We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.
The Hype Cycle is a visual representation of the excitement and development of technology over time, originally produced by Gartner. It is best shown with a visual:
In short, this cycle suggests that there is typically a burst of excitement around new technology and its potential impact. Teams often jump into these technologies quickly, and sometimes find themselves disappointed with the results. This might be because the technology is not yet mature enough, or real-world applications are not yet fully realised. After a certain amount of time, the capabilities of the technology increase and practical opportunities to use it increase, and teams can finally become productive. Roy Amara’s quote sums this up most succinctly – “We tend to overestimate the effect of a technology in the short run and underestimate in the long run”.
This research evaluates the current state and future outlook of emerging technologies on the actuarial profession over a three-year horizon. For the purpose of this report, a technology is considered to be a practical application of knowledge (as opposed to a specific vendor) and is considered emerging when the use of the particular technology is not already widespread across the actuarial profession. This report looks to evaluate prospective tools that actuaries can use across all aspects and domains of work spanning Life and Annuities, Health, P&C, and Pensions in relation to insurance risk. We researched and grouped similar technologies together for ease of reading and understanding. As a result, we identified the six following technology groups:
Machine Learning and Artificial Intelligence
Business Intelligence Tools and Report Generators
Extract-Transform-Load (ETL) / Data Integration and Low-Code Automation Platforms
Collaboration and Connected Data
Data Governance and Sharing
Digital Process Discovery (Process Mining / Task Mining)
Nicole Cervi, Deloitte Arthur da Silva, FSA, ACIA, Deloitte Paul Downes, FIA, FCIA, Deloitte Marwah Khalid, Deloitte Chenyi Liu, Deloitte Prakash Rajgopal, Deloitte Jean-Yves Rioux, FSA, CERA, FCIA, Deloitte Thomas Smith, Deloitte Yvonne Zhang, FSA, FCIA, Deloitte
Publication Date: October 2021
Publication Site: Society of Actuaries, SOA Research Institute