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Data science: Q&A with IFoA President John Taylor

John Taylor, new President of the IFoA, shares his views on the ways in which the actuarial world is being affected by the inexorable rise of data science.

John TaylorIt’s been suggested that, in their approach to Big Data, actuaries are ‘the original data scientists’. Could you explain that connection? What, in their essentials, do actuaries have in common with data scientists?

When I heard actuaries described as the original data scientists, I really liked the phrase. It captures the essence of what actuaries have been doing for centuries. If you look back at the pioneers of the profession, they were analysing what at the time were large data sets to do with longevity, trying to find the truth and insight in them, and then extrapolate into the future. Then if you look back to just a decade or two, actuaries did similar things around Stochastic asset models – and, again, trying to make projections into the future. And that’s the essence of what data scientists try to do. The tools and technology used have moved on massively, of course, but the fundamentals of trying to extract truth and insight from data, and then using that to infer something about the future, are the same.

Why are actuaries so well placed to explain data science? And can data scientists learn from actuarial practice?

What actuaries bring is a sense of business context, commercial value, and of what it all means for their client – be it a pension scheme, an insurance company, or indeed the ultimate end-user, the consumer. Having that sense of business context, as an overlay to the raw insights that a data scientist may bring, makes those insights more useable and valuable to the client.

The IFoA plans to launch a data science certification. What will be its scope and what will members who undertake it gain?

There’s an appetite among IFoA members to learn more about data science, and so we are about to launch a certificate in data science, available to all members of the actuarial profession. They’ll be able to choose from a set of five modules that cover disciplines such as data visualisation, Artificial Intelligence and Machine Learning. They can pick and choose from them, and those who complete the set of five will be awarded the certificate. From this, actuaries will get a much greater appreciation of the art of the possible in data science. It may not make them data science practitioners per se, but it will enable those certified to work more closely with data scientists. And the certificate will also have a currency with employers in evidencing the additional learning that actuaries have undertaken.

The traditional fields for actuaries have been insurance and pensions. Now actuaries are appearing in agriculture, healthcare, climate change initiatives, and even ride-sharing app development. How does this reflect the way data science is developing?

Data science is very empowering for actuaries. Not only does it bestow the ability to re-engineer what they do in traditional fields, but it gives them a platform to move into wider fields. The underlying driver behind this is that other industries, that haven’t been so accustomed to dealing with data, are now being deluged with it. And they don’t really quite appreciate how to derive value from it. Bringing-in a profession that’s long been expert in dealing with that data, and getting insight out of it, is a tremendous opportunity for those industries – even some of the creative industries like advertising. The ‘Mad Men’ are being replaced by the ‘Math Men’, as advertising becomes much more data-driven about defining individual segments and offering bespoke propositions – and actuaries are getting involved in that kind of innovation.

You have spoken about the ethical implications of data science. What are the key considerations around this question, where actuaries can bring thought leadership?

Developments in data science are throwing up some challenging ethical issues. That does create an opportunity for a profession with an established code of ethics to step in and try and make a difference. The IFoA is also working with the Royal Statistical Society to bring forward a code of ethics around data science. And we’re working with government and policy-makers to make sure that the evolving policy keeps up-to-date with data science.

‘Data science’ is often referred to in public debate, but definitions of what ‘data science’ actually means seem to change continually. How well understood do you feel the term is?

I’m not sure that ‘data science’ is a terribly well understood phrase, in fact. I was speaking to an actuary about my ambitions for the IFoA to do more in the field of data science, and his retort was ‘That’s great – but we also need to be doing more on Artificial Intelligence’. Well, actually, I was using a definition of data science that encompasses AI, so that demonstrates that there’s a degree of confusion around the term. It’s such a dynamic field that as soon as you try and pin down what it is today, it’s changed tomorrow. So, I’m fairly relaxed that it’s dynamic and evolving term.

What do you believe makes the contribution of the actuarial profession so uniquely valuable to the emergent field of data science?

As professionals immersed in business context, and in understanding the impact companies can have with end-users, actuaries are well-placed to add value and utilises the insights data scientists can generate. Let me give you a couple of examples. I know an actuary who works in insurance, and who is looking at new ways to deliver service to existing clients, and that’s about understanding individual customers at a very small level of detail, and looking for trigger points when they might be receptive to new service offerings. This approach is really transforming the take-up rate for services. Second, I heard a compelling example at a conference, where actuaries working in the field of marketing were taking huge amounts of data from social media, and again, trying to infer which customer segments might be suitable for which offerings – and at what times – and then making them available in almost a test-and-learn environment.

How important will collaboration between actuaries and data scientists be, going forward?

Collaboration is going to be vital both for the IFoA and for individual actuaries. Now, most actuaries will be very familiar to working in multidisciplinary teams, they’ve done that for a long time, but I believe they will increasingly do so alongside data scientists and other technologists. The blend of skills will make those teams very powerful. But it’s important that they are able to speak the same language as one another.

What would you say to actuaries who have forebodings that some data science may prove a future threat to their expertise and livelihoods?

It’s very hard to say what the future will look like in, you know, a hundred years’ time. What I can say is that, for the foreseeable future, I think that there’s a  fantastic opportunity for actuaries because of data science. The fact that data is proliferating in not just traditional industry sectors, but everywhere else, means that there’s a kind of crying-out for a profession that can understand the value of data and make predictions based on that understanding. That’s where the essence of the opportunity is for us, I believe. 

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Events calendar

  • Life Conference 2019

    The Convention Centre Dublin, Spencer Dock, North Wall Quay, Dublin 1
    20-22 November 2019
    Fully booked.

    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.

  • KSS event: Climate change, ESG and what it means for Insurers

    PwC Edinburgh, Atria 1, 144 Morrison St, Edinburgh
    2 December 2019

    Spaces available

    Speaker: Pallavi Konwar

    Pallavi has a background in banking and asset management as well as within government. She started her career at Wall Street in New York, where she worked for Citigroup on mortgage securitisations and collateral analysis. Before joining PwC, she worked within the Infrastructure UK team at HM Treasury. where she was responsible for contributing to the National Infrastructure Plan and reporting on the performance and delivery of nationally significant infrastructure projects.

  • Autumn Lecture 2019, London - Dr Kay Swinburne

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

    Spaces available

    We are delighted to announce that Dr Kay Swinburne will deliver this year’s lecture, "It’s not all about the numbers – regulatory challenges for UK financial services post-Brexit"

  • SIAS Event: Discount Rates are Flawed

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    3 December 2019

    Spaces available

    This talk will be given by Jon Spain who, as far back as 1983, has been working independently, trying to bring “long-term” back to UK actuarial thinking. His current focus is on discount rates (see discrate.com).

  • A Holistic Study into Cash flow Driven Investment

    Staple Inn, 4 High Holborn, Holborn, London WC1V 6DR, UK
    4 December 2019

    Spaces available

    Given that Cashflow Driven Investment strategy has attracted growing interests from pension funds and insurers at the backdrop of current market conditions and clients’ circumstances, the objective of this event is to gather thought leaders from asset managers, banks and insurers to offer attendees their perspectives and insights on main aspects of consideration when adopting this strategy.

  • Your Actuarial Career: Managing Career Breaks

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    5 December 2019

    Spaces available

    Maternity or paternity leave, sabbaticals to study or travel, managing care responsibilities or escaping unemployment – Join Chika Aghadiuno and a panel of IFoA guests including Liz Dimmock, Founder & CEO of Women Ahead (International), and Lee Faulkner, Financial Wellbeing Actuary, First Actuarial, to explore the issues around career breaks from the perspective of an employee and an employer.

  • Sessional Meeting - Silent Cyber Assessment Framework

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

    Spaces available

    The (re)insurance industry is faced with a growing risk related to the development of information technology (IT). This growth is creating an increasingly digitally interconnected world with more and more dependence being placed on IT systems to manage processes. Note: Registration is from 17.30 in time for the sessional to begin at 18.00.

  • CPD Member Event in Shanghai, China

    Function Room, F39, S1 Fuson Group, the Bund Finance Centre, No.600 Zhongshang East 2nd Road, Huangpu District, Shanghai Chinese address:BFC外滩国际金融金融中心,S1复星集团,39层报告厅,上海中山东二路600号
    9 December 2019

    Spaces available

    The IFoA’s President-elect Tan Suee Chieh will visit Shanghai. We will host CPD and Awards Presenting event on Monday 9 December 2019. The event is part of Mr Tan’s first presidential trip to China.

  • Professional Skills Training - London (10 December 2019)

    Staple Inn, High Holborn, London WC1V 7QJ  
    10 December 2019

    Spaces available

    This event will be of interest to students and recently qualified actuaries.

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020.  The content and discussion at this session is particularly tailored to actuarial students and newly qualified actuaries working in any area and the format is interactive, so you should come along prepared to take part in the discussions with your peers.

  • IFoA Joint Member Event with the Sunshine Insurance Group, Beijing China

    Room TBC, Kuntai International Plaza, No.12, Chaowai Street, Chaoyang District, Beijing 地址:会议室待定,北京市朝阳区朝外大街乙12号1号楼昆泰国际大厦
    12 December 2019

    Spaces available

    The IFoA’s President-elect Tan Suee Chieh will visit Beijing. We will co-host CPD and Awards Presenting event with the Sunshine Insurance Group on Thursday 12 December 2019. The event is part of Mr Tan’s first presidential trip to China.

  • ARC Sessional Research Event: Drivers of Mortality - Risk Factors and Inequality

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    6 January 2020

    Spaces available

    The authors will focus on a large dataset obtained from the UK’s Office for National Statistics (ONS) and related sources. Data are available at the level of Lower Super Output Areas (LSOAs) – small geographical areas with, typically, 1000-2000 residents and include death counts, exposures and a significant number of socio-economic variables including the index of multiple deprivation (IMD).

  • SIAS Event: My Journey to Data Science, Big Data and AI

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    7 January 2020

    Spaces available

    Patrick Lee is an actuary who has made the transition to working in software architecture and artificial intelligence (AI). He holds Microsoft Professional qualifications in Data Science, Big Data and AI and is currently working towards a DevOps (the automation of software testing and deployment) qualification. He is a member of the IFoA Council and is also President of the Wessex Actuarial Society. He is also a member of the IFoA and the RSS's joint Data Science Focus Group and will talk on the ethical use of AI. 

  • Spaces available

    This presentation covers the detail for how the matching adjustment is calculated. A small simple example spreadsheet is provided and discussed in detail.

    For actuaries wanting to get more involved with the matching adjustment, this is the opportunity to get a detailed description of the mechanics involved. This includes cashflows derisking, PRA tests as well as hypothecation.

    The presentation is provided by James Sharpe who has worked on a number of matching adjustment calculations with several firms.

  • IFoA Volunteer Recognition Reception

    Staple Inn, 4 High Holborn, Holborn, London WC1V 6DR, UK
    15 January 2020

    Spaces available

    As a thank you to all our Institute and Faculty of Actuaries (IFoA) volunteers, you are invited to join us at Staple Inn Hall, for an evening of drinks, canapes and networking, in London.

    IFoA President, John Taylor, will be attending and will make a speech

    If you support the IFoA as a volunteer (member or non-member), or in any other role, and you are going to be in London on 15 January, please book your place and join us at this reception.

     

  • Professional Skills Training - London (16 January 2020)

    Staple Inn, High Holborn, London WC1V 7QJ
    16 January 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Sessional Meeting - Operational Risk Dependencies

    Royal College of Physicians of Edinburgh 9 Queen St Edinburgh EH2 1JQ
    20 January 2020

    Spaces available

    The Operational Risk Working Party aims to assist actuaries and others in the modelling and management of operational risk. One of the key challenges in modelling operational risk is the modelling of dependencies between operational risks, and between operational and non-operational risks such as market, credit and insurance risk. Their paper seeks to assist in this regard, and help develop good practice in setting assumptions and modelling operational risk dependencies. 

  • Professional Skills Training - Edinburgh (23 January 2020)

    IFoA (Edinburgh), Level 2, Exchange Crescent 7 Conference Square Edinburgh EH3 8RA
    23 January 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • KSS event in Glasgow: Public Sector Pensions

    Hymans Robertson, Glasgow 20 Waterloo St, Glasgow
    30 January 2020

    Spaces available

    – the unappreciated key assumption, the resulting unsustainable promises, the unmanaged risk and the unrecognised debt? 

    Speaker: Allan Martin

    Come to your local KSS meeting to discover your future tax paying liability, the massive intergenerational transfer you are making and consider your professional public interest undertaking.

  • ARC Sessional Research Event

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    3 February 2020

    Spaces available

    This sessional will be delivered by members of the research team working on the ARC “Big Health & Actuarial Data’ research programme, led by Professor Elena Kulinskaya (University of East Anglia).

  • Professional Skills Training - London (11 February 2020)

    Staple Inn, High Holborn, London WC1V 7QJ         
    11 February 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Sessional: Impact of E-cigarettes Working Party

    Royal College of Physicians, 9 Queen St, Edinburgh EH2 1JQ
    24 February 2020

    Spaces available

    This sessional meeting will be of direct interest to actuaries and others working in the in the Health and Care, Life or Pensions sectors or indeed actuaries with an interest in morbidity or mortality. Note: Registration is from 17.30 in time for the sessional to begin at 18.00.

  • Professional Skills Training - Edinburgh (25 February 2020)

    IFoA (Edinburgh), Level 2, Exchange Crescent 7 Conference Square Edinburgh EH3 8RA
    25 February 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • IFoA Asia Conference 2020, Kuala Lumpur

    CCEC Nexus, 7, Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia
    24-25 June 2020
    Spaces available

    The sixth annual Asia Conference once again offers a prestigious line-up of home and international speakers discussing the insurance and financial industry’s innovation and change in Asia. This year's conference in Kuala Lumpur will be hosted by Tan Suee Chieh, IFoA’s first Asian President. He will also make his Presidential address at this conference and will expand on the important elements of IFoA’s new strategy. 

    Additionally, this landmark conference will showcase how the IFoA is reinventing itself to support its members to succeed and thrive in a digital age, within traditional businesses and beyond, as a global organisation. 

    No tot be missed by international industry players, opinion formers, academic and industry leaders, actuaries and non-actuaries.