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Can actuaries be replaced by AI?

Posting date: 19 Jun 2024
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In the current quickly evolving digital terrain, the integration of artificial intelligence (AI) and advanced technologies into various industries is reshaping many traditional roles. Actuarial science, long regarded as a cornerstone in the insurance and financial sectors, has recently gained significant attention.

At Legal & General, we're dedicated to staying up to date with innovative technologies, while upholding the expertise and value our actuaries bring to the table. Actuaries play a pivotal role in analysing complex data, assessing risks, and making informed decisions that drive the financial stability of our company and the security of our customers. As the conversation around AI's capabilities continues to grow, it's natural to wonder: Can actuaries be replaced by AI?

Let's look into this question and explore the unique intersection of human expertise and the technological advancement of AI in actuarial science.

Is there a strong future for actuaries?

To address this question, it is important to understand the role of actuaries. Actuaries are highly skilled professionals who use mathematical, statistical, and financial models to evaluate risks and uncertainty in various scenarios. Their insights guide strategic decision-making processes, such as setting insurance premiums, managing investment portfolios, and ensuring regulatory compliance.

Given the increasing complexity of global markets and the evolving nature of risk, the demand for actuaries is likely to stay. We firmly believe that actuaries will continue to play a pivotal role in shaping the future of the insurance and financial sectors. The profession's blend of technical skills, strategic insight, and adaptability ensures a strong and vibrant future for actuaries in an increasingly data-driven world.

Is there a shortage of actuaries?

In recent years, the demand for actuaries has outpaced the supply, leading to a noticeable shortage in the field. This trend is driven by several factors, reflecting the evolving needs of the insurance and financial industries. There are a number of reasons as to why there is a shortage of actuaries:

  • Increased demand for risk management: as businesses face more complex risks, the need for skilled actuaries to assess and manage these risks has grown significantly.
  • Technological advancements: while technology, including AI, has enhanced actuarial work by automating routine tasks, it has also increased the demand for actuaries who can leverage these advanced tools effectively. 

At Legal & General, we recognise actuaries' crucial role in our success. We're committed to nurturing talent and providing opportunities for professional growth to address this shortage and ensure the continued excellence of our actuarial team.

Key skills of an Actuary in 2024

While AI technologies have made significant advancements in data processing, replacing actuaries entirely remains a complex proposition. Actuarial science encompasses more than just data analysis; it requires critical thinking, judgment, and a deep understanding of business dynamics and regulatory frameworks. Here are the key examples of those key skills:

1. Mathematical proficiency: actuaries possess advanced mathematical skills, allowing them to develop and analyse complex models that assess risk and predict future outcomes.

2. Data analysis: with expertise in data analysis techniques, actuaries interpret vast amounts of data to derive meaningful insights and inform strategic business decisions.

3. Business acumen: actuaries understand the broader financial landscape and the implications of their analyses on business operations, profitability, and long-term sustainability.

4. Communication skills: effective communication is essential for actuaries to convey complex findings to stakeholders, including executives, regulators, and clients, in a clear and understandable manner.

Actuary and AI automated tasks

AI can augment the work of actuaries by automating routine tasks, streamlining processes, and providing insights from vast datasets. However, the human element, such as interpreting nuanced data patterns, exercising judgment in uncertain situations, and considering ethical implications, remains indispensable.

At Legal & General, we embrace technological innovation while recognising the irreplaceable value of human expertise. Our approach integrates AI and automation to enhance the efficiency and accuracy of actuarial processes, empowering our actuaries to focus on higher-level strategic initiatives and delivering exceptional value to our stakeholders.

The future of actuarial science at Legal & General

Will actuaries be replaced by AI? It is very unlikely. At Legal and General we see value in having a human touch to our work. As leaders in the insurance and financial services industry, we are committed to creating a culture of inclusivity, diversity, innovation, and continuous learning. We provide our actuaries with access to resources, training programs, and professional development opportunities to thrive in an increasingly digital landscape. One example of how we are doing this is by exploring the use of AI to transform benefit specification data into the format required for our models.

By harnessing the synergies between human intelligence and AI capabilities, we're evolving the role of actuaries and unlocking new possibilities for driving business growth, mitigating risks, and delivering unparalleled value to our customers. AI is a valuable tool that can enhance our work.

The true value of actuarial work lies in judgment and assessment, not just in the results produced. By leveraging AI, our actuaries can focus more on using their expertise and judgment, while spending less time on routine tasks.

Join us on this journey of innovation, growth and impact

Are you passionate about leveraging data-driven insights to shape the future of the finance industry? At Legal & General, we’re looking for actuaries to join us on this journey of innovation, growth, and impact. Together, let’s embrace the transformative opportunities that define actuarial science. 

Explore exciting actuarial career opportunities at Legal & General today and be part of a dynamic team passionate about innovation and excellence.

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