By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SmartData Collective
  • Analytics
    AnalyticsShow More
    data analytics in sports industry
    Here’s How Data Analytics In Sports Is Changing The Game
    6 Min Read
    data analytics on nursing career
    Advances in Data Analytics Are Rapidly Transforming Nursing
    8 Min Read
    data analytics reveals the benefits of MBA
    Data Analytics Technology Proves Benefits of an MBA
    9 Min Read
    data-driven image seo
    Data Analytics Helps Marketers Substantially Boost Image SEO
    8 Min Read
    construction analytics
    5 Benefits of Analytics to Manage Commercial Construction
    5 Min Read
  • Big Data
  • BI
  • Exclusive
  • IT
  • Marketing
  • Software
Search
© 2008-23 SmartData Collective. All Rights Reserved.
Reading: Experts Debate: Is Big Data a Boon or Risk for Actuaries?
Share
Notification Show More
Latest News
big data mac performance
Data-Driven Tips to Optimize the Speed of Macs
News
3 Ways AI Has Helped Marketers and Creative Professionals Streamline Workflows
3 Ways AI Has Helped Marketers and Creative Professionals Streamline Workflows
Artificial Intelligence
data analytics in sports industry
Here’s How Data Analytics In Sports Is Changing The Game
Big Data
data analytics on nursing career
Advances in Data Analytics Are Rapidly Transforming Nursing
Analytics
data analytics reveals the benefits of MBA
Data Analytics Technology Proves Benefits of an MBA
Analytics
Aa
SmartData Collective
Aa
Search
  • About
  • Help
  • Privacy
Follow US
© 2008-23 SmartData Collective. All Rights Reserved.
SmartData Collective > Big Data > Experts Debate: Is Big Data a Boon or Risk for Actuaries?
Big DataExclusive

Experts Debate: Is Big Data a Boon or Risk for Actuaries?

Annie Qureshi
Last updated: 2017/06/26 at 6:33 PM
Annie Qureshi
6 Min Read
Experts Debate: Is Big Data a Boon or Risk for Actuaries?
SHARE

Banks, insurance companies and other firms in the financial sector have relied extensively on big data for decades. Over the last couple of years, the big data revolution has opened new doors for these firms. According to a report from Accenture, they invested $6.4 billion in big data in 2015.

Contents
Is Big Data a Big Opportunity or Big Risk for Actuaries?Big Data Can Be Very Helpful for Actuaries, but Risks Remain

Few people want to dispute the benefits of big data. They believe that it will reduce inefficiencies, improve their risk models and bolster customer service. While there is a lot of truth to all of these points, there are also some risks that actuaries and other financial professionals need to be aware of.

Is Big Data a Big Opportunity or Big Risk for Actuaries?

Jenny Lyon, Senior Vice President of the Actuaries Institute, spoke at The Institute and Faculty of Actuaries (UK) 2nd Asian Conference last year. A number of other experts also spoke at the conference, including Peter Banthorpe, Global Head of Research and Development at RGA and Fellow of the Institute and Faculty of Actuaries.  They mentioned that companies such as ZoomHR are using big data more than ever before. Lyon and Banthorpe said that big data is a double-edged sword for actuaries throughout the world.

Here are several concerns that need to be addressed to ensure big data is used properly.

More Read

data analytics in sports industry

Here’s How Data Analytics In Sports Is Changing The Game

What Role Does Big Data Have on the Deep Web?
Use this Strategic Approach to Maximize Your Data’s Value
How Data and Smart Technology Are Helping Hospitalists
Niche Data Tactics to Take Your Business to the Next Level

Quality, Completeness and Accuracy of Data

Every actuarial model relies extensively on data. The quality of those models hinges on the quality of the data behind them.

One of the biggest issues with big data is validation. Data is often aggregated from sources where it can be difficult to assess the reliability. A growing number of actuaries use data from social media, where it can be difficult to authenticate.

If actuaries intend to rely more heavily on big data, they are going to need to vet it first. They will either need to:

  • Develop new algorithms that can filter suspicious data from less trustworthy sources.
  • Restrict their analyses to data that can be easily validated.

If they become too reliant on unverifiable data, their models will become less accurate.

Future Regulations

Regulators around the world are trying to decide how tightly they need to restrict access to big data. They have to weigh concerns about privacy, discrimination risks and other factors to protect the general public.

Banthorpe predicts that the FTC and other regulators are expected to roll out new regulations in the future. This is a risk for actuaries, because they may need to revise their models in the future if they lose access to certain data that has become instrumental to their models.

Accuracy of Algorithms

Even if data has been carefully vetted, it can be difficult to ensure it is properly employed. Many actuaries worry that the algorithms behind big data may not be properly setup.

These algorithms tend to be less accurate with predictive analytics, especially after a few years. One algorithm suggested there was a 99% likelihood that actuaries would be replaced by machines in the near future, while more reliable models suggested that the likelihood was only 21%.

Big Data Can Be Very Helpful for Actuaries, but Risks Remain

Big data is changing the actuarial profession in unprecedented ways. Overall, the benefits seem to far outweigh the costs. However, there are a number of risk that need to be taken into consideration as well.

Actuaries and their employers will need to be selective with their data. They must also make sure that their models are properly constructed.

As long as they take the necessary precautions, big data should significantly improve the quality of their models. A growing number of insurance companies and lenders will use it to minimize their risk profiles.

Lyon states that big data won’t automate the actuarial profession. Actuaries will need to be proactive about learning how to use it to bolster the quality of their work.

“There is an increasing need for collaboration and companies working in partnerships and in a multidisciplinary environment will continue to expand.  For example, when considering wearables and their emergence in the insurance field, insurers will need to think about the role they want to play and probably work with partners who can manipulate the data and provide insights… In summary, I came away excited about the potential for actuaries working in this field but very aware that, as in most areas, there will be a strong need for individual motivation, learning and development along with a flexible and adaptable approach.”

TAGGED: big data, big data risk for Actuaries
Annie Qureshi June 26, 2017
Share this Article
Facebook Twitter Pinterest LinkedIn
Share
By Annie Qureshi
Follow:
Annie is a passionate writer and serial entrepreneur. She embraces ecommerce opportunities that go beyond profit, giving back to non-profits with a portion of the revenue she generates. She is significantly more productive when she has a cause that reaches beyond her pocketbook.

Follow us on Facebook

Latest News

big data mac performance
Data-Driven Tips to Optimize the Speed of Macs
News
3 Ways AI Has Helped Marketers and Creative Professionals Streamline Workflows
3 Ways AI Has Helped Marketers and Creative Professionals Streamline Workflows
Artificial Intelligence
data analytics in sports industry
Here’s How Data Analytics In Sports Is Changing The Game
Big Data
data analytics on nursing career
Advances in Data Analytics Are Rapidly Transforming Nursing
Analytics

Stay Connected

1.2k Followers Like
33.7k Followers Follow
222 Followers Pin

You Might also Like

data analytics in sports industry
Big Data

Here’s How Data Analytics In Sports Is Changing The Game

6 Min Read
big data technology has helped improve the state of both the deep web and dark web
Big Data

What Role Does Big Data Have on the Deep Web?

8 Min Read
analyzing big data for its quality and value
Big Data

Use this Strategic Approach to Maximize Your Data’s Value

6 Min Read
big data and smart technology in healthcare
Big Data

How Data and Smart Technology Are Helping Hospitalists

8 Min Read

SmartData Collective is one of the largest & trusted community covering technical content about Big Data, BI, Cloud, Analytics, Artificial Intelligence, IoT & more.

data-driven web design
5 Great Tips for Using Data Analytics for Website UX
Big Data
AI and chatbots
Chatbots and SEO: How Can Chatbots Improve Your SEO Ranking?
Artificial Intelligence Chatbots Exclusive

Quick Link

  • About
  • Contact
  • Privacy
Follow US

© 2008-23 SmartData Collective. All Rights Reserved.

Removed from reading list

Undo
Go to mobile version
Welcome Back!

Sign in to your account

Lost your password?