Let actuaries be involved in the use of AI and Big Data to avoid more mistakes

Column by Esko Kivisaari

ESKO KIVISAARI, Chair of Artificial Intelligence and Data Science working group for the AAE

Characteristic to my early actuarial career were simple models based on age and gender, often together with the assumption of a fixed interest rate. We knew these models could be improved with better data. Data was however expensive even when it was available and its manipulation was slow, and also expensive. Furthermore it was impossible to be certain of the validity of the data. As we knew the models were lacking we needed to have safety margins here and there together with restrictive underwriting criteria in order not to sacrifice the solvency of our employer.

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This article represents the opinion of the author, and not necessarily the opinion of the AAE.

This article was published in The European Actuary No. 33 – March 2023