Patrick McMahon, Lead Actuarial Consultant for BRUIN Financial, recently hosted a breakfast seminar for leading Actuaries, focusing on the increasing influence of Data Science in Insurance.
Chaired by Dimitrios Velmachos and attended by actuaries from Life and General Insurance, the subject was discussed from a number of angles including deployment, opportunities, challenges and the cross over between the two disciplines.
As expected, it became apparent that GI and Life businesses are at different stages in their relationship with Data Science, acknowledging that the benefits and deployment opportunities have historically been more obvious in GI. With that being said, there were a number of attendees from big Life Insurers who have teams of Data Scientists involved in areas such as Capital, Pricing and Investment. It will be interesting to see in the coming years how Life Insurers get the most out of using data science techniques.
From a General Insurance perspective, it seems that the Lloyd’s market is still relying on more ‘old school’ techniques when it comes to underwriting. One of the big issues that companies face is GDPR and data privacy; including what data is available to them to really maximise the benefit. By contrast, in America, insurers have much more data on customers that helps them make decisions, including the customers’ previous prescription data for example. And the suggestion is that the more data that is available, the more accurate the outcome.
Other issues that have an impact on Actuaries and Data Scientists were data cleanliness, as well as the engineering and validation of data, which is a constantly improving process.
From a recruitment perspective we have noted growing demand for Actuaries with some experience of using R or Python. With that in mind, we would advise Actuaries with an interest in this area to look into online courses, of which there are many, or seek out opportunities to build up their experience in their current role. Interestingly, the IFOA seems to have recognised the potential to marry the two skills and as a result, starting from next year, will be offering a Data Science certificate that will be available online.
BRUIN Financial will be holding a follow up event before the end of the year and would be interested to get your suggestions on topics that Actuaries would be keen to discuss with counterparts. To get in touch with regards to any topic suggestions, please contact Patrick Mcmahon.