The full survey can be found at AI and ML in Actuarial and Risk. But key findings include:
Scepticism around AI and ML persists, driven by concern around regulation
Many respondents cited the difficulty to validate outputs, as well as issues with their reliability and accuracy. Alongside these concerns, many interviewees flagged a lack of AI and ML skills and experience in their organisations, with the need for training and additional resources viewed as essential.
Most respondents would appreciate more practical guidance on how AI and ML can be responsibly and effectively integrated into their professional work, without preventing innovation. Regulatory compliance has been noted as a concern when using third-party AI tools, which has held back the pace of adoption.
Actuarial professionals more optimistic
The quantitative nature of actuarial work means that many in the field see the opportunities and benefits of AI and ML tools as more tangible. In contrast, risk professionals displayed more hesitancy around investing in these tools, citing the relatively less quantitative data they rely on.
Data quality named priority one
The results of the report highlighted concerns that AI models are only as reliable as the data they are trained on. Other considerations include the need for continuous improvement, as well as transparency and interpretability. The report notes, however, that if human resource can be trained to cope with and adapt to those data vagaries and shortcomings, then so can AI – in time, probably better and faster. Data will never be perfect, so why let it be a reason not to embrace the opportunity.
Full potential remains untapped
In responses, many participants reported using ML and AI tools to supplement and augment existing processes like classifying claims information and identifying trends in pricing and reserving work. Around half of respondents reported limited or no implementation.
Sanjiv Sharma, Head of Actuarial and Exposure Management at the Lloyd’s Market Association, commented: “The results of this survey show that there is a long way to go in adopting and leveraging the full potential of AI and ML tools. Currently, the focus is on automation and efficiency gains, but I would encourage market firms to actively explore the opportunities in this space. Firms that successfully integrate AI and ML into their actuarial and risk functions and beyond, can gain a competitive edge and make more informed strategic decisions. They are tools that can drive real innovation, if users are able to balance the potential benefits with the compliance and ethical considerations that will be key to Lloyd’s participants continuing to lead in global insurance.”
Wan Hsien Heah, Partner and Head of General Insurance at Barnett Waddingham, commented: “It’s been a pleasure collaborating with the LMA on this survey, which is aimed at providing the market with insights on the adoption of AI and ML. Challenges remain when it comes to further adoption but the survey will hopefully spur discussions that will lead us towards defining what market practice looks like for implementing AI and ML in actuarial work within general insurance.”
The report collates insights from respondents across the market representing approximately 55% of market stamp capacity, as well as six in-depth interviews. The survey is a sequel to the LMA’s 2024 discussion paper, Artificial Intelligence and the Lloyd’s Actuary: A Snapshot of Opportunity and Risk.
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