The impact of data science on enterprise operations is everywhere to be seen. Affordable, high-performance computer power brings data science applications within reach of the commercial mainstream. Digital disciplines once regarded as rarefied specialisms are bursting onto digital transformation agendas across all vertical sectors.
Actuaries, whose professional skills are predicated on the analysis of data to assess and manipulate outcomes, occupy a unique position. Their job roles in many ways anticipate the outcome-shaping capabilities data science provides and puts them in pole position to turn disruptive change to their ultimate advantage.
Similarities between actuaries and data scientists mean that there’s been growing consideration of how – and where – the two skillsets intersect and the effect that will have on actuaries’ career journeys.
The IFoA recognises this intersection. It has already acknowledged its importance to members in a series of events, institutional initiatives and published guidance. And it has identified a need to provide a point of focus for members and actuarial affiliates who realise that data science will – to some extent – shape our profession as we move into the 2020s.
This content is designed to meet members’ information requirement with respect to data science and its resonance for actuaries and actuarial practice.
Its aim is to bring together the IFoA’s multifarious work and activities in the data science disciplines and highlight the Institute’s understanding of the opportunities data science presents for actuaries to extend their professional status and societal responsibilities.
What is data science?
For such a transformative concept, data science is often not well defined or understood. This does not seem to inhibit its influence – IFoA President John Taylor has described it as necessarily a ‘dynamic and evolving term’.
However, a working definition for data science (rather than of data science) will prove helpful as a start point.
‘Data science’ describes a broad, multidisciplinary field that uses scientific methods, processes, algorithms and systems to extract knowledge and insights from structured and unstructured data. It employs techniques drawn from many fields within the context of mathematics, statistics, computer science, and information science.
The ‘data sciences’ include, or associate with, more focused disciplines: Big Data, Data Analytics, Data Analysis, Data Mining, Artificial Intelligence, Machine Learning, Robotics, Data Visualisation, Predictive Modelling, and Deep Learning.
Data science skills combine domain expertise, programming, software tools and knowledge of mathematics and statistics, to extract desired insights from data – insights that can be translated into tangible and quantifiable business value, such as market intelligence, risk assessment, and executive decision-support.
More on data science:
“Data science is very empowering for actuaries: it gives them a platform to move into wider fields.”
John Taylor, President, The Institute and Faculty of Actuaries
In February 2018, the IFoA launched a virtual conference on the topic of data science. It was open to members globally to share knowledge and discuss developments and techniques within the discipline.
The conference demonstrated how actuaries can enhance their current knowledge, or move more fully into the world of data science. It offered a platform for members and students to learn more about the subject in sessions curated by leading experts.
Topics discussed included Big Data analytics, Artificial Intelligence, Machine Learning, predictive modelling, data visualisation, neural networks, and coding.
President Taylor said: “What makes the contribution of the profession uniquely valuable to the emerging field of data science is our public interest mission, our grasp of the statistical underpinnings of data science, and our ability to interpret and construct value from data.”
President Taylor believes that the scope of the IFoA’s engagement with data science “demonstrates the way in which the actuarial profession is already taking the lead in addressing the issues that will shape our global society, while deploying our skills and knowledge to safeguard the public interest.”
These issues include ethical questions around how data science changes the way an individual’s risk profile is assessed, through to ensuring that ‘data science’ – in each of its applications* – is well used and understood wherever it’s practiced.
Data Science Q&As:
- Data science: Q&A with IFoA President John Taylor
- Data Science: Q&A with IFoA Member Lisa Balboa
- Data Science: Q&A with IFoA Member Patrick Lee
Where does data science and actuary meet?
Comparisons between actuarial science and data science often use the preposition ‘versus’, although the disciplines are not in necessarily in opposition to, or in contention with, each other.
Indeed, they have much in common, and practitioner skills are increasingly transferable between the two fields.
Usually annexed to the enterprise IT function, data science uses scientific methods, processes, algorithms, and other software tools, to derive insights and knowledge from structured and unstructured data sets.
It brings together established disciplines like statistics, data mining, and data analytics, with emergent tech like Artificial Intelligence (AI) and Machine Learning. Its capability to process a broad range of data sets, and not be constrained to specific types or formats, is generally acknowledged as a key strength.
Actuarial science is a more formalised discipline that categorises interrelated fields, such as computer science, economics, finance, mathematics, probability theory, and statistics.
It’s applied to defined mathematical and statistical methods to assess risk, primarily in the BFSI (banking, financial services, insurance) sectors. Actuarial science is, however, also applied in other industries and professions.
Experts in data science and actuarial science use many of the same techniques when analysing data to make informed forecasts about risk probabilities. These include data visualisation, pattern recognition, and statistics. Three examples of where the two disciplines align are in their approach to data, methodology, and software development.
The primary commonality between data science and actuarial science is their respective appetites for data. The more data they have, the better their analyses turn out.
The IFoA already provides data science collateral for members that ranges from:
- Work by the IFoA Data Science MIG (member interest group)
- Lifelong learning opportunities
- What are the career opportunities in data science for actuaries?
- Data science wiki
“Immersed in business context, actuaries are well-placed to utilise the insights data scientists can generate.”
John Taylor, President, The Institute and Faculty of Actuaries
It’s sometimes asserted that actuarial science specialises in structured data, while data science is most adept working with unstructured data. However, the insurance sector has long recognised the importance of unstructured data.
DataSpace cites the importance of vehicle telematics for data scientists and actuaries alike. For example, telematics provides data that enables data science optimise performance of autonomous cars, while insurance providers have identified an opportunity to use telematics data to adjust premiums based on driver behaviour (‘usage-based insurance’).
Actuarial science’s problem-solving methodology is driven by the standardisation of its analyses, while data science focuses on getting the prediction correct through a variety of methods. Mastery of actuarial methods is largely based on qualified skills and certified learning. Data science practitioners may work without mandatory qualifications or certifications, although this anomaly is changing.
Actuarial science operates on pre-developed software development platforms, and generally uses standard commercial tools and applications. Data science differs in that it routinely develops new algorithms for specific use-cases. Data scientists are, perforce, likely more ‘programming savvy’ than the actuarial scientist.
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This KSS talk will explore how the Actuarial Profession is changing by looking at the past, the current and the future; considering what will be the key issues impacting the Profession over the next 20 years and why this will be different from today. Why will areas like data science be important? What does the future hold for reserved roles? What impact will the Profession have on other professionals? And much more!
Presenter Jon Spain
This event is now fully booked.
Please click here to register for the wait list.
Join us and leading actuarial employers at our free Count Me In STEM careers event in Edinburgh organised by the IFoA.
Find out more about a range of rewarding careers in actuarial science and how we are supporting and promoting diversity in the profession.
Three actuaries – and CEOs – discuss their views on how the business world is changing and what that might mean for actuaries in the future.
This will be a panel discussion involving speakers from the IFoA, Task Force on Climate-related Financial Disclosures and PRMIA comparing the practical approaches taken by banks, insurers and firms as they try to manage these risks.
Have you ever thought about working in wider fields? Would you like to play a role in the fight against climate change to make the planet better?
It can be difficult to do this - but seeing an example you can follow can make it more realistic. In this ‘green’ case study a template is outlined to show how actuaries can apply their skills more broadly - and in doing so, to make a difference.
The Institute and Faculty of Actuaries and the Royal Statistical Society have worked together to develop joint ethics guidance on data science. This is the culmination of an 18 month programme of practitioner led work.
Join us for the launch of this new guidance, with a high-level panel discussion which will explore the role of data science practitioners and professional bodies in data ethics.
The SIAS Annual General Meeting will commence at 5.45pm and be followed by a talk given by the well known economist and author, Steve Keen, at 6pm. A live webinar will be available.
Join us and leading actuarial employers at our free Count Me In STEM careers event in London organised by the IFoA.
The Government Actuary’s Department (GAD) marks its centenary this year. George Russell, formerly Deputy Government Actuary, who currently heads up GAD’s Edinburgh office, leading on GAD support to the devolved administrations in Scotland and Northern Ireland, will outline GAD’s development over that period and its range of work today. Having just “celebrated” his 25th anniversary of joining GAD, George will also reflect on some of the challenges and opportunities of advising at the interface of the actuarial and the political worlds.
This is a co-branded KSS/Heriot-Watt University event. Equity release mortgages (ERMs), also called lifetime mortgages, have played an increasing role in generating income for retired home-owners. As new liquidity rules have reduced the supply of bank lending, so insurers have stepped in, encouraged by generous regulatory treatment for annuity writers.
Presenter Simon Louw
The Sessional Meeting is now fully booked.
Please click here to register on the waiting list.
The Institute and Faculty of Actuaries is running a sessional meeting on autonomous vehicles on 28th October. The session will showcase the work of the IFoA “Autonomous Vehicles” working party alongside a number of expert external presenters.
ARC Event: Beyond Proportional Hazards: Statistical methods for assessment of the impact of medical advances and health interventions on longevity and population projections.
This workshop is being delivered by the Actuarial Research Centre’s (ARC) ‘Big Health and Actuarial Data’ Research Programme.
This evening will feature two new cases studies that highlight the implications for insurers of issues impacting on health and mortality for life, pensions, and health and care products; Impactability modelling: a worked example in Type II diabetes presented by Josephine Robertson, and Seasonal Mortality in England and Wales 1993-2016 presented by Mary Hall, Dublin City University.
The MRSC is responsible for guiding the profession’s research in the areas of longevity, mortality and morbidity such that it is recognised as a thought leader in this area. It has recently been reviewing what the priorities and have identified 6 areas that we believe are the most important areas of research that should be the current focus and these are:
The theme of this year’s annual briefing is: Lifelong Learning – providing continuous development for our members.
This event is primarily for volunteer CPD Co-ordinators, who attend to represent their organisation. CPD Co-ordinators play a key role in effective engagement between organisations who employ our members and the Institute and Faculty of Actuaries (IFOA).
In conjunction with the Scottish Board and supporting the IFoA’s focus on data science.
The IFoA’s Scottish Board have arranged for UK pioneer in Computer Vision and Machine Intelligence, Professor Andrew Blake to speak to delegates on the subject of AI in Autonomous driving. This lecture will focus on safety-critical operation and the computation of risk.
Join us for this brand new seminar that brings together our Current Issues in Pensions, Pensions and the Law, and Investment for Pension Actuaries events. The seminar builds on the IFoA’s Annual Pension Conference with sessions covering CDC, TPR’s code of practice, investments, legal updates and Professional Skills Training with a focus on interactive discussion throughout.
The National Records of Scotland (NRS) collects, preserves and produces information about Scotland's people and history to inform current and future generations - work that underpins the fabric of Scottish society and tells the story of our nation. This KSS talk will explore the following and other areas impacting Scotland’s changing population, and assess the potential implications of the changes:
- population statistics
- life expectancy
- changes in age structure
- birth and death rates, including causes of death statistics.
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.
Presenter Gaurang Mehta
The workshop will give participants detailed insights into how a large and detailed dataset can be used to assess levels of mortality inequality in England, using a number of novel statistical methods. We will also address the question: are regional variations in mortality real or imaginary?
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.
Watch the live stream of this year's Autumn Lecture with guest speaker Rt Hon Nicky Morgan MP.
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).
Presenter Russell Osman, FIA
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.
We are delighted to announce the launch of the findings from our ARC funded Behavioural Finance research with a special evening event at Staple Inn on Tuesday 14th January 2020. Entitled Behavioural Aspects of Institutional Investment Decision-Making, this research programme is being delivered by City, University of London, Leeds University Business School and Ipsos.
This event is now full. Please register for the waiting list.
Presenters: Rebecca Deegan, Head of Policy, IFoA, and Faye Alessandrello, Policy Manager, IFoA
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.
Presenter: Mark Pibworth
Presented By: Rebecca Deegan, Head of Policy, IFoA, and Catherine Burtle, Senior Policy Analyst, IFoA