Innovation Insights: Change as Opportunity

One of my favorite quotes attributed to Steve Jobs is, “Innovation is the ability to see change as an opportunity—not a threat.” In the working world, in my observation, innovation—particularly around AI advancements—at times has seemed more like a job security threat than an opportunity. However perceived, there’s no doubt more change opportunities are coming. Reports show that 2026 could be the busiest year yet for AI, as industries across the board gear up big time to implement this tech.

For this second article about AI in the actuarial world for The Actuary, I take a further look at innovation and explore some of the revolutionary changes sweeping through the actuarial profession.

Climate

According to the BBC, in 2024, billions of people around the world experienced heatwaves and extreme weather, including deadly floods in Spain, hurricanes in the U.S. and severe drought in the Amazon. In fact, 2024 was the hottest year on record, with global temperatures breaching the critical 1.5° C threshold for a full year for the first time.

Much like climate change, the technology surrounding it is quickly evolving. One example of this, from my conversation with Miguel Wong, FCIA, FSA, CERA, FRM, director at Deloitte Actuarial and Insurance Practice in Toronto, centers around Google Maps. According to Wong, Google Maps can receive satellite data, which can then be translated to climate risk implications, addressing questions like, for instance, “How likely is a wildfire going to occur in a particular part of the map?” As noted in a Sustainability magazine article, Google has expanded its wildfire boundary tracking technology to cover more than 20 countries in an effort to use AI to inform us about climate change.

I’ve observed actuaries and other professionals adapt AI and geospatial data to help organizations make more sustainable decisions in their attempts to mitigate climate change impacts. Some are using Google Earth integrations, Good Earth Engine and technology from Vertex AI to accomplish this.

GPU

A graphics processing unit (GPU) is a specialized electronic circuit designed to rapidly manipulate and alter memory to accelerate the creation of images in a frame buffer intended for output to a display device. It’s commonly used in video game graphics, video editing, machine learning and AI tasks. In my opinion, it sets the stage for reshaping the computing industry.

For context, a typical laptop’s central processing unit (CPU) has eight cores, and servers typically have 32 or 64 cores for parallel calculations. However, a standard household-level GPU will nowadays have anywhere between 4,000 and 10,000 cores. This gives an opportunity for massive performance gains in computations that can be sufficiently parallelized.¹

As we all have likely observed, actuaries rely heavily on computing systems to analyze large datasets and build complex statistical models. Any evolution in the computing industry could directly or indirectly affect the actuarial industry, and, according to Wong, GPU is one of them.

With the implementation of IFRS 17 in 2023, the industry’s demand for computing power is at an all-time high. First of all, IFRS 17 introduced the idea of time value of guarantees (TVOG), which involves stochastic runs of 1,000 real-world scenarios to evaluate additional reserves needed to be held to support the level of guarantees offered to clients. Secondly, IFRS 17 introduced the idea of “onerosity,” which means, as an example, each year classification of insurance contracts will be created as onerous, non-onerous, and potentially onerous groups. All of these would likely require more computing power.

One example of a computing system that leverages GPU is AON’s Pathwise. Under IFRS 17, it could be used to generate TVOG scenarios, pricing, valuation and so on. Another example is Milliman’s GPU-accelerated actuarial modeling platform.

Going forward, I believe the demand for GPU solutions in the actuarial industry could be even higher. In my experience, the integration of advanced technologies is reshaping the role of actuaries and the skills they need to thrive in this new era. The revolution in the actuarial world is not just about adopting new tools or techniques. I believe it represents a fundamental shift in how actuaries approach their work, interact with data and provide value to their organizations.

By embracing predictive analytics, machine learning, and cutting-edge technologies, actuaries can position themselves at the forefront of risk management and strategic decision-making. However, this revolution also brings challenges. I believe it’s imperative that actuaries continually update their skills, adapt to new methodologies, and navigate complex ethical considerations surrounding data use and algorithmic decision-making.

I believe that continuing to attract diverse talent and perspectives to drive innovation and address emerging risks in an increasingly interconnected global economy is important for the profession. As we look to the future, it’s clear to me that actuarial work will continue to evolve rapidly. Those who can blend traditional actuarial expertise with new technological capabilities and business acumen could be best positioned to lead this revolution. The actuaries of tomorrow will not just be number crunchers, but strategic partners who can translate complex data into actionable insights that drive business value and societal progress.

The revolution in the actuarial world is well underway, and its impacts will be far-reaching. As we’ve seen, the opportunities for growth, innovation, and impact are immense. Actuaries who embrace this revolution could not only transform their careers but also play a crucial role in shaping a more resilient and data-driven future for businesses and society as a whole.

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.

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