AI Will Not Replace Actuaries Anytime Soon
I came across a great article that made me ponder for a few minutes. My conclusion agrees with the article totally for the same reason. AI will not replace actuaries or any type of insurance professional for many years. See the last section for the reason.
One main reason covers actuaries, underwriters, agents, claims adjusters, or premium auditors. First, let us cover an actuary’s responsibilities.
Many years ago, my college advisor pointed me towards Actuarial Science when I wanted to pursue a degree in mathematics. I am glad that he made that recommendation.
What Do Actuaries Do?
Why AI will not replace actuaries can be seen in part of the following definitions.
According to WGU, an actuary
uses a blend of math, data, and financial theories to assess the risk of future events and help clients develop policies in response. They often work in the insurance sector, helping design policies, determining premium charges, and deciding whether it’s financially prudent to offer coverage for a certain event or client. Overall an actuary’s role is taking their understanding of numbers and turning it into actionable information for an organization.
An old article on this website provided this definition – (Workers Comp related)
An Actuary is an insurance agent that computes dividends, rates, and risks according to statistical evidence and records. Actuaries play an integral role in the calculation of workers compensation insurance rates. Their assessments are vital in determining how much you will be paid if you are involved in a workers compensation lawsuit.
Main Reason AI Will Not Replace Actuaries
According to the Perr&Knight article
Most importantly, AI does not replace actuarial judgment. The selection of development factors, trend assumptions, credibility weights, and methodologies requires experience, context, and accountability. These decisions involve interpretation and trade-offs, not just computation. No serious practitioner is delegating them to AI, and it is difficult to imagine management or regulators accepting that approach.
Bottom Line
The above-referenced article contained one phrase that covers any insurance personnel – the required human factor would be missing.
AI will not replace actuaries. Actuaries will use AI as an enhanced tool.
