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07.03.2023

What Does ChatGPT Mean For The Actuarial Profession?

Introduction

ChatGPT is a large language model trained by OpenAI that has the ability to generate human-like text based on the context provided by preceding words or phrases. As a language model, ChatGPT has been trained on a large dataset of human-generated text and is able to generate text that is coherent, natural-sounding, and appropriate for a variety of contexts.

In this discussion, we will explore how ChatGPT or similar technology could potentially be used in the context of actuarial work, including tasks such as generating reports or summaries of data analyses, identifying and correcting data quality issues, and summarizing data to pick out the main trends and features. We have also discussed the limitations of ChatGPT or similar technology, including the fact that it does not have the ability to independently verify or evaluate data or information, and the importance of carefully reviewing and evaluating the output of the model before using it in any official capacity.

What does ChatGPT mean for the actuarial profession?

The overall impact ChatGPT will have on the actuarial profession is complex. Actuaries use mathematical and statistical techniques to assess and manage risks, often in the context of insurance and financial industries. While chatbots and conversational systems that use ChatGPT or similar technology could potentially be used in the actuarial profession, it would depend on the specific application and how the technology is integrated into actuarial workflows. It is also possible that the development and use of ChatGPT and similar technology could have broader implications for the insurance and financial industries, which could in turn affect the actuarial profession.

Actuaries should carefully consider the potential benefits and drawbacks of using ChatGPT or any other technology, and determine whether it aligns with their professional goals and the needs of their clients or stakeholders.

There may be potential benefits to using ChatGPT or similar technology in the actuarial profession, such as increasing efficiency, reducing the need for manual data entry or other repetitive tasks, and enabling actuaries to focus on more complex and value-added activities. However, it is important to carefully evaluate the suitability and reliability of ChatGPT or any other technology for the specific tasks and contexts in which it would be used, and to consider any potential ethical or legal implications. Actuaries should also be aware of the limitations of ChatGPT and similar technology, and ensure that they are used appropriately within the bounds of their capabilities.

In what way could actuaries use ChatGPT to be more efficient?

Some examples of how ChatGPT or similar technology could be used to support actuarial work include:

  1. Generating reports or summaries of actuarial analyses: ChatGPT or similar technology could be used to generate clear, concise, and accurate summaries of actuarial analyses or reports, potentially saving time and effort for actuaries who would otherwise need to write these summaries manually.
  2. Assisting with data entry or data processing tasks: ChatGPT or similar technology could be used to automate certain data entry or data processing tasks, potentially saving time and reducing the risk of errors.
  3. Providing support for customer service or other types of communication: ChatGPT or similar technology could be used to build chatbots or other conversational systems that can assist with customer service or other types of communication, potentially freeing up actuaries’ time to focus on more complex tasks.
  4. Providing assistance with complex calculations or modeling: ChatGPT or similar technology could potentially be used to assist with complex calculations or modeling tasks, potentially saving time and reducing the risk of errors.

How about an example of how ChatGPT can pick out interesting features from a data set?

Imagine that you have a dataset containing information about the age, gender, and income of a group of individuals. You want to use ChatGPT or similar technology to generate a summary of the data that highlights the main trends and features.

To do this, you could provide ChatGPT with the following input: “Please summarize the data in the following dataset: age, gender, and income for a group of individuals. Highlight any interesting trends or features that you observe.”

ChatGPT might generate the following summary in response:

“The data shows that the average age of the individuals in the group is 35 years old, with a standard deviation of 10 years. The gender distribution is roughly evenly split between male and female. The average income for the group is $50,000 per year, with a standard deviation of $20,000. An interesting trend in the data is that individuals with higher incomes tend to be older, with a correlation coefficient of 0.6. Another interesting feature is that the income distribution is skewed to the right, with a long tail of high-income earners.”

This summary highlights several interesting trends and features of the data, including the average age and income of the individuals in the group, the gender distribution, and the relationship between age and income. It also includes statistical measures such as the standard deviation and correlation coefficient, which provide additional context and insights into the data.

It is important to note that this is just one possible example of how ChatGPT or similar technology could potentially be used to generate a summary of a data analysis. The specific output of ChatGPT or similar technology will depend on the quality and quantity of the data, the context and goals of the analysis, and the specific capabilities of the technology.

Can ChatGPT write a new report, based on refreshed data and an old report?

To do this, you would need to provide ChatGPT with the appropriate input, such as the data from the previous year and the current year, as well as any relevant context or guidelines for the report. For example, you might provide ChatGPT with the following input: “Please generate a report comparing the data from last year to the data from this year. Include an overview of any trends or changes that you observe, and provide any relevant insights or conclusions.”

Based on this input, ChatGPT might generate a report that compares the data from the previous year to the current year, highlights any trends or changes that it observes, and provides insights or conclusions based on these observations.

It is important to note that the output of ChatGPT or similar technology will depend on the quality and quantity of the data, the context and goals of the analysis, and the specific capabilities of the technology. While ChatGPT or similar technology may be able to generate a report based on data from the previous year and the current year, it may not be able to fully understand or interpret the data in the same way that a human analyst would. As such, it is important to carefully review and evaluate the output of ChatGPT or similar technology before using it in any official capacity.

Here is an example of how ChatGPT or similar technology might generate a report based on data from the previous year and the current year:

Input:

“Please generate a report comparing the data from last year to the data from this year. Include an overview of any trends or changes that you observe, and provide any relevant insights or conclusions.”

Output:

“According to the data from last year and this year, there has been a significant increase in the average income of individuals in the group. Last year, the average income was $50,000 per year, while this year it has increased to $60,000 per year. This represents a 20% increase in income over the past year.

There has also been a slight decrease in the average age of the individuals in the group. Last year, the average age was 35 years old, while this year it has decreased to 33 years old. This is a small but notable trend, as it suggests that the group is becoming slightly younger over time.

One possible explanation for the increase in income is the strong economic growth that has been observed over the past year. This may have led to increased opportunities for individuals in the group to earn higher incomes.

Overall, the data from the past year and this year suggest that there are positive trends in both income and age for the group. These trends may be worth further investigation and analysis to better understand the underlying drivers and potential implications.”

This example shows how ChatGPT or similar technology could be used to generate a report that compares the data from the previous year to the current year, highlights any trends or changes that it observes, and provides insights or conclusions based on these observations. It is important to note that this is just one possible example of how ChatGPT or similar technology could potentially be used in this context, and the specific output will depend on the quality and quantity of the data, the context and goals of the analysis, and the specific capabilities of the technology.

Note that, in the example that I provided, the reference to strong economic growth over the past year was purely fictional and was included as a hypothetical explanation for the trend in income that was observed in the data. ChatGPT or similar technology does not have the ability to independently verify or evaluate economic data or trends, and the output of the model should not be taken as fact. The example was provided solely for illustrative purposes and should not be taken as a definitive or accurate representation of actual economic trends.

Also note that ChatGPT or similar technology would respond entirely based on the inputs that were provided. As a language model, ChatGPT is trained to generate text based on the context provided by preceding words or phrases. It does not have the ability to access external information or data, and it cannot independently verify or evaluate the accuracy or relevance of the inputs that it is given.

How could ChatGPT be used to help actuarial students study?

There are potentially many ways in which ChatGPT or similar technology could be used to help actuarial students study and prepare for exams. Some examples of how ChatGPT or similar technology could be used to support actuarial students include:

  1. Generating practice problems or exam questions: ChatGPT or similar technology could potentially be used to generate practice problems or exam questions based on specific topics or areas of study, potentially providing students with additional opportunities to test their knowledge and skills.
  2. Providing explanations or examples for complex concepts: ChatGPT or similar technology could potentially be used to provide explanations or examples for complex concepts or topics, potentially helping students to better understand and retain the material.
  3. Summarizing or synthesizing information from study materials: ChatGPT or similar technology could potentially be used to generate summaries or syntheses of study materials, potentially helping students to more efficiently review and retain the information.
  4. Providing additional resources or recommendations for study: ChatGPT or similar technology could potentially be used to provide recommendations for additional resources or study materials based on the specific needs and goals of the student, potentially helping students to tailor their studies to their individual needs.

It is important to note that ChatGPT or similar technology is not a replacement for the expertise and guidance of instructors and other professionals, and it should be used as a supplement to, rather than a substitute for, traditional methods of study and preparation. Actuarial students should carefully evaluate the suitability and reliability of ChatGPT or any other technology for their specific needs and goals before implementing it in their studies.

If this conversation were an article, how would ChatGPT summarise and conclude it?

To summarize and conclude this discussion, it is important to note that ChatGPT is a large language model trained by OpenAI that has the ability to generate human-like text based on the context provided by preceding words or phrases. While it has the ability to generate text that is coherent and natural-sounding, it does not have the ability to independently verify or evaluate data or information, and its output should not be taken as fact.

In the context of actuarial work, ChatGPT or similar technology could potentially be used to assist with certain tasks, such as generating reports or summaries of data analyses, or generating practice problems or exam questions. However, it is not a replacement for the expertise and judgment of actuaries or other professionals, and it should be used as a supplement to, rather than a substitute for, traditional methods of analysis and interpretation.

Actuaries and others working with ChatGPT or similar technology should carefully evaluate the suitability and reliability of the technology for their specific needs and goals, and should carefully review and evaluate the output of the model before using it in any official capacity.

Conclusion

In case it wasn’t obvious – although this final section was written by a human, every other paragraph in the article was written by ChatGPT (with a few minor edits to avoid repetition). Hopefully you agree that ChatGPT did a fairly good job at writing this article, but to add a few human observations, I would note that ChatGPT:

This last point isn’t surprising, but it does make for an odd kind of conversation; one in which I had to think carefully about how to phrase questions and in order to receive a direct answer to every question with little deviation from the topic.  This may take some getting used to. Reflecting on how using Google for the last 20 years has affected my ability to retain large amounts of information; I now wonder how my conversational skills may change if I continue to use ChatGPT. But those are just some of the many thoughts that ChatGPT brings to my mind; perhaps we should circle back to whether AI services like ChatGPT could replace an actuary?

 

Anonymous

February 2023