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Data Science: Q&A with IFoA Member Lisa Balboa

Lisa Balboa chairs the Regulation & Ethics work stream of the IFoA’s Data Science MIG, and is an active contributor to the IFoA’s Health and Care Practice area. Opinions expressed here are her own.

 

Lisa BalboaTo what extent do actuaries already use data science tools in the healthcare sector? And from your perspective, what are the benefits of establishing transferable skills between data science and actuarial science?

In healthcare, one of the most impressive uses of data science I’ve come across is hospitals using analytics to forecast the number of patients likely to arrive at their doors in the coming week. Hospital managers use these predictions to adjust staffing and other resources to ensure anticipated patient demand is met. This forecasting is particularly useful in times of peak demand, such as ensuring hospitals have the capacity to cope in a severe winter flu outbreak.

But these models are only being used in a few isolated hospitals. As actuaries, we’re in a good position to draw on our understanding of these data science techniques to help scale-up and encourage more widespread adoption of predictive healthcare tools. We can also use our strong skills of communicating technical information to non-technical stakeholders. This supports healthcare decision-makers to understand, and react appropriately, to these dynamic healthcare forecasts.

What kind of framework must be in place for data to be readily exchangeable across health system stakeholders? And what potential exists to scale-up opportunities in using this data for predictive healthcare demand modelling?

Having common data storage and programming languages is vital if we’re to succeed in embedding predictive healthcare demand modelling right across the health system. Initiatives, such as the FHIR (Fast Healthcare Interoperability Resources) standard, are a great first step in moving towards a system where data can be exchanged across the health service. It’s important to have robust data privacy and data governance frameworks that empower individuals to engage with their health and lifestyle data.

I envisage a personal health record system that places individuals at the centre of their data. The personal health record would allow each person to take ownership of their data and decide whether and when to share this data with their medical team. Individuals could also give consent for the de-identification of their data to be fed into medical research and healthcare resource management activities.

As adoption of AI-based data science tools in healthcare increases, how important is it to ensure that algorithms can be embedded into society in a fair, ethical way, to identify and mitigate possible algorithmic biases? And what can actuaries contribute to public debate around this topic?

The adoption of AI-based data science tools is on the rise throughout pretty much all aspects of our daily lives. With algorithmic decision-making becoming so pervasive, it’s important to ensure we embed this technology into society in a fair and ethical way. Actuaries have much to offer in this area. From a technical standpoint, we can help to identify and mitigate biases that are present in training datasets being used by the models. We also have a lot to contribute when it comes to developing these algorithms. Many such algorithms are designed to maximise resource efficiency. But we should be going further to consider fairness as part of the resource allocation process.

In a field with such a rapid pace of development, ethical adoption of new data science techniques is critical. Particularly as regulation can often take time to catch-up to technological change. As actuaries, we’re well-situated to engage directly with the public and other stakeholders, to help them to understand how their data is being used by these algorithms. We can help to ensure that algorithmic decision-making is transparent and explainable. This will give the public greater opportunity to voice their opinions on what they believe is a fair and ethical way for this pervasive technology to be embedded into our lives. 

What career opportunities for actuaries to work alongside data science specialists in the healthcare sector do you see – now and going forward?

The knowledge and expertise that data science experts bring when analysing large volumes of specialised medical data helps to drive developments in healthcare analytics. As actuaries, we are likely to remain highly reliant on data science experts for these deep insights into specialised datasets. Also as actuaries, we are well-placed to work closely with data science specialists by combining these healthcare analytics insights with our strong understanding of business, finance and risk management.

This could lead to growing career opportunities for actuaries to work alongside data science experts to build models that optimise financial and medical resources. I’d like to see actuaries and data science specialists collaborating with a wide range of other stakeholders such as healthcare professionals and medical researchers to help develop more effective, personalised treatment pathways and thereby improve health outcomes for society.

With specific reference to insurance, how do you believe data science techniques will prove of the greatest value to actuaries working in this field of expertise?

We’ve only just begun to scratch the surface in terms of thinking about how to embed the wide array of emerging data science techniques into our actuarial work. There’s tremendous potential to drive value creation by applying these tools to improve our understanding of how risks interact and to optimise insurance portfolios. It’s interesting to consider this question in the context of broader technological change. We’re increasingly seeing consumers adopting wearable tech, mobile apps and other connected devices into their daily lives. This technology is helping people to engage with their health more often and in new ways. With strong data privacy and data governance frameworks in place, there may be the opportunity for actuaries to use data science techniques to gain a better understanding of customers’ key insurance needs.

Using this deeper understanding of the customer, actuaries could champion the development of new insurance products that are more dynamic in their response to individuals’ health and lifestyle needs. With a growing availability of data and with technological developments continuing to raise customer expectations, actuaries will increasingly adopt more advanced data science techniques. I’d like to see us collaborating with a wide range of experts to embed data science into the insurance industry in a way that enhances business value and drives improvements for customers and society.

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  • Implications of 2019 IFRS 17 Exposure Draft

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    24 July 2019

    Fully booked.

    The International Accounting Standards Board (IASB) recently published an Exposure Draft (ED) of limited changes to its insurance contracts standard IFRS 17, effective date 2022.

  • Insurance Investment Roundtable with the IFoA & PRA - 25 July 2019

    EY Offices 1 More London Place London, SE1 2AF
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    The IFoA hosts regular roundtable meetings with the PRA on best practice in insurance investment and the application of the Prudent Person Principle, which governs insurance investment under Solvency II.

  • SIAS Event: Climate Zero to Climate Hero

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    5 September 2019

    Spaces available

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  • Sessional Research Event - Risk Margin Working Party

    Staple Inn Hall, High Holborn London, WC1V 7QJ
    9 September 2019

    Spaces available

    For life insurers in the UK, the risk margin is one of the most controversial aspects of the Solvency II regime. Following its implementation, the risk margin came under considerable criticism for being too large and too sensitive to interest rate movements. These criticisms are particularly valid for annuity business – such business is of great significance to the national system for retirement provision. This criticism has led to political interest, and the risk margin was a major element of the Treasury Committee inquiry into Solvency II.

  • GIRO Conference 2019

    EICC, The Exchange, 150 Morrison St, Edinburgh EH3 8EE
    24-26 September 2019
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    GIRO is attended annually by over 800 delegates and speakers who are keen to discuss key topics such as Pricing, Reserving, Modelling and the future of the insurance industry. GIRO 2018 was a huge success and we have opened bookings early for what we hope will be another brilliant conference at the EICC in Edinburgh this year. 

     

  • The Future of the Actuarial Profession

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    3 October 2019

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  • Life Conference 2019

    The Convention Centre Dublin, Spencer Dock, North Wall Quay, Dublin 1
    20-22 November 2019
    Spaces available

    The Life Conference is the premier event for professionals interested in life insurance.  Offering a wide range of workshops and plenary sessions it’s the perfect opportunity to discover what’s hot and current in life insurance ensuring you get up to date on the latest thinking and innovation whilst meeting and exchanging ideas with a broad range of professionals.

  • Autumn Lecture 2019, London - Rt Hon Nicky Morgan MP

    Lincoln's Inn The Treasury Office, London WC2A 3TL
    2 December 2019

    Fully booked.

    The IFoA is pleased to announce that this year’s Autumn Lecture will feature the Rt Hon Nicky Morgan MP as its guest speaker.  Nicky has previously served as Financial Secretary to the Treasury and Minister for Women. She now chairs the Treasury Select Committee whose remit is to examine the expenditure, administration and policy of HM Treasury, along with all of its agencies and associated bodies.

  • Autumn Lecture 2019: Live Streaming

    Webinar 
    2 December 2019

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    Watch the live stream of this year's Autumn Lecture with guest speaker Rt Hon Nicky Morgan MP.