Embracing Change: Revolution and Regulations
Digital transformation within the insurance industry continues to create opportunities for carriers and insures alike. An explosion of information and increased connectivity is improving outcomes across the entire value chain, as new data points are leveraged for mutual benefit.
In the actuarial function, this wealth of new information is contributing to its own revolution. The Actuary is becoming more technology-driven, business-oriented and collaborative. Actuaries – and the modelling work they do – are being propelled to the forefront.
The role is also in increasing demand, with jobs for qualified actuaries up 27% year-on-year in England, Scotland and Wales alone in 2021, according to data published by recruitment industry data analysts, Vacancysoft – and it’s on course for further growth this year. According to the firm's latest report for the sector, one major global broker posted 212% more new roles in 2021 than in 2020 – a real-world reflection of what is happening on the ground in this specialist field.
It stands to reason that regulation has been among the major drivers for this uptick in demand, with the challenges of responding to new rules involving increasingly complex modelling requirements. Increasingly demanding compliance requirements related to IFRS 17, and around the use of and access to customer data, for instance, have put actuarial software at the very heart of the sector’s regulatory response.
Alongside improvements in analytical techniques and advanced data science capabilities, actuarial modelling solutions have shifted up a gear in response to all these developments, towards the management and governance of bigger and more complex systems; and in addition to the ability to perform specific calculations, actuarial tools are constantly evolving to support actuaries in their role of helping the insurer remain competitive in tough business environment.
At the same time as dealing with these pressing and emerging demands, carriers recognise the need to have an eye on the future. The Open Insurance Initiative is one example of this forward-thinking. The largest data and open API project in the insurance industry demands a level of hyperconnectivity that incumbents may not traditionally have been focused on, but which will add immense value to the insurance ecosystem.
Software vendors, including ourselves at RNA Analytics, are also adapting – to help actuaries seize these exciting opportunities, in a space that is increasingly gaining attention beyond the typical insurance domain – reaching banking, asset management and risk management.
And it is a commitment that we have long been focused on. Following our purchase of the AFM business from IBM in 2017, RNA Analytics has focused on ensuring and improving our offering to our global client base. After having achieved this main objective, the next steps are focused on further product development, and on expansion into new markets.
Since the beginning of the latest phase, our investment at the product level has been ongoing, including – but not limited to – our expansion into the non-life segment, the development of our unique IFRS 17 end-to-end reporting offering, and LDTI for US customers. These recent launches will be followed by additional new features and tools throughout 2022 – allowing us to penetrate new markets and grow in those where we are already present. We are also responding to the demands of smaller carriers that do not have an established actuarial modelling department. Such companies are often using Excel calculations, which they are finding increasingly ill-suited to the highly complex processes and calculations required under new regulations.
Choosing the right partner at this pivotal time is a decision that requires careful consideration, to ensure the long-term viability of this increasingly important investment. At RNA Analytics, we form long-term partnerships with our clients, ensuring they are in a position to embrace change today, and to continue to reap the rewards into the future.