Edition

Operationalizing Generative AI for Actuaries

Background and Purpose

Over the past year, following the introduction of ChatGPT in November of 2022 and Stable Diffusion in August 2022, there has been an enormous amount of interest, development, and research done in the generative AI space. This work has resulted in a vast number of options for how to utilize these resources.

Actuaries may likely be posed to substantially benefit from these new generative AI tools, but the question of how best to utilize them is still an open question. The goal of this work is to develop a survey of the generative AI landscape of tools and services and provide a guide to the benefits, risks, and requirements of each one in terms of hardware, privacy, technical expertise, and other relevant characteristics.

Research Objective

The Actuarial Innovation & Technology Program Steering Committee (AITPSC) is seeking researchers to produce a report that discusses the operationalization of generative AI tools for actuaries, including the pros and cons of each option, the general steps required to put them into production, and the associated risks. The main objective of this research report is to explore the practical implementation of Generative AI (GenAI) for Actuaries.

The report will also provide an overview of the technical and privacy risks associated with the adoption of GenAI in actuarial work, with a focus on providing a consistent quality of service, ensuring accurate and relevant responses, and maintaining control of confidential information. Similarly, the governance and oversight considerations of the production use of generative AI tools should also be discussed.

The research format will include a comprehensive comparison of both open-source and closed-source options, both local and cloud options, and the various models available as well as the various platforms available to run models.

The research report should discuss the major considerations an actuary should consider when utilizing generative AI. It should highlight areas not limited to:

  • Model Comparison: The report will survey the generative AI model landscape and explain the capabilities, benefits, drawbacks, and risks of the various models available.
  • Local vs Cloud Computing: The report will explain the technical considerations of running models locally, both including hardware and software, and compare the benefits and costs of running models using cloud computing resources.
  • Open vs Closed-Source: The report will provide a comprehensive overview of the benefits and drawbacks of the closed-source and open-source ecosystems of models and tools, highlighting the benefits and drawbacks of each and explaining the situations in which one would be desirable over the other.
  • Governance and Privacy Considerations: Along with the technical requirements of implementing generative AI models, the report will also provide the governance mechanisms required of an organization to properly monitor and control the use of generative AI models.

RFP Schedule:

  • Notification of intent to submit proposal: 2Q24
  • RFP Response Due: 2Q24
  • Project Kick-off with PSC (Tentative): 3Q24
  • Draft report due for PSC review (Tentative): 3Q24
  • Report due for SOA (Tentative): 3Q24
  • Publication and Release: 4Q24

Proposal

To facilitate the evaluation of proposals, the following information should be submitted:

  • Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
  • An outline of the approach to be used (e.g., literature search, model, survey, interviews etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, reusability and limitations of the analysis.
  • A description of the expected deliverables and any supporting data, tools, or other resources. Consideration should be given to the preference for externalized data that can be included in the AITPSC’s data repository.
  • Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
  • A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The AITPSC is interested in completing this project in a timely manner, with an aim to publish the paper in Q4 2024 or earlier. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  • Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

Selection Process

The PSC will oversee the selection of projects. The PSC will review each proposal and is responsible for recommending proposals to be funded. Input from other knowledgeable individuals also may be sought, but the PSC will make all final decisions, subject to SOA leadership approval. SOA will provide staff actuarial support to develop and publish the final material.

Questions

Any questions regarding this RFP should be directed to research-ait@soa.org.

Notification of Intent To Submit Proposal

If you intend to submit a proposal, please e-mail written notification by April 12, 2024, to research-ait@soa.org.

Submission of Proposal

Final proposals for the project should be sent via e-mail by May 1, 2024, to research-ait@soa.org.

Note: Proposals are considered confidential and proprietary.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries and the researcher.

The SOA and AITPSC reserve the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The SOA and AITPSC also reserve the right to redirect the project as is deemed advisable.

The SOA and AITPSC plan to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The SOA and AITPSC may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the SOA and AITPSC in publicizing or promoting the research and responding to media requests.

The SOA and AITPSC may also choose to market and promote the research to members, candidates, and other interested parties. You agree to perform promotional communication requested by the SOA and AITPSC, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.