Survey Shows Most Actuaries and Underwriters Worry About Being Replaced by AI

With the vast majority (91%) of insurance companies already investing in AI or planning to in the next five years, it’s not surprising that nearly seven-in-10 actuaries and underwriters are worried about being replaced by artificial intelligence, according to a new study from pricing platform hyperexponential.

Its State of Pricing 2024 report also reveals fears about a technical skills gap and looming burnout, with 69% of actuaries and 79% of underwriters indicating they are worried about burning out in the next five years.

Both actuaries and underwriters are concerned about the future of their roles, with 69% of underwriters and 67% of actuaries saying they worry about being replaced by AI in the next five years.

Many fear they won’t have the necessary skill set or technology to do their work in the future. Actuaries are worried about “not having the right pricing platform” (84%); “not having the right tech skills” (83%); and “having to code in various languages” (80%).

Meanwhile, underwriters indicated they were very concerned about “shifting to portfolio underwriting from risk underwriting” (82 percent) and “adhering to compliance standards” (78%).

The insurance industry needs to “be intentional about using AI to bring tangible, long-lasting solutions to the market, as well as laying the groundwork by upskilling our workforce,” said hyperexponential CEO and Co-founder Amrit Santhirasenan, in a statement.

“Far from being replaced, actuaries and underwriters can add significantly more value by embracing and leveraging AI, allowing them to analyze complex data, communicate more effectively and build new tools that would have been impossible five years ago.”

“While AI is not a panacea for all the challenges the sector faces, it has the capacity to create a more productive and meaningful working life for insurance professionals. This will be vital to making the sector a more appealing prospect for potential new entrants and attracting a new, diverse generation of technically minded underwriters and actuaries.”

Tech Overhaul Needed

Ninety-six percent of respondents said they believe their pricing technology needs improvement, and 7% feel that a complete tech overhaul is required.

Among the complaints respondents have about their current pricing technology:

• 47% said they bought pricing platforms that haven’t delivered what they promised.
• 47% said they are unable to price optimally because of integration between new and legacy technology.
• 8% said they still rely on Excel and “super spreadsheets.”

Relationship Troubles

The relationship between pricing actuaries and underwriters is fundamental, but 76% of actuaries and 77% of underwriters believe there is “room for improvement” in how they work together. Poor collaboration can impact the adoption of pricing models, with less than a third of underwriters surveyed saying they consider pricing models to be “essential,” while 41% said they use the models only for risks where they trust the output. Eight percent said they “don’t trust” the models, as they are “often outdated and inaccurate.”

The study noted that regular cross-departmental meetings, joint training sessions, and the establishment of integrated project teams can help enhance the working relationship between actuaries and underwriters.

About the Study

Independent research firm Coleman Parkes surveyed 245 underwriters and 105 pricing actuaries across the UK and U.S. on behalf of hyperexponential. Respondents came from insurance companies (72%), reinsurers (20%) and MGAs (8%), and worked in either Specialty (33%) or Commercial (67%) lines.