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Data science wiki

This is the first iteration of an actuaries’ data science wiki. The aim is to expand, refine and develop this wiki to encompass a knowledge-base that scopes the key terms and essential definitions of disciplines associated with data science practice, that have particular resonance for actuarial professionals.

Data analytics Data analytics is the discipline of analysing data sets to make conclusions about that information. Data analytics techniques can reveal trends and metrics that would otherwise be undiscoverable in massed information. This information can then be used to optimise processes to increase the overall efficiency of business or system operations.

Data analytics is a broad term that encompasses diverse types of data analysis. Any type of information can be subjected to data analytics techniques to gain insight that can be used to achieve improvements. Some of the techniques and processes of data analytics have been automated into mechanical processes and algorithms that work through raw data for subsequent human analysis.

Data analytics methodologies include exploratory data analysis (aims to find patterns and relationships in data), and confirmatory data analysis (applies statistical techniques to determine whether hypotheses about a data set are true or false). EDA is comparable to ‘detective work’, while CDA is comparable to the ‘work of a judge or jury during a court trial’ (John W. Tukey, Exploratory Data Analysis, Pearson, 1977).

Data analytics can also be separated into quantitative data analysis and qualitative data analysis. The former involves analysis of numerical data with quantifiable variables that can be compared or measured statistically. The qualitative approach is more interpretive – it focuses on understanding the content of non-numerical data like text, images, audio and video, including common phrases, themes, and points of view.

Sources: https://www.investopedia.com/terms/d/data-analytics.asp
https://searchdatamanagement.techtarget.com/definition/data-analytics

Data analysis, data analysts Data analysts and actuaries share similarities. They have comparable skill sets, and use mathematics, statistical techniques, and computer knowledge to compile and analyse data, and to report conclusions for business decision-making. The two disciplines differ in the scope of their work and employment settings.

For instance, data analysts work in a broad variety of vertical sectors and industries with multiple types of data. They apply mathematical and statistical techniques to extract, analyse and summarise data. They use spreadsheet and statistical software, work with relational databases, and prepare charts and reports of their findings. Their work transforms large, complicated data sets into usable insights that inform organisational leadership decisions and policies.

Data analysts review information and use the data to help develop recommendations. They do not specifically focus on risks, but may help determine appropriate business or financial decisions that will benefit a company.

Sources: https://work.chron.com/data-analyst-vs-actuary-16473.html
https://study.com/articles/difference_between_actuary_data_analyst.html

Data visualisation The main goal of data visualisation is to communicate information clearly and effectively through graphical means. and by maintaining a library of data visualisation techniques. The IFoA Data Visualisation Working Party was established in 2017. Its vision is that data visualisation for actuaries should represent:

  • An understanding of which visualisations work well for different purposes.
  • Domain-specific examples of helpful practice.
  • An understanding of how to produce the visualisations, including tools and techniques.
  • An understanding of the principles of developing and improving data visualisations.
  • Awareness of caveats that should be associated with data visualisations.

Sources: https://www.actuaries.org.uk/news-and-insights/news/data-visualisation-techniques-vision-actuaries

Machine Learning Machine Learning is a discipline that uses study of algorithms and statistical models, as used by computer systems, to perform specific tasks without use of explicit instructions: Machine Learning instead relies on patterns and inference. It is generally regarded as a subset of Artificial Intelligence.

The question of what Machine Learning could bring to actuarial work is something of a contentious issue within the insurance sector. Some have speculated on Machine Learning’s capacity to replace manual actuarial work, and therefore reduce insurers’ requirement for human actuaries. Other argue that data science-savvy actuaries could turn knowledge of Machine Learning into a useful asset in their skills offering.

Sources: https://www.actuaries.org.uk/documents/practical-application-machine-learning-within-actuarial-work

Predictive modelling Predictive modelling involves the use of data to forecast events. It relies on the capture of relationships between explanatory variables and the predicted variables from past occurrences, and the exploitation of this to predict future outcomes. The forecasting of future financial events is a core actuarial skill. Actuaries routinely apply predictive-modelling techniques in insurance and other risk-management applications.

Sources: https://www.cambridge.org/us/academic/subjects/statistics-probability/statistics-econometrics-finance-and-insurance/predictive-modeling-applications-actuarial-science-volume-1

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Events calendar

  • 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
    25 July 2019

    Spaces available

    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

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    3 September 2019 - 4 September 2019

    Spaces available

    An introductory session to help you get ahead with climate change.

    • Science, terminology and initiatives: handy facts to keep in your back pocket 
    • Getting your point across: how to influence people and avoid common traps and pitfalls
    • Taking action: what are actuaries expected to do...and what are we actually doing?
  • KSS event – The Regulatory Perspective

    Deloitte Saltire Court 20 Castle Terrace Edinburgh EH1 2EG
    5 September 2019

    Spaces available

    This KSS talk, presented by the FCA Head of Department in Scotland, will focus on the following 3 main areas:

    • FCA business plan priorities
    • The future of regulation
    • FCA Engagement in Scotland
  • 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
    Spaces available

    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

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

    Spaces available

    Three actuaries – and CEOs – discuss their views on how the business world is changing and what that might mean for actuaries in the future.

  • 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

    Spaces available

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