Technology is reshaping every aspect of financial services, and actuarial modelling is no exception.
What was once the domain of specialised teams working with complex spreadsheets and proprietary software is now evolving into a smart, real-time ecosystem powered by cloud computing, artificial intelligence (AI), and automation.
A new era for actuarial modelling
The rise of low-code and open-source platforms is empowering actuarial teams to prototype and deploy models more rapidly. This shift reduces reliance on third-party vendors and internal subject matter experts, unlocking new opportunities to streamline traditionally cumbersome processes such as data preparation, proxy modelling, model calibration, and scenario analysis.
The trend is unmistakable. At the recent life actuarial conference in Scotland, and, a few months earlier, at a global finance conference in London, it was striking how many participants were exploring AI and emerging technologies as part of their reporting, financial planning, and stress testing. Their goal? To unlock the value of data, free-up valuable actuarial resources and enable faster, more reliable decision-making. This marks a significant shift, from retrospective, time-consuming analysis and manual processes to real-time forecasting and automated management information (MI).
However, this rapid evolution brings its own challenges. The sheer volume of available technologies can be overwhelming, and there’s a real risk of investing in solutions that may quickly become obsolete and/or that do not show the cost benefits promised.
From a talent perspective, concerns are emerging that junior actuaries may lose exposure to foundational skills, such as building and validating models from first principles and become overly reliant on AI-generated “black-box” systems, potentially compromising their understanding of the underlying mechanics of actuarial modelling. These advancements can replace opaque, restricted vendor solutions with transparent open-source code – building on robust logic and control framework - while expanding access to richer information, collaborative activities, and strategic opportunities.
What could the future hold?
The next leap in actuarial modelling will focus on open-source, real-time, AI-driven decision-making. Advancements in GPU technology, and in the future quantum computing, create opportunities for insurers to run thousands of complex scenarios in seconds, giving management teams the agility to understand impacts and adapt strategies on demand.
The actuary’s role is expanding beyond pricing, valuation, and reserving. Increasingly, actuaries are becoming more central to business insight and strategy. Proficiency in Python, R, SQL, and AI-powered analytical tools is becoming as critical as traditional actuarial techniques. These skills enable teams to automate routine tasks, accelerate data analysis, and build more flexible models.
Yet, this transformation also introduces new risks. As insurers become more dependent on advanced technologies, challenges around cybersecurity, data integrity, and operational resilience will intensify. With more models running in the cloud and powered by AI, robust governance and clear safeguards will be essential to optimise insights while managing costs.
Key considerations for insurers
For insurers and financial institutions, the challenge is not just adopting new technologies but using them strategically to build long-term value, considering multiple dimensions such as:
Strategy
Reimagine decision-making process and reporting by embedding advanced technology, modelling tools, and modern infrastructure.
Unlock potential across people, processes and systems to deliver strategic, forward-looking insights that optimise financial performance.
Operational
Balance intelligent automation with human expertise to maintain transparency, resilience, and alignment with business objectives.
Continuously model and adapt to emerging risks, ensuring agility in response to market dynamics and regulatory change.
Organisational
Empower new and existing talent by providing clear structures, appropriate governance and frameworks that facilitate innovation and accountability.
Foster a culture of continuous improvement, redefine risk appetite, and invest in people and training.
Our expertise
Our team possesses in-depth technical knowledge across finance, actuarial, modelling and technology transformation. We combine this with hands-on experience supporting clients throughout their modernisation journey. Whether navigating complex regulatory landscapes, implementing cutting-edge systems, or driving strategic change, we bring both insight and practical execution to every engagement.
To speak to a member of our insurance team to discuss digital transformation in your business contact us using the button below.
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