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A new series on The Exponential Actuary of the Future
The future of actuaries cannot be ascertained without looking at the macro "meta-trends" working in the larger scheme of things... In the fifth post of a new series on The Exponential Actuary of the Future, which outlines multiple scenarios for the future of the actuarial profession, we are undertaking a deep-dave into the actuarial and societal meta-trends.
- Industry redefined; any industry can enter any other industry now with decimation of most barriers to entry and bolder visions
- The future of smart: how AI and technology is creating an intelligent future
- The future of work: impact of sharing economy on work, emergence of soon-to-arrive machine economy and how will we adapt to these?
- Behavioral revolution: critical thinking from behavioral psychology/economics, sociology and philosophy is being brought out from the ivory towers into practical reality to nudge our behavior towards better and more sustainable outcomes in cost-efficient manners
- Empowered customers: customers demand from insurance the same experience as from big tech. There is hyper-personalization and fluid identities which rely more on peer approval/disapproval instead of paid advertisements. How will the businesses today give customers what they want?
- Urban world; AI is being applied to handle the enormous challenges facing urban cities, to make them smart cities. More and more challenges for humanity will be handled in the cities and their role in the future is both paramount and necessary.
- Health reimagined: technology is coming to conquer our extremely escalating health challenges
- Resourceful planet: can we overcome scarcity and reach abundance instead of greed and inequality?
- Wave 1 (to early 2020s): algorithmic
- Wave 2 (to late 2020s): augmentation
- Wave 3 (to mid-2030s): autonomy
- The first side argues automation is not something to be scared of and it has always been like that. We have always changed jobs due to technology from discovering fire to modern industry and machinery. Most of people were farming but changed to industries and then to the service industry. Fears from technology were aroused from Aristotle to Keynes but new jobs were invented and created to replace those displaced. This automation wave is beneficial and will allow us to leave the worst of jobs like bomb disposal, sewage treatment etc. and work that is routine and mundane will be automated away from the offices so that humans can focus on higher-order skills like being humans, creative problem solving, polymath broad focus over many subjects and so on. We underestimate capitalism. It was predicted to have ended long ago; it didn’t and it morphed into more totalitarian and pervasive forms. Capitalism will create more meaningless, pointless jobs. As David Graeber argues in “Why Capitalism creates pointless jobs”: “It’s not entirely clear how humanity would suffer, were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.) Yet apart from a handful of well-touted exceptions (doctors), the rule holds surprisingly well.” Stability was the usher of previous epochs but relentless change is the mantra in our capitalist epoch. Relentless change in the means of production and technology is unavoidable.
- The second side argues that this time it WILL be different because, for the first time, we will have machines that can think on their own. All previous technologies had no minds of their own and worked in specific ways that they were designed for only. And then the discourse shifts from automation to AI apocalypse where AI can destroy humanity. Again, this point of view seems outlandish but all of these thinkers - from Elon Musk to Stephan Hawking to Bill Gates - are not talking about the narrow, weak AI that we have right now and that only does specific tasks; they are talking about strong general AI that can learn on its own, teach on its own, become a global hive mind and be self-aware of itself. And then there is tech singularity; quantum computing, machine teaching, global mind, AI blockchain marketplaces combining to form general AI. In this scenario, any job that a human can do, AI can do better. What is the solution then? Their proposal is to merge humans with machines in Brain Computer Interfaces. They argue that the only way to survive is merging of technology with society and biology. Sociobiology is the future due to nano technology, genetic engineering, neural lace etc. our biology is the ultimate barrier and evolution is too slow; we will take the next step by merging technology with biology. In that case, if we have BCIs to make us have 10,000 IQ that arguing about future of actuarial profession becomes totally obsolete and pointless as we will be completely different human beings then.
- Problem is distributional not technological; good utopia of creative play and no-work abundance society can be created through proper social policies that do not institutionalise financial inequality and greed. From Stephan Hawking to Jeff Bezos to Bill Gates, many notable people have explicitly voiced their concerns that technology like AI will tear down the fabric of society unless we start improving our social policies like introducing Universal Basic Income, taxing robots and so on. Sweden has such a welfare system that creates optimum conditions for innovation, pushing ahead in technology and caring about people instead of jobs.
- More pressure to learn programming, data science, big data and AI
- Improving soft skills and communication will be crucial
- Those at entry level or those that stopped learning long ago will start getting displaced. Polarisation will enter as top actuaries are hired to supervise the software systems and there is no longer need for entry-level actuaries (as all of their work has been automated)
- Focus on continuous learning; no longer one fixed path towards qualification, as qualifying alone won’t mean much. Burnout and early retirement might peak within the top actuaries.
Future of work and education