The UK Government’s Actuarial Department (GAD) released a report at 16:30 yesterday on AI and machine learning in actuarial work, showing that pricing has been the most popular use case for General and Life Insurance. But with adoption still lagging, could AI’s potential to help insurers model climate change tempt them into action?
Please see below an expert comment from insurance industry veteran Ralph Tucker, current Client Partner at Insurance Technology Consultancy NTT DATA UK&I. The firm has worked with UK insurance firms like Lloyd’s of London, Legal & General, and Ascot Group.
Expert comment:
Ralph Tucker, Client Partner, Insurance, at NTT DATA UK&I, said: “This latest research on the use of Artificial Intelligence and Machine Learning in actuarial work shows us just how much ground is left to cover. It’s not simply about automating tasks or speeding up processes; it’s about reshaping the very nature of actuarial work. Many other global industries are proceeding with AI adoption at pace – so what’s holding back the UK’s insurance industry?
“Pricing is clearly a popular use case, but insurers are under pressure to make much more complex evaluations than that. Think about how climate change will affect not only material loss of property but also morbidity and mortality. Next-generation technology – for instance, the combination of Digital Twins with AI and Machine Learning (ML) – would allow firms to develop accurate predictions and models with limited case history for hitherto unencountered risks. That’s a capability that’s worth its weight in gold.
“Traditionally, actuaries relied heavily on static historical data and manual calculations. Now, with AI and ML, they can dynamically analyse vast amounts of real-time data, predict future trends, and make more accurate risk assessments. This shift is as much about enhancing the actuary’s role as it is about changing how insurance companies operate.”
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