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As advanced analytics continue to be used to automate decision-making along the insurance value chain, questions have been raised about the relation of data science to actuarial science, and whether actuaries might be dispensable to some degree. However, like underwriters, actuaries are moving with the times to reinvent the application of the discipline to suit modern demands. In that vein, the Society of Actuaries (SOA; Schaumburg, Ill.) recently introduced new “micro-credentials” and curriculum changes to ensure actuaries are positioned to meet insurers’ evolving needs for actuarial training, with an emphasis the need for increased data analytics coverage and new “soft skills” training. The SOA says it made these changes to address the growing trends of micro credentials and modularization, which both employers and candidates are looking for in today’s market. To better understand the details and reasoning behind the new micro-credentials and changes to training, IIR corresponded with Greg Heidrich, the organization’s CEO, and Roy Goldman, the Society’s President.
Insurance Innovation Reporter: What is the importance of what the SOA is calling nontechnical, “soft” skills?
Greg Heidrich, Chief Executive Officer, SOA: It’s no secret that the industry has benefitted from the growth of AI and machine learning, but with that comes a greater complexity and the need for human judgment to interpret and make sense of the data these technologies produce. Paradoxically, the more information we gain from pure data analysis, the more we seem to need human judgment and intervention to guide us in how to use the data! That’s why soft skills are so important: we can glean greater insights by complementing this data with skills like contextual understanding, prior experience, emotional intelligence, adaptability, nimbleness and intuition.”
What well-trained actuaries, like those we’re developing at the SOA, bring is the understanding of business and societal context, intuition, and well-informed business judgement to effectively train the algorithms, challenge outputs, and translate results into actionable insights. The combination of these soft skills with quantitative skills, insurance and regulatory knowledge, and professional standards are what make actuaries unique. The Society of Actuaries’ training, both now and as we implement our new educational improvements, provides the world’s leading development of those skills for actuaries.
IIR: How can actuaries reassert their value to the insurance enterprise as AI-driven automation and other aspects of advanced data analytics gain ground?
Roy Goldman, President, SOA: The benefits of automation and AI are widely known, like driving down the cost of sourcing data and generating predictions, but many professions make the mistake of trying to compete head on with the data. Those who can effectively complement these cost-saving, data-driven predictions will be much more valuable.
In many ways, actuaries are already developing this higher-level skillset of flexibility and adaptability, and utilizing their superior business judgement in learning these new techniques for dealing with these more-complex models. The SOA’s new pathway components will elevate the actuarial landscape even further, with a higher-level skillset that demonstrates a new level of achievement to employers, co-workers and professional networks. For example, we’re adding an advanced predictive analytics curriculum and learning, tested by a rigorous exam, to our program to ensure that all actuaries coming through our pathways have these skills. This is in addition to the training actuaries receive in probability and statistics, financial mathematics, and modeling including bias training.”
IIR: To put the question bluntly, what is the value of what actuaries do and the continuing importance of the actuarial profession?
GH: Actuaries have been around for as long as there have been insurance companies. We’re leading professionals in the measurement and management of risk, and providing expert advice and relevant solutions for financial, business and societal challenges. SOA-trained actuaries combine strong knowledge of insurance, retirement, and health and welfare benefit systems issues with a deep appreciation for how to assess, measure, and manage financial and other risks and strong data analytic skills. It’s a unique combination of skills that’s really valuable today.
Our role has now grown into the work of data analytics and big data projects, and that’s why the SOA made changes to our curriculum—to meet employer and market demand for actuarial training that balances quantitative training with soft skills like adaptability and emotional intelligence.
IIR: How would describe the Society of Actuaries’ continuing commitment to the insurance industry?
GH: Actuarial science and the insurance industry are deeply connected, and the SOA is proud to provide holistic training to ensure actuaries’ unique skillset exceeds insurers’ needs. We will continue to foster actuarial leaders who can address current business needs, while simultaneously preparing the next generation of actuaries to address shifting industry demands. This includes the training of members on the techniques of data analytics to provide value and leadership to organizations. Insurance organizations are “data factories” and they depend on having people who really understand the business and its data at the highest levels of the organization. That’s what actuaries do and it’s what we prepare them to do.