Actuarial Post releases April 2019 issue

The insurance industry faces disruption as artificial intelligence transforms underwriting, yet many firms are still focused on a more immediate issue: preparing for Brexit.

Regulators urge insurers to plan for Brexit fallout

With Easter approaching and the UK’s departure from the European Union unresolved, the Financial Conduct Authority is pushing general insurance firms to finalize contingency plans. Nausicaa Delfas, the FCA’s Executive Director of International, stated the need for operational continuity.

“Firms must ensure they can continue servicing customers without interruption, regardless of the outcome,” Delfas said in the April edition of Actuarial Post. The warning follows concerns over the potential loss of passporting rights, which currently allow insurers to operate across the EU without separate licenses in each member state.

The FCA has not set formal deadlines, though industry observers expect stricter enforcement if a no-deal scenario occurs.

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The magazine also highlights the ongoing issue of Guaranteed Minimum Pension equalisation, a long-standing problem for pension schemes. Mark Williams, Principal & London Retirement Practice Leader at Buck, said many trustees underestimate the complexity of the required calculations. “The pitfalls are administrative as much as actuarial,” he said. “A single error in data reconciliation can derail an entire project.”

AI enters underwriting, but human oversight remains

While regulators address Brexit, insurers are also exploring AI-driven underwriting. Graham Elliott, CEO of Azur Underwriting, said the technology will soon become standard, particularly in personal lines like home and auto insurance. “The tools exist,” he wrote. “The challenge is whether firms will use them to reduce costs or improve accuracy.”

Early results vary. Some companies have cut processing times by 40%, while others see little benefit, often due to poor data integration. The main obstacle isn’t the algorithms but the quality of the data feeding them. Insurers relying on outdated systems risk amplifying errors rather than fixing them.

The move toward automation raises questions about the future of actuaries. Tom Murray, Head of Product Strategy at Exaxe, said demand for traditional skills may decline, but professionals who can interpret AI insights will be in demand. “The role isn’t disappearing,” he wrote. “It’s changing.”

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That change is evident in the rise of master trusts, which consolidate smaller pension schemes under single providers. Dale Critchley, Policy Manager at Aviva, noted these arrangements offer cost savings but al

The April Actuarial Post makes clear that handling these issues will determine which firms succeed.

A recent insurance acquisition highlights how companies are positioning themselves for these shifts.