Contingencies - January/February 2018

RPA and the Future of Actuarial Work

RPA is one of several “megatrends” reshaping the economy and the nature of work itself.

Thanks to the drive for more customer-centric offerings, transformation and modernization programs, and associated technology innovations, the future work of actuaries and others will be vastly different than their past work (see Figure 3).

Actuarial “customers” in the business want better, more timely, and efficient decision support. External customers and distributors want more personalized experiences, faster answers, and more digital interaction. These demands are accelerating innovation and disruption and requiring new levels of cross-functional collaboration. More and more tasks and activities will be automated.

Although increased straight-through processing will displace a significant number of jobs over time, the remaining workers will be realigned to higher-value analytical and decision support activities—with new roles and responsibilities yet to emerge.

Leaders will require new competencies to manage a workforce that is becoming leaner, yes, but also more skilled, diverse, remote, and contingent. Attracting and retaining high-performing workers will be more important—and more difficult—as employee expectations rise and the competition for talent intensifies. Executives will be evaluated on their ability to drive innovation and adopt data-driven, analytics-enabled decision-making as the new normal.

It is a challenging time for actuaries and the industry as a whole, but it is also an exciting era of unprecedented opportunity. Thriving in the new era will require:

1. Strong and diverse leadership teams with the ability to align and integrate the finance, risk, and actuarial domains and to manage the “metrics that matter” related to growth, profitability and risk;

2. A bold vision for how work will be performed and the future-state operating models needed to succeed (e.g., increased automation and skilled resources focused on higher-value tasks);

3. A framework for making strategic choices—prioritizing investments based on their alignment to the company purpose and their ability to deliver both immediate returns and sustainable competitive advantage;

4. Deep capabilities in talent development—recruiting, developing, retaining, and motivating high-potential staff; and

5. A culture that inspires and enables innovation and teamwork— significant organizational change will be required to instill a “disrupter” culture capable of adapting to and proactively driving constant change, and leaders will need to inspire creativity and promote increased risk-taking and innovation.

While it’s difficult to predict exactly what the future will look like, it is clear that the actuarial functions of the future will be leaner, more data-driven, and more technology-enabled. Actuarial leaders who take bold action today will reap the benefits and provide more value to the business going forward.

About the authors

MIKE HUGHES, IAN STERLING, and RAJU SAXENA are part of Ernst & Young LLP’s Advisory Services practice.

The views expressed by the authors are their own, and not necessarily those of Ernst & Young LLP or other members of the global EY organization.

References

[ 1] “What Is Robotic Process Automation?”; Institute for Robotic Process Automation & Artificial Intelligence; undated.

[ 2] The Future of Employment; Oxford Martine Programme on Technology and Employment; Sept. 17, 2013.

[ 3] Gartner Customer 360 Summit 2011; conference brochure; 2011.

[ 4] “Impact of Robotics, RPA and AI on the insurance industry: challenges and opportunities”; The Journal of Financial Perspectives: Insurance; EY; Volume 4, Issue 1; 2017.