Actuaries and Data Science

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The complex issues life insurers face today require new and unique combinations of skills. As education and experience evolve, individuals within the actuarial profession are emerging with a new set of useful skills. This new breed of actuary demonstrates extensive knowledge of advanced analytics, speaks the language of big data, integrates seamlessly with business units and delivers analytics-based solutions that solve real-world challenges in life and health insurance. It’s a fantastic opportunity for the right type of professional. Advanced analytics actuaries—also known as data science actuaries or any number of other title variations—are highly valued for their knowledge of new models and techniques that can deliver impactful results for organizations.

Not long ago, it would have seemed strange in our industry to differentiate an actuary as an “advanced analytics actuary.” By definition and tradition, actuaries are among the most analytical people within a company. But our industry has come a long way since the generalized linear models (GLMs) that many actuaries mastered a decade ago. As new tools, techniques and data have emerged and continue to evolve, we believe it’s unrealistic to expect a generalist actuary to be an expert in these areas. Enter the advanced analytics actuaries, the professionals who will take the latest tools and techniques—including artificial intelligence (AI)—and translate their potential into workable solutions for diverse areas of the business.

Are you interested in becoming an advanced analytics actuary, one of the most sought-after professionals in the life and health insurance industry? This article explores training and career paths and provides concrete tips—dos and don’ts—for how you can deepen your knowledge and expand your business capabilities.

Investigate Your Level of Passion for Advanced Analytics and Data Science

How do you know if you’re suited for an advanced analytics or data science career? Consider this: Did you see new possibilities when you learned data could improve decision-making, or did you just see more math? Or think back to when you first learned to code. If your reaction was, “Wow! I want to do more of this,” then you likely have the spark and drive needed to master this fast-moving field.

In our experience, not every actuary needs that kind of passion in their day-to-day role, so spend time considering whether becoming a data science actuary is the right focus for you.

Don’t Ignore the Importance of Professional Development

We believe an advanced analytics actuary can never be too good at coding. Learn Python and R, and seek training that can help you write and implement code that is readable and understandable. Any investment in coding is worthwhile because it often forms the backbone of your projects.

Explore conferences and training around advanced analytics, but look critically at the course descriptions. The hype around AI and new modeling techniques has spurred numerous certification and training offerings, but their quality varies dramatically. Understand that whatever new model you learn, it’s only as valuable as what it can do for your specific business. It’s up to you and your team to determine its relevancy and application.

To keep pace with the latest trends around data science and analytics, here are some possible avenues of information and expertise:

• Join an online analytics community. For example, Google’s Kaggle is a place where you can build AI models and collaborate with other enthusiasts. You can even enter competitions to solve data science challenges.
• Find helpful special interest forums or YouTube channels. There are many that track the latest data science trends and techniques.
• Follow thought leaders on LinkedIn. Don’t just look for the loud voices hyping AI, but also seek out pragmatic and sensible experts who focus on efficiency, reproducibility and the quality of their code, models and projects.
• Tap into the skills and experience of peers inside and outside your organization. Don’t forget the power of simple conversation starters like, “What new techniques or models have you discovered lately?”
• Tune into webinars showcasing insurance-specific applications of analytics techniques. The actuarial profession has done a great job of embracing the data science skill set. Professional bodies like the Institute and Faculty of Actuaries (IFoA) and Society of Actuaries (SOA) frequently host relevant webinars on these topics.
• Launch your own pet projects. This is a great opportunity to try out new techniques and solve problems. Find support from leaders at your organization who advocate for innovation and experimentation.

Don’t Be the Quiet Tech Person in the Corner

To excel as an advanced analytics actuary, it is our belief that soft skills are essential. You will collaborate with diverse teams, gather their requirements and communicate your recommendations. It’s not always easy to “train” for these skills. Courses on stakeholder management can illuminate your strengths and weaknesses in this area, but it’s up to you to put that awareness into action. It likely will require trial and error—an uncomfortable prospect but critical training ground for the soft skills you’ll need to effectively advise your internal clients and help them achieve their goals.

Another thing to remember: We advise you not to fall into a pattern of shoehorning your new favorite data science technique into every problem. Part of your job as an advanced analytics actuary is to keep pace with the latest and greatest modeling techniques. But if you force that model upon a problem without truly understanding the needs of the business unit and its leaders, you will dig yourself into a hole while unimpressed stakeholders look on. The sweet spot is when you bring your enthusiasm and knowledge to the table, combine it with the deep experience of the business leaders facing the problem, and determine the technique or model that will best achieve their aims. That intersection is when you truly learn to apply your trade.

Along the way, don’t be afraid to become a vocal champion for analytics. Ask questions and pipe up with your ideas. Be confident in your skills and work to become the go-to expert for your team.

Recognize the Project-focused Nature of the Job

Typically, an advanced analytics actuary will serve as a shared resource for multiple business units. There are positives and negatives to that type of arrangement. On the plus side, you will gain wider knowledge about the company and enjoy tackling and solving a variety of problems. A downside is you may encounter teams or team members who are wary of “consultant” colleagues who they perceive to drop in to work on a problem and then leave the grunt work to the rest of the team. This is where people skills are essential. Focus on listening to the pain points of your internal clients to understand what they really want.

Regarding career development, paths to advancement may not be a straight shot up to a management role when you work across teams. Yet as business units continue to embed data and analytics into their processes and look to experts in this area to give them a competitive edge, we anticipate an increased demand for specialized analytics knowledge and skills in senior positions, which actuaries who understand data science and advanced analytics could fill.

Find a Mentor

Look for someone whose skills and focus you admire. Someone in a senior analytics role can help you make links between what you have studied and the business problems that need to be solved, which can be particularly valuable at the start of an analytics career. They also can teach you how to get things done at the company where you work based on their hard-won experience—in both technical and nontechnical aspects of your role.

Your mentor does not have to work in your specific field. In fact, someone who works outside of analytics can bring a valuable perspective on your strengths and weaknesses and how you’re perceived throughout your organization. They can view the whole picture and candidly give you feedback on why you’re not getting engagement from a certain team or how you can turn the tide on a strained working relationship. This outside view can be particularly useful for those looking to take on responsibilities beyond technical work.

When you’ve identified a mentor candidate, reach out to them, secure their involvement and commit to regular meetings. When you feel ready, become a mentor yourself: Find younger professionals on your team and teach them the basics of advanced analytics.

Conclusion

We believe we are at a fascinating and exciting point in the actuarial profession. Advanced analytics actuaries are the skilled, self-aware and ambitious professionals who will discover the new techniques that will refine business processes and help achieve our goals.

If the opportunities and challenges we’ve outlined in this article have piqued your interest, we encourage you to contact advanced analytics and data science professionals and pick their brains about how and why they pursued their specific roles. The flood of new analytics tools and techniques will likely only grow, and we welcome all the talented actuaries who will join us in expanding what’s possible for our industry.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.

Copyright © 2024 by the Society of Actuaries, Schaumburg, Illinois.