Model Validation and Governance for AI/ML in Actuarial Applications
Actuarial Science, Artificial Intelligence, Machine Learning, Risk Assessment, Model Validation, Fraud Detection, Governance Frameworks.
There has been a sea change in the way risk assessment, underwriting, fraud detection, and claims processing are conducted as a result of the integration of actuarial science with AI and ML. Supervised, unsupervised, and reinforcement learning were incorporated into traditional actuarial models to increase the accuracy and operational efficiency of predictive problems. The use of data analytics and, thus, AI for actuaries offers the opportunity to extract useful information and discover better decision-making from huge and intricate data sets to better create insurance, social security, healthcare, and financial risk management. Despite this, there are challenges to the adoption of AI, namely, model validation (algorithmic bias), regulatory compliance, and ethical considerations. SR11-7 and OSFI E-23 are important governance frameworks to maintain transparency, accountability and reliability of AI-based actuarial models. In this paper, I study what AI/ML techniques are used in actuarial science, what impact they have on how the industry works, and the importance of good model validation frameworks. In addition, it demonstrates how AI may aid in the enhancement of data quality, speed up the analytical procedures, and initiate fresh modeling ways. As AI continues to develop, there will be an increased need for actuarial science to research and put in place standardized governance to establish the ethical and effective use of AI.
"Model Validation and Governance for AI/ML in Actuarial Applications", TIJER - TIJER - INTERNATIONAL RESEARCH JOURNAL (www.TIJER.org), ISSN:2349-9249, Vol.12, Issue 4, page no.a168-a173, April-2025, Available :https://tijer.org/TIJER/papers/TIJER2504026.pdf
Volume 12
Issue 4,
April-2025
Pages : a168-a173
Paper Reg. ID: TIJER_157327
Published Paper Id: TIJER2504026
Downloads: 000284
Research Area: Science and Technology
Country: -, -, India
ISSN: 2349-9249 | IMPACT FACTOR: 8.57 Calculated By Google Scholar | ESTD YEAR: 2014
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 8.57 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator
Publisher: TIJER (IJ Publication) Janvi Wave
