New research on the use of artificial intelligence (AI) and machine learning (ML) in actuarial modelling across pensions, life insurance, and wider fields in the UK has been announced by the Financial Reporting Council (FRC).

The FRC's research aims to learn more about the role of AI/ML in UK actuarial modelling practices, in order to “improve our understanding of new risks that AI/ML might bring to the quality of actuarial work”.

The research, which is being carried out by the Government Actuary’s Department (GAD) on behalf of the FRC, will address four areas of enquiry, including areas of use, which will explore which actuarial departments are involved in using AI and ML techniques in their work.

It will also looks at what approaches and techniques are used and how they are selected, as well as a focus on governance, looking at the governance process around the use of AI and ML techniques compared to the governance process around more traditional techniques.

In addition to this, the research will look to examine output, looking at how the areas of use, approach and governance of AI and ML impact on both the way outputs are used internally by a company, and uncertainty around the actuarial modelling results using AI/ML, compared to uncertainty around results from more traditional approaches.

Companies and individuals have been encouraged to take part in the survey, interview or both to assist with the FRC’s findings.

The survey is now available to be completed and interviews will be carried out between February and May 2023.

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