Since the very beginning of the insurance industry, actuaries have had a major role to play. They are one of the roles which have always been working with data, creating models, pricing and valuation of entities; in short, actuaries are the reason the insurance industry is booming and pubic wealth is safe to an extent. Now, in the modern world that has multiple tools on hand, the analytical aspect of actuaries has become more complex. There is a need for new and improved skill sets, resulting in a need of upskilling.
Technology Leading the Landscape Evolution
Earlier lives were simple. An average human life would revolve around family, work, house, vehicles, the occasional trips and nothing more. So, actuaries had a small pool of data to play with come up with products accordingly which will be beneficial to the customers and insurance companies, both. Today, lives have become complicated as technology has opened many doors.
There are smart devices, wearables, lots of travel, change in lifestyles across the globe, which has resulted in a huge pool of data. Gaining insights from it needs more than software, it needs a shift in the role of actuaries towards developing new strategies and models that account for all the changes. Add to it the stricter governance which has made it more complex, resulting in the need for streamlining processes and data feed to actuaries. All these factors are resulting in a change of role and increase of work for actuariesto provide insurance actuarial services, as some of their skills are now obsolete, while others need to be gained to function today. This will eventually result in increased competition in the actuarial talent pool as companies start looking for talent with modern skills.
Trading Data for Discounts – The World of Data-based Solutions
The internet-driven economy of today, where information is available easily and on the go has resulted in several disruptions till date. There are many examples of today’s leading companies who have risen up by moving on from conventional methods to using technology solutions as a driver for success. The same is true for insurance as well. Insurance companies are delving more into the data which is available in abundance today to gain key insights into the lifestyles of people and hence, are developing customized products and offerings such as reinsurance consulting services for the customers.
Today’s customers want products which are made for them, that revolve around their lives. They do not want anything which is generalized for all. This is how insurance companies are asking users to share their lifestyle and health-based behaviour data from which companies are developing custom solutions for people. They are rewarding good health habits with discounts which has incentivized the process of insurance sales and reinsurance solutions on part of the customer, while also improving stickiness owing to reduced cost of the customer.
Actuaries have played a major role in developing these products and providing actuarial services using key data on hand, thus ensuring optimum risk for the company, as well as allowing them the leeway to offer discounts and incentives to customers. This has helped improve customer retention as well as develop competitive products to gain an advantage over the competition.
Upskilling Towards Programming and Automation
With the need to create custom products for consumers and also account for numerous variables, providing insurance actuarial services is getting more complex with each passing day. There is no other solution than to upskill and use automation tools and programming to automate certain repetitive actuarial activities and processes.
Certain organizations and actuarial societies have launched programs to upskill actuaries to make them more competitive, effective and job-ready in the modern job market. Organizations have also begun hiring actuaries that are qualified and trained in the technical knowledge needed to handle the new landscape and way of work.
It is all a process from taking experts in risk management future uncertainties, and adding the skill of technology to improve the effectiveness of their core skill. All of this changing landscape is owing to the increased uncertainties with global pandemics, fast changing consumer behaviours, digitization and more.
The only way forward is for actuaries to imbibe the new normal and move towards making and keeping themselves relevant in the market. Automation is already a threat to many jobs across the world and it is a fact that everything is being linked to technology, sooner or later. Organizations are also using technology actively when it comes to providing actuarial services and reinsurance solutions.
