In a highly topical Concurrent session on ‘Leveraging Technology Data and Analytics to Transform an Actuarial Function’ at the 2021 All-Actuaries Virtual Summit, Zeming Yu (Principal Data Scientist, Munich Re Greater China) joined Bartosz Piwcewicz (Partner and Head of Actuarial Transformation, Systems and Data, KPMG) and Lawrence Ng (Manager of Actuarial and Data Analytics Team, KPMG) to discuss how technology, data and analytics can be used to transform an actuarial function.
Speaking on Thursday 6 May, Zeming began the discussion by noting that, “the actuarial profession has accumulated a wealth of traditional techniques that have evolved over a long period of time. But, with the rise of big data and data science, powerful techniques have emerged that can supplement and enhance what actuaries do as a profession.” Yet the overarching question to this discussion is exploring whether the profession is marrying the traditional and emerging techniques to create value, rather than value protection for the actuarial industry.
To create a targeted discussion in which practical insights can be extracted, Bartosz and Lawrence ‘flips the question,’ to discuss why the life insurance sector is not leveraging technology, data, and analytics to transform the actuarial functions.
Drawing on their experience and client engagement, Bartosz identified that the three key themes stopping transformations are:
- lack of support in terms of funding and conviction;
- not knowing where to start; and
- the lack of multi-disciplinary capabilities within a company or team.
Discussing the lack of funding and conviction, he noted that “transformation programmes can bring significant benefits, but they can also be quite costly in terms of technology costs and additional resources.”
Reflecting on KPMG’s recent transformation journey, Bartosz highlighted “the critical importance of conviction to sustain the transformation journey as benefits are never fully realised if conviction fades away, and transformation programmes die-off.”
As an example for overcoming the lack of conviction, he offered industry insights by highlighting a client who recognised the need for efficient technology and analytics to shift focus of its actuarial function from value protection to value creation activities, which would benefit the business and its customers. This was achieved by linking the overall transformation vision with risk management concerns that the client wanted to solve for.
Progressing from a strategic overview as to why funding and conviction is important, Lawrence then discussed the practical implications of transformation journeys in the life insurance sector citing that many professionals can be unsure of where to start.
Lawrence noted “that it could be that they’ve done a strategic piece to outline the vision, or they have analysed the gaps between the current state and the target future state, but, because of the multiple objectives and priorities, they can have difficulties knowing where to start.”
Reflecting on approaches that he has used in the past, Lawrence outlined that for a transformation journey to be successful, it is helpful to look for repeatable patterns and address these upfront, so that the foundations of the future state can be set up right and earlier on in the journey. In doing so, he emphasised that these foundations can then be used as adaptable ‘building blocks,’ which are strengthened over time and support the gradual transformation process.
In addition to not knowing where to start, team capabilities provide an additional barrier in the process as lack of effective communication between team members may pose a threat to any transformation journeys.
Lawrence highlighted that “technology, data and analytics transformation generally involved multi-disciplinary knowledge and skillsets in business, actuarial, analytics and technology,” which need to be merged for a transformation journey to be successful.
Yet, as some transformation programmes can be made up of teams which are “too silo-ed,” this can lead to what Lawrence refers to as, “not having the right skin in the game.” To overcome this barrier, he drew on his experience and suggested that encouragement of the mindset of ‘one-team,’ and having people with multi-disciplinary skillsets who ‘speak the languages’ of different professions, can enhance collaboration and team upskilling.
Concluding the discussion, Lawrence highlights that while “there is no silver bullet to transformation,” it is essential to have a vision tied to a fundamental common purpose as this will assist in ensuring a strong and ongoing foundation along the transformation journey.
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