Joint iCAS, SOA, and CIA Predictive Analytics Seminar

By Joseph Gabriel

The first jointly sponsored CIA, Society of Actuaries (SOA), and CAS Institute (iCAS) Seminar on Predictive Analytics held on February 27, 2019 was a resounding sold-out success.

CIA President-elect Marc Tardif, CAS President Jim Christie, and SOA Immediate Past President Mike Lombardi opened the session with remarks about each organizations’ commitment to predictive analytics (PA) given its key importance to the profession.

Mr. Tardif described the seminar content as eye-opening, particularly on data privacy issues, while Mr. Christie characterized the event as a “fantastic learning activity”, where the three organizations joined efforts to produce a cutting-edge seminar of great interest.

P&C Leads Insurers in Using PA

Participants learned that property and casualty (P&C) leads insurers in the use of PA, mainly as a result of the electronic collection of data to conduct business, and the substantial competitive advantage PA provides. On the life side, while PA is not as prominent, presenters showed that using a statistical approach to life insurance underwriting can reduce the application process by over 40 percent.

Wanted: Data Heroes?

Beyond data and modelling, governance was also brought into the PA mix. Governance, privacy, and bias considerations of the modelling process are real. Uncertainty about what is required from a regulatory perspective is a key issue. Speakers noted that with the rise in complexity of PA models, investing equally in the governance frameworks that surround this effort is a necessity. The notion of a CDO (chief data officer!), or “data hero”, was even proposed to emphasize the importance of data governance as part of an organization’s culture with regard to data.

Cyber Risk Modelling

An interactive session on cyber risk captivated the audience, which designated the dynamic nature of cyber risk as the first and foremost concern. The three pillars of cyber risk modelling were described; namely, the model itself, the data, and flexibility, given the short maturity and the ever-changing nature of cyber risk. Speakers exposed the broad implications of cyber risk, ranging from financial information fraud to major infrastructure network breaches. Surprising impacts included remotely overheating printers with the malevolent intent of causing multiple building fires simultaneously!

All sessions revealed that PA is well entrenched in actuarial practice, such as in mortality modelling using general linear models and in disability claims analysis, while making inroads into life and health insurance underwriting.

How to Thrive or Survive in the Millennial Age

To conclude the seminar, Canada’s leading authority on his generation, David Coletto, delivered an engaging and content-filled presentation. He explained why using his “SHIFT” approach is critical to leading and succeeding in today’s marketplace, based on the fact that on average, millennials have 5.5 connected devices from which data can be extracted and analyzed.

As both a Fellow and a staff member of the CIA, I am very proud to be part of a professional organization that played a major role in preparing such an important and uplifting CPD opportunity.

I hope to see you at our future events.

Joseph Gabriel is Staff Actuary, Education, at the CIA.

Canadian Institute of Actuaries/Institut canadien des actuaires