7 October 2024
The Financial Reporting Council (FRC) has published revised Technical Actuarial Guidance: Models, to support the growing use of Artificial Intelligence and Machine Learning (AI/ML) techniques in actuarial work.
The updated guidance aims to support practitioners applying the principles-based Technical Actuarial Standard 100 (TAS 100) when using these techniques, ensuring the continued production of quality actuarial work in this rapidly evolving field.
The new guidance provides examples relating to model bias, understanding and communication, governance, and stability when using AI/ML models in technical actuarial work. It emphasises that TAS 100 is applicable to AI/ML models used in actuarial practice and enables actuaries to be well-positioned to produce quality work using these advanced techniques while carefully considering associated risks.
The FRC’s Executive Director of Regulatory Standards, Mark Babington, said:
“As the use of artificial intelligence and machine learning increases in actuarial work, it remains essential to keep pace with the rise of new technologies and emerging opportunities. Practitioners also need to ensure associated risks are being appropriately managed, and today’s updated guidance will help actuaries navigate these challenges while producing quality actuarial work.”
Read the revised Technical Actuarial Guidance: Models