Actuarial Innovation & Technology Strategic Research

Actuarial Innovation & Technology Research Reports

2023

• Blockchain Opportunities for Insurance and Financial Industries
  March
  On January 12, 2023, the Arizona Blockchain Applied Research Center (AZ BARC) and the SOA Research Institute jointly ran a workshop on the use of blockchain technology in insurance and financial industries. The workshop included presentations focused on academic research in the blockchain space by Arizona State University, AZ BARC and an industry expert panel assembled by the SOA Research Institute. This document summarizes the research highlights and the discussions that occurred during the two-hour workshop.
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• Cyber Risks in the Smart Home Ecosystem: Identification, Modeling, and Pricing
  February
  This project enhances the current understanding of cyber risks in the smart home ecosystem from the insurance industry's perspective. In particular, the quantitative framework and pricing strategies developed in this project can be immediately adopted/adapted by actuaries to price the cyber risks for smart homes, a fast-growing insurance market.
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• Data Challenges in Building a Facial Recognition Model and How to Mitigate Them
  January
  This paper is an introduction to AI technology designed for actuaries to understand how the technology works, the potential risks it could introduce, and how to mitigate risks. The author focuses on data bias as it is one of the main concerns of facial recognition technology.
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• Fostering Innovation: A Guide for the Actuarial Profession
• January
  The Society of Actuaries (SOA) sought to investigate methodologies and characteristics associated with actuarial innovation, aiming to expand the industry’s capabilities for creativity. The SOA engaged Milliman to conduct in-depth interviews and focus groups with select actuaries who have demonstrated innovative skills, in order to derive key behaviors and characteristics that encourage innovation.

2022

• Actuarial Technology Issues - A Roundtable Discussion - August 2022 Update
  November
  On August 29, 2022, the SOA Research Institute assembled an industry expert panel to discuss current issues in actuarial technology. This was the third time such a panel was assembled, and most panelists had participated in the previous discussions.
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• US and Canada: An Era of Value-added Enterprise Risk Management
  September
  Enterprise risk management (ERM) is an orderly or guided conduct of an enterprise to deal with risks. For insurers, ERM requires full support and commitment of the senior management. ERM in the U.S. and Canada has evolved over the years into a complex ecosystem.
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• India: Growth Opportunities on the Rise
  September
  The Indian market holds tremendous potential for insurance products, especially in segments that remain untapped. The market is evolving in terms of market penetration, product innovation, regulatory changes, government initiatives, capital adequacy and customer experience. In this report, we have highlighted insurance trends in India based on insights gathered from practitioners' interviews, available research and literature, with a particular focus on the enterprise risk management (ERM) function of insurance companies.
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• Decentralized Insurance Alternatives: Market Landscape, Opportunities and Challenges
  September
  Decentralized insurance alternatives is a rapidly expanding sector of Decentralized Finance (DeFi), an emerging and growing financial ecosystem powered by blockchain technologies. The purpose of this report is to review and discuss the business models and operating designs of decentralized insurance alternatives, which may have significant implications for traditional insurance businesses, as well as the actuarial profession.
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• A Risk Classification Framework for Decentralized Finance Protocols
  September
  Decentralized finance (DeFi) is an emerging and rapidly growing financial ecosystem with the defining feature that it is powered by blockchain technology. The focus of this paper is on risks for DeFi protocols that could lead to economic losses that could be insurable. This framework was designed around the risks associated with the existing and emerging DeFi protocols.
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• Avoiding Unfair Bias in Insurance Applications of AI Models
  August
  Here’s a framework for avoiding or mitigating risks of unfair bias when developing insurance industry AI models, developed from interviews with industry leaders on the topic.
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• China: An Era of Insurance Innovation
  July
  The Chinese insurance market is grappling with product innovation, business growth and regulatory oversight as it tries to keep pace with a sharp growth in demand across product segments. In this context, the authors have highlighted insurance trends in China, based on available research and literature, with a particular focus on topics that will drive the enterprise risk management (ERM) function of insurance companies. ERM provides an opportunity for insurers to identify and mitigate potential insurance risks by enhancing their policies and risk management activities. This report explores the insurance trends in detail, drawing on findings from interviews of practitioners in the Chinese market, to provide context for the drivers of ERM transformation.
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• InsurTech Insight Americas Correspondent Report
  July
  The Society of Actuaries (SOA) Research Institute released a report summarizing the InsurTech Insights Americas conference held May 24-26, 2022. InsurTech, a concept created 10-15 years ago, is maturing and currently western financial markets are recording a downward trend while inflation is rising. While this downward pressure on financing makes investors more cautious, stakeholders are working towards partnerships to improve the overall effectiveness and purpose of the insurance industry.
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• Actuarial Technology, A Roundtable Discussion on Current Issues – March 2022 Update
• June
  On March 21, 2022, the SOA Research Institute gathered a panel of insurance industry experts for an update on current actuarial technology topics to help identify directions for future research efforts. This was the second time the panel was assembled; the first was on November 30, 2021. This report summarizes their discussions.
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• Decentralized Finance for Actuaries
  March
  Decentralized finance, or DeFi, is an emerging financial system powered by blockchain technology. This research report aims to introduce actuaries to DeFi and help them develop a solid understanding of DeFi.
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• Actuarial Technology, A Roundtable Discussion on Current Issues
  January
  On November 30, 2021, the SOA Research Institute assembled an industry expert panel to discuss current issues in actuarial technology. Each participant who volunteered to be part of the discussion was selected because of their management-level responsibilities for the application of technology in an actuarial context. This document summarizes the discussion that occurred during the three-hour meeting.

2021

• InsureTech Connect 2021
  October
  InsureTech Connect 2021 covered emerging trends and future opportunities for insurance technology. In addition, Society of Actuaries (SOA) staff along with key SOA volunteers who work in the insurtech industry interviewed a variety of attendees to gather further information on these trends. This report covers key trends in the insurtech industry, opportunities for actuaries, and future considerations and observations.

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• Emerging Technologies and their Impact on Actuarial Science
  October
  The Society of Actuaries Research Institute commissioned this study to highlight the leading emerging technologies that may significantly affect the actuarial profession over a three-year horizon. This study will act as a guide and a resource for actuaries or potential employers to identify the prospective tools to enhance or expand actuarial work, for people collaborating with actuaries who may be affected by these technologies, and for leaders looking to enable teams employing actuaries through the introduction of these tools.
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• InsurTech and Venture Capital Survey
  August
  

  InsurTech is commonly described as providing insurance protection and services through new technology innovations and is seen as a growing place, where the actuarial profession provides expertise and services. To understand the impact of venture capital and insurtech, a survey was released to key members of both the actuarial profession and the InsurTech industry. This report summarizes survey results.

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• Discussion of Efficient Computational Structure of Nested Stochastic Modeling
  July
  Actuaries have a long history with stochastic modeling. Nested stochastic modeling (NSM) is often used when the modeling components under each economic scenario are themselves determined by stochastic scenarios in the future. In this paper three methods are suggested that can be added on top of existing enhancement methods to improve NSM efficiency.
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• Automated Vehicle Systems Outlook, 2021 Update
  June
  Despite the advent of COVID-19, autonomous vehicle (AV) market leaders continued to invest in technology and to establish partnerships with vehicle original equipment manufacturers (OEMs). This report provides a 2021 update on autonomous vehicles.
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• InsurTech: A Guide for the Actuarial Community
  April
  This report is intended to serve as a guide to the InsurTech landscape for the actuarial community and insurance practitioners.
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• Interpretable Machine Learning for Insurance
  April
  Machine learning algorithms fit models based on patterns identified in data and can be very complex. In this report, we describe and illustrate a range of methods for interpreting machine learning models from the growing field of Interpretable Machine Learning (IML).
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• A Primer on Insurance Policies and Genetics
  March
  This primer paper seeks to introduce and update the actuarial profession to the topic of insurance policies and genetics and study the impacts on insurance and potential responses.
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• Peer-to-Peer Insurance: Blockchain Implications
  March
  Peer-to-peer (P2P) insurance is one such business model where individuals or economic agents join together and pool their resources for mutual aid. The aim of this project is to showcase the development of a P2P insurance model and analyze it from both technological and product perspectives.
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• Taking Life Insurance Customer Engagement to the Next Level
  January
  Taking Life Insurance Customer Engagement to the Next Level, commissioned by the Society of Actuaries and produced by Aite Group, uses consumer insights, market trends, and domain expertise to provide ideas that can help insurers create better customer relationships and drive better outcomes for customers and their organizations.
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• Fintech and the Retirement Savings System
  January
  The Aging and Retirement and Actuarial Innovation and Technology Strategic Research Programs are pleased to make available a report that provides a sampling of new financial technologies (fintech) and their applications related to retirement savings systems affecting participants, plan sponsors and service providers.

2020

• Selected Report Summaries in Chinese
  October
  The SOA has translated four of its AIT report summaries into both Traditional and Simplified Chinese. They are “Behavioral Science”, “Big Data and the Future Actuary”, “Cancer Genomics”, and “Cloud Computing and Machine Learning Uses in the Actuarial Profession”.
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• Epigenetics: A White Paper on Technology and Innovation
  September
  This paper explores how molecular biology, specifically epigenetics, may impact the life insurance industry, and considers the effects of utilizing epigenetic biomarkers for underwriting.
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• Exposure Measures for Pricing and Analyzing the Risks in Cyber Insurance
  June 2020
  This report identifies and makes recommendations regarding possible exposure measures for pricing and analyzing the risks in cyber insurance.
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• Quantification of Cyber Risk for Actuaries
  May
  This study aims to develop a generic model that can be applied by any organization. For the validation of the developed cyber risk analysis method, simulations and sensitivity analysis will be performed.
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• Actuarial Practice Innovation Call for Essays
  May
  This report is a compilation of the prize winning essays from the recent Actuarial Practice Innovation Call for Essays.
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• Validating Algorithmic Underwriting Models – Expert Panel Report
  March
  On December 11, 2019, the Actuarial Innovation and Technology Steering Committee of the Society of Actuaries (SOA) assembled an industry expert panel to discuss the key considerations and challenges of algorithmic underwriting model (AUM) validation.
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• Electronic Health Records (EHRs): A White Paper Summary
  January
  Electronic Health Records, or EHRs, are a major worldwide initiative to eliminate paper recordings – including the Attending Physician Statements (APSs) – of an individual’s medical history and current treatment. This paper explores Electronic Health Records in depth.

2019

• Literature Review: Artificial Intelligence and Its Use in Actuarial Work
  December
  The purpose of this report is to review research on how artificial intelligence is used in actuarial work.
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• Summary of Innovation and Technology Research Reports
  November
  A brief overview of recent AIT research papers in summarized format.
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• An Update on the Outlook for Automated Vehicle Systems
  October
  To help describe current trends and highlight differences between the cars we see on the street today and driverless vehicles, this report relies on three market-related definitions; safe, self-driving and driverless.
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• Ethical Use of Artificial Intelligence
  September
  The purpose of this report is to highlight the ethical risks arising from the application of AI in actuarial practice and to have tools to use to identify and manage it.
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• A Tour of AI Technologies in Time Series Prediction
  July
  In this report, we will try to provide an in-depth review of current Machine Learning and Deep Learning models and will explain how those models works and their possible applications in the actuarial field.
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• Emerging Data Analytics Techniques with Actuarial Applications
  July
  The aim of this research is to survey emerging data analytics techniques and discuss their evolution and growing use in the actuarial profession. Data analytics’ applications in life and non-life insurance will also be provided.
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• Cloud Computing and Machine Learning Uses in the Actuarial Profession
  July
  Actuarial modeling has gone through several distinct phases largely defined by the underlying technology platform. Today, cloud computing is again redefining the technology foundations of actuarial modeling and related processes.
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• Behavioral Science Report
  June
  Situated at the intersection of psychology, neuroscience, sociology, and economics, behavioral economics (BE) centers on applying an honest understanding of human behavior to practical problems.
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• Insurance Regulatory Issues in the United States
  May
  This research examines the intersection of U.S. insurance ratemaking and analytics techniques in advanced modern rating systems and associated regulatory considerations in the U.S.
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• Technology In Microinsurance
  May
  This literature review provides insights on emerging technologies that interact with the actuarial profession within the space of microinsurance for the purpose of establishing a frame of reference for actuaries to use in their work.
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• Cancer Genomics
  May
  

  The treatment of advanced cancer is undergoing a major paradigm shift. Traditional pillars of cancer treatment – surgery, radiation, and chemotherapy – are moving to two new efficacious approaches: tumor genomics and immunotherapy. This analysis report introduces SOA stakeholders to these brand-new areas, examines the growing clinical evidence, and sets initial projections for cost effectiveness.

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• Big Data and the Future Actuary 
  April  
  The purpose of this report is to review the existing literature on how today’s unprecedented access to data is reshaping the capabilities of insurance actuaries. Topics covered in this report include the ways in which actuaries are using non-traditional data sources, how this is likely to evolve into the future, and how the typical roles, technologies, and skillsets of the future actuary will look different than they do today.
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• Top Actuarial Technologies of 2019 
  April 
  This research study aims to understand the current and planned use of various technology types and tools and to highlight those technologies that are anticipated to grow the fastest among actuaries in 2019. It also explores the growing set of emerging technologies and discusses perspectives on the abilities of actuaries to adopt them.
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• Machine-Learning Methods for Insurance Applications - A Survey 
  January    
  The Society of Actuaries is pleased to make available a research report that provides a literature survey of methodologies applying machine learning to insurance claim modeling.

2018

• The Development Of WeChat Marketing 
  December  
  WeChat is gradually becoming the main force of insurance online marketing for insurance products in China. With the popularization of WeChat communication technology, more and more insurance companies have started to use the WeChat platform.
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• Market Framework and Outlook for Automated Vehicle Systems 
  November 
  The surface transportation industry is in the early stages of a series of profound changes, stimulated by the development of increasingly sophisticated driving safety and automation technologies.
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• The Impact Of Genetic Testing On Life Insurance Mortality 
  October 
  The Society of Actuaries (SOA) Reinsurance Section, Product Development Section and the Committee on Life Insurance Research, are pleased to make available new research exploring genetic testing and U.S. life insurance mortality.

2017

• Cybersecurity Insurance: Modeling and Pricing 
  March   
  This research paper develops a framework for modeling and pricing cybersecurity risk.