial function of the future could become the actuarial of now and start building new found trust and value!
Automated loss reserving clearly offers P&C insurers efficiency and efficacy gains, but to achieve its full benefits, executives will need to overcome their concerns about the transparency of the so-called `black box' of analytics. While the actuarial function needs to build trust in the tools and more sophisticated analytics capabilities will certainly be required, the bigger barrier will be culture: actuaries need to understand that automation is here to help them become more productive, not to replace them