LMA Survey on How AI Can Enhance Actuarial Risk
The Lloyd’s Market Association (LMA) has released findings from a survey on the use of artificial intelligence (AI) and machine learning (ML) in actuarial and risk functions. This research, conducted with Barnett Waddingham, offers a clear look at current attitudes, challenges, and opportunities within the insurance sector. The full survey is available here.
Key Findings
- Scepticism around AI and ML persists. Many professionals expressed concerns about regulation, the difficulty in validating AI outputs, and questions around accuracy and reliability. A significant number also pointed out a shortage of AI and ML expertise in their organisations. There's a strong demand for practical guidance on responsible AI use that balances innovation with compliance. The use of third-party AI tools raises regulatory worries, slowing adoption.
- Actuarial professionals more optimistic. Due to the quantitative nature of actuarial work, many see clear benefits in AI and ML tools. Risk professionals, relying on less quantitative data, tend to be more cautious about investing in these technologies.
- Data quality is the top priority. The survey highlights that AI models depend heavily on the quality of the data they are trained on. Continuous improvement, transparency, and interpretability are also critical. The report suggests that if human experts can adapt to imperfect data, AI can too—potentially more efficiently over time. Imperfect data should not block progress.
- Full potential remains untapped. Many use AI and ML mainly to support existing processes such as claims classification and trend identification in pricing and reserving. Around half of respondents have limited or no implementation of these technologies.
Sanjiv Sharma, Head of Actuarial and Exposure Management at the LMA, emphasised the need for deeper adoption: “Currently, AI and ML are focused on automation and efficiency. However, firms that integrate these tools effectively can gain a competitive edge and make better strategic decisions. Balancing benefits with compliance and ethics will be key for Lloyd’s participants to maintain their leadership in global insurance.”
Wan Hsien Heah, Partner and Head of General Insurance at Barnett Waddingham, added: “This survey aims to spark discussions on AI and ML adoption. Though challenges remain, it points towards defining market practices for implementing these technologies in actuarial work within general insurance.”
The report includes insights from respondents representing about 55% of market stamp capacity, along with six in-depth interviews. It follows the LMA’s 2024 discussion paper, Artificial Intelligence and the Lloyd’s Actuary: A Snapshot of Opportunity and Risk.
For insurance professionals interested in gaining practical AI skills that align with industry needs, explore relevant courses on Complete AI Training. Building expertise can help overcome the skill gaps highlighted by the survey.