Big Data

What Is Big Data?

“Big Data” has become a common term and topic of discussion throughout the world. For our purposes, big data refers to the collection of extremely large data sets that may be analyzed using advanced computational methods to reveal trends, patterns, and associations. Big data can support numerous uses, from search algorithms to InsurTech. The definition of big data generally includes the “5 V’s”:

Volume Large amounts of data are collected and require processing.

Velocity Data is available and must be processed at lightning speed, frequently instantaneously.

Variety The data being used comes in different forms.

Veracity The reliability of the data is not uniform.

Value The data being extracted must be usable or be able to be monetized.

From Big Data and the Role of the Actuary.

Relevant standards of practice

ACTUARIAL STANDARD OF PRACTICE NO. 12: Risk Classification

ACTUARIAL STANDARD OF PRACTICE NO. 23: Data Quality

ACTUARIAL STANDARD OF PRACTICE NO. 25: Credibility Procedures

ACTUARIAL STANDARD OF PRACTICE NO. 41: Actuarial Communications

ACTUARIAL STANDARD OF PRACTICE NO. 56: Modeling

DSAC Releases Issue Paper on Big Data Terminology

The Data Science and Analytics Committee released an issue paper, Defining Big Data. The paper is intended to build a shared language and concepts of big data and associated themes for the actuarial community, regulators, and other interested parties.

DSAC Issue Brief Examines Data Bias

The Data Science and Analytics Committee (DSAC) released an issue brief, An Actuarial View of Data Bias: Definitions, Impacts and Considerations. The issue brief—the first in a new DSAC series called “Additional Considerations in Data Science”—looks at the key types of data bias that actuaries may encounter and focuses on the kinds of biases found in modeling data and the implications for algorithmic outcomes.

DSAC Releases Issue Brief on Big Data in Actuarial Modeling

The Data Science and Analytics Committee (DSAC) released an issue brief, Big Data and Algorithms in Actuarial Modeling and Consumer Impacts. It outlines big data issues confronting actuaries and initiates discussion on how big data and artificial intelligence impact the consumer insurance experience, and covers how insurers and regulators can collaborate to resolve potential issues. (October 14, 2022 )

DSAC & RETF Release Major Issue Brief on Correlation and Causation

The Data Science and Analytics Committee, in partnership with the Racial Equity Task Force, released a major issue brief, An Actuarial View of Correlation and Causation - From Interpretation to Practice to Implications. (July 06, 2022 )

DSAC Presents to NAIC CASTF Book Club on Big Data and Algorithms Issue Paper

The Academy’s Data Science and Analytics Committee (DSAC) presented to the National Association of Insurance Commissioners’ (NAIC) Casualty Actuarial and Statistical (C) Task Force (CASTF) Book Club on their recent major issue paper, Big Data and Algorithms in Actuarial Modeling and Consumer Impacts. (January 26, 2022 )

Academy Releases Major Issue Paper on Big Data and Consumer Impacts

The Data Science and Analytics Committee released a major issue paper, Big Data and Algorithms in Actuarial Modeling and Consumer Impacts. (November 08, 2021 )

Data Science and Analytics Committee Comments to Federal Agencies on AI

The Data Science and Analytics Committee submitted comments in response to a joint request for information and comment from several federal agencies regarding financial institutions’ use of artificial intelligence (AI) and machine learning. (June 30, 2021 )

DSAC Update to NCOIL Special Committee on Race In Insurance Underwriting

Data Science and Analytics Committee (DSAC) Chair, Dorothy Andrews, addressed the issue of Race in Insurance Underwriting in a meeting convened by the National Council of Insurance Legislators and shared an update on the DSAC's work on the topic. (December 09, 2020 )

Dorothy Andrews Comments to NCOIL Special Committee on Race In Insurance Underwriting

Big Data And The Role Of The Actuary

While the use of Big Data in the property and casualty insurance area is more developed than in some of the other areas of actuarial practice, significant advances have been made in recent years in the use of Big Data in health and life insurance. Similar advances in the pension area have not been as noticeable. However, it can be expected that over the next decade, all areas of actuarial practice will be significantly impacted by the use of Big Data. (October 17, 2019 )