Thursday, June 7, 2018

Big Data needs Big Actuaries

The American Academy of Actuaries recently published a monograph Big Data and the Role of the Actuary.

Some speculate that the Academy may also produce a monolith dedicated to Big Data as well.

Or maybe a monogram.

Either way, what is certain is that Big Data and the applicable statistical methods that come along with it are going to play a significant role in the actuarial profession.

And in order to handle Big Data, you need a Big Actuary.

While this was not the main point of the monograph, there are several factors that contribute to the need of a giant actuary.

Big Data is often in the Cloud

The Academy's monograph cites 5 "v's" relate to big data, the first two of which are Volume and Velocity.  Big Data happens 24/7 and the storage requirements are colossal, hence the need for the cloud.

Since the mid level cloud layer starts at 6,500 feet, only a mountain sized actuary can deal with this.

Many Bodies are Involved

The monograph lists several bodies that will be involved in the process, from various regulators to congress to the actuarial organizations.  One actuary alone would have a difficult time handling all these bodies.  A giant actuary however, might be able to. 

Quarterback Actuaries

Per the monograph:
Actuaries on these teams may be thought of as the subject matter experts. But actuaries may be positioned to be the quarterbacks of the Big Data teams.
An article from the blog 538 indicates that both height and weight have some positive correlations with success as a quarterback.   Extrapolating from here, if actuaries are to be the quarterbacks of Big Data, the bigger, the better.

No comments:

Post a Comment