By Zora Law
While rereading one of my family’s favorite children’s books at bedtime the other night, I noticed a striking analogy between artificial intelligence (AI) in education and the title character in Creepy Crayon! by Aaron Reynolds.
In this story, the magical, cool-looking purple crayon helps Jasper Rabbit earn better grades on tests and win the prize for best drawing. When Jasper senses that something is off, he decides to stop carrying the crayon with him. However, it comes back, even leaving a message on the mirror: “YOU NEED ME!”
Meanwhile, I was reading the 2025 MIT Media Lab study, Your Brain on ChatGPT, which illustrates in scientific terms what the “magical crayon” is doing in terms of cognitive debt.
I told my 9-year-old son that AI can be the “creepy crayon” for us if we let it do all the work. He did not want to agree with me, but it was definitely a good story for us to reflect on our own use of and reliance on AI.
As I ponder what the world will become with the revolutionary development of AI, I find myself thinking about the critical skills that will be needed going forward. Below are five points I consider vital for the next generation of actuaries:
Critical Thinking
Actuaries are trained to be problem solvers. Pure mathematical problems typically name well-defined closed-form solutions. But, in everyday business situations, there is rarely a single simple solution, nor can we be certain that we have considered all variables.
We often categorize this uncertainty into model risk, parameter risk, and process risk. Quantifying these risks is difficult; recognizing our cognitive blind spots is harder still. In his book Thinking, Fast and Slow Daniel Kahneman describes our brains running on two tracks. System 1 operates through automatic mental shortcuts, and System 2 requires conscious effort.
We should practice engaging more of System 2 in our thinking and become familiar with cognitive biases, such as confirmation bias, hindsight bias, and recency bias. In an AI era, this matters even more: AI output can often feel right even when it has significant errors or hallucinations.
Actuaries consistently demonstrate critical thinking by integrating robust risk-management principles and strong business acumen into each engagement.
I sat for my final set of actuarial exams during the 2008 financial crisis. I was glued to the news—watching the collapse of Lehman Brothers, tracking the cascade of bank bailouts, and wondering what could have prevented such widespread failure.
These events highlighted the importance of enterprise risk management (ERM) and robust regulation in preventing similar crises in the future.
At its core, ERM is a holistic, top-down approach to assessing the complexity of risks within an organization. One of the most critical aspects is building a risk culture: Everyone should participate in identifying, assessing, and managing risks and opportunities. This ERM framework is vital to ensure that we are on the right path to achieving our goals. It also creates a shared language for uncertainty—something spreadsheets and models alone cannot provide.
As John Reed, former Citibank executive, put it in a 2010 interview with the Financial Crisis Inquiry Commission, “Why does a car have brakes? A car has brakes so that you can go fast.” Risk control helps us move forward with confidence.
As mentioned above, actuaries may want the simplest, elegant solution in a pricing or reserving study. However, without considering the external environment in which these analyses are set, we are not addressing the issues properly. A model can be internally consistent but still wrong for the business purpose.
The external environment is a catch-all term that includes commercial issues such as competition, regulation and legislation, environmental and geopolitical issues, social and economic forces such as inflation and unemployment, as well as technological and lifestyle trends. As we think through these items, we are building the business acumen needed in our jobs.
“While AI can accelerate analysis, it cannot accept accountability or ensure that the results are responsible, transparent, and defensible. Increasingly, that will be a key role for the actuarial profession in the AI age.“
Ethics and Professionalism
According to Laura Hanson, chairperson of the Actuarial Standards Board, “As actuaries, we’re often relied upon to provide objective, data-driven insights that influence major financial decisions. Without a strong commitment to professionalism, trust can quickly erode.”
This commitment sets us apart from algorithms in the age of AI. We are members of a profession committed to upholding its highest standards in service to society. This is demonstrated through our Code of Professional Conduct and the actuarial standards of practice. Accountability exists through the Actuarial Board for Counseling and Discipline, which helps guide members through various situations and recommends disciplinary actions when the rules are violated.
While AI can accelerate analysis, it cannot accept accountability or ensure that the results are responsible, transparent, and defensible. Increasingly, that will be a key role for the actuarial profession in the AI age.
Empathy and Authenticity
In today’s remote world, much of our communication has become purely transactional. We can get a lot of things done without talking to another person in real time.
Think about your own experience as a consumer. When you phone a utility company to report an issue or seek medical advice from a nurse, would you rather be handled by an automatic virtual assistant, or speak with a real person on the other side of the line? Even if that representative cannot solve every issue on the spot, you value the chance to be heard and understood.
Our clients and teammates are no different. They look to us not only for technical answers, but also for empathy, context, and reassurance. Active listening and understanding are needed to build trusting relationships. However, these skills do not arrive via a “download” button. We must practice them regularly to improve our listening and understanding of each other.
Google’s Project Aristotle provides compelling evidence. In studying how to build highly effective teams, researchers found that the single most important factor was not having the most intelligent leader; rather, it was psychological safety. In other words, team members want to feel safe taking risks and being vulnerable with each other. This is such a stark contrast against our pursuit of AI, in which we think AI will be the most intelligent and effective tool in the workplace. In reality, it is people—it is the connections we make—that matter most in our lives and in our careers.
Perseverance and Self-Discipline
When virtually any fact can be summoned with a swipe or a voice command, it is fair to ask: Do we still need to commit information to memory? Have we begun outsourcing our brainpower to AI?
Have you ever wondered why, if the first handheld calculator was invented in 1967, children still need to learn the multiplication tables today?
It is effort-based learning that we need to focus on. We are not competing with AI—such a competition would certainly prove futile. However, we should be competing with ourselves.
Each day, are we expanding our knowledge, deepening our wisdom, and uncovering fresh insights? The process matters as much as the outcome. As many parents remind their children, it is the journey—not just the destination—that shapes character and capability.
In an era when smartphones, email, and streaming platforms are always at arm’s reach, many of us find our boundaries slipping. Notifications ping during family dinners, urgent messages intrude on weekends, and late-night binge-watching erodes the quality of our sleep. No wonder stress levels have risen and younger generations report historically high rates of anxiety, as suggested by Jonathan Haidt in his book The Anxious Generation.
As we learn in economics, everything has a utility curve. The curve often follows the law of diminishing marginal utility. In other words, most things in life are most enjoyable in moderation, but overconsumption can take a toll.
Neuroscience emphasizes the importance of homeostasis—the body’s tendency to maintain internal balance. Just as many biological systems function best within healthy ranges, excessive stimulation or deprivation can have unintended consequences.
Time and attention are scarce resources. If we treat them carefully, we can prevent algorithms from capturing our attention and dictating our routines.
Curiosity and Creativity
We are constantly fed information and stimulation from the digital world in today’s attention economy. When was the last time we paused long enough to ask ourselves deeper questions—about our work, our assumptions, or the broader impact of our choices? Do we regularly connect the dots between what we do, why we do it, and how it shapes the people and communities we serve?
Curiosity is the catalyst for that type of thinking. It invites us to admit what we do not know, to risk sounding naïve, and to follow a line of inquiry wherever it leads.
Children embrace this instinct naturally; adults, conditioned by social norms and professional expectations, sometimes suppress it. Research suggests that some forms of curiosity may decline with age unless they are actively cultivated. Can we reverse that trend?
Actuaries are a highly specialized profession. We train to be experts in insurance and risk management. However, being a specialist can sometimes limit our creativity in generating new ideas and novel solutions.
In his book Range: Why Generalists Triumph in a Specialized World, David Epstein observes that many top performers spend a “sampling period” early in their careers. They explore multiple disciplines, accumulate seemingly unrelated skills, and later cross-pollinate those experiences to fuel innovation. This breadth of knowledge supports what psychologists call divergent thinking—the ability to generate multiple ideas and make connections across domains—enabling professionals to see patterns, borrow concepts, and craft novel solutions that narrowly focused experts might miss.
Brainstorming, keeping a journal, freewriting, and mind mapping are all ways to stimulate divergent thinking. Note that these are inward-looking activities and require our mental efforts.
We should not rely on AI to replace this important training in creativity. As the MIT study suggests, there may be a cognitive debt associated with overreliance on AI. Cognitive debt defers mental effort in the short term but results in long-term costs, such as diminished critical inquiry, increased vulnerability to manipulation, and decreased creativity.
In other words, we should seek ways to be lifelong learners. I would encourage you to broaden your horizons from actuarial science into another subject, whether economics, literature, or astronomy. Such exploration helps us understand the external environment more fully and become more creative thinkers in a rapidly diversifying world.
In summary, understanding the importance of perseverance, doing difficult work ourselves, setting boundaries, and practicing self-discipline in daily life are all things we should do.
Staying curious, asking questions, and connecting the dots between what we do and how it impacts others strengthen both our thinking and our judgment. Likewise, upholding our highest professional standards and using a risk management framework, business acumen, along with critical thinking, should guide our actuarial analysis.
Finally, being genuine and building real, trusting relationships with the people around us remains one of the most rewarding aspects of both life and work. These skills and experiences should not be replaced in the age of AI.
Zora Law, MAAA, FCAS, FIA C.Act, is a lead actuary at Airbnb.