From traditional models to machine learning

"From crystal balls to code: The actuarial seer’s glow-up"

Once upon a time, in the candlelit cubicles of actuarial towers, the Actuarial Seer sat hunched over parchment scrolls also known as Excel spreadsheets whispering incantations like “GLM with Poisson link” and “Mortality Table VBT 2015.” With a flick of their wand (or more accurately, a pivot table), they foretold the future of insurance premiums, credit risk exposures, enterprise-wide financial resilience and pension plans through sophisticated modeling, predictive analytics, and strategic risk management.

Their sacred tools?

• Mortality Tables were their Tarot cards revealing the fate of policyholders.
• Generalized Linear Models (GLMs) were their runes cryptic symbols that only the wise could interpret.
• Markov Chains were their pendulums swinging between states of health and wealth.
• Credibility Theory was their astrology chart balancing the stars of individual data with the constellations of the collective.
• Monte Carlo Simulations Their crystal ball foggy, but full of probabilistic promise.

But lol! The world changed.

The Seer upgraded. No longer confined to dusty scrolls and deterministic spells, they now wield the power of Machine Learning, a kind of techno-sorcery that even Merlin would envy.

• Decision Trees became their enchanted forests, each branching a path to underwriting wisdom.
• Neural Networks Their psychic hotline tapping into the collective unconscious of Big Data.
• Gradient Boosting Machines were their spellbooks each iteration a refinement of their predictive potion.
• Natural Language Processing let them divine meaning from the ancient scrolls of claim notes and legalese.
• Reinforcement Learning their magical familiar learning tricks from every reward and punishment.

And just like modern seer now uses virtual pendulums, digital rune generators and AI tarot apps, the Actuarial Seer now uses interactive dashboards, R and python scripts. Their robes may be replaced by hoodies, and their crystal balls by Graphics Processing Units, but their mission remains the same: to peer into the future and make sense of uncertainty.

So next time you see an actuary deep in thought, just remember they’re not just crunching numbers. They’re casting spells of statistical sorcery, one algorithm at a time.

You don’t need to be an actuary or a wizard to benefit from this transformation. Whether you're a business leader, insurer, pension fund manager, or just someone curious about how organizations manage risk in an unpredictable world, Actuaries are equipped to help you make smarter, faster, and more resilient decisions.

From assessing the profitability of products, to predicting customer behavior, to safeguarding financial systems against shocks, actuarial science is quietly working behind the scenes to keep things running smoothly.