Using Artificial Intelligence as Actuarial Tools Spurs CAS Research

The Casualty Actuarial Society’s Risk Working Group is issuing a Request for Proposals (RFP) seeking research related to the use of AI in actuarial work. Compensation is up to $25,000. Proposals must be submitted by Tuesday, March 18, 2025.

Research Problem

The public release of ChatGPT and the GPT store has opened a wide range of possibilities for actuaries. Throughout 2023 and 2024, news reports of financial institutions and legal professions supplementing human work with AI has made headlines regardless of being characterized in a positive or negative manner. Could actuaries do well by automating certain aspects of their work through the use of analytical potential of ChatGPT or a similar tool? This research is attempts to bring this to reality.

Proposal and Work Product Requirements

We are seeking researchers to develop a custom AI tool (GPT or equivalent from other AI platforms) tailored for P&C actuarial work. The goal is to develop an AI tool that can perform basic actuarial work such as reserving, pricing or other analytics. The AI tool should refer to published methods by the Casualty Actuarial Society. The final work product should be able to perform a rudimentary analysis from a reasonably formatted data input. For instance, ChatGPT responses tend to describe the methodology rather than actually performing detailed analysis.

The intended users of the AI tool would be actuaries attempting to perform the same tasks. The proposed AI tool should be able to:

• Accept and comprehend standard data input (such as triangles) without additional processing by users.
• Follow a particular method if prompted, and if unprompted, determine the best method based on availability of data, appropriateness of method or other criteria.
• Produce numerical analysis results if data is supplied with a prompt.
• Output detailed analysis steps if prompted.

The initial research proposal should provide the following:

• A clear outline of the type of actuarial problem that the AI tool will address challenges in reserving, ratemaking or reinsurance that will be performed in a time frame including milestone dates.
• Estimated out-of-pocket expenses (such as subscriptions or cloud fees or both) necessary to complete the work.
• Resumes of the researcher(s), indicating how their background, education and experience bear on their qualifications to undertake the research.
• Explain how the researcher plans to evaluate the output. Such evaluation should be quantitative and could either be derived from formula-driven methods, historical results, the researcher's own actuarial analysis, or other benchmarks.

Upon completion of the research, the researcher should deliver the following:

• AI tool similar to a custom GPT
• Sample prompts as a guide to new users of the tool
• A research paper documenting the development of the AI Tool and the quantitative evaluation of the Tool’s output. Authors will be required to upload their final paper electronically in the CAS’s Scholar One system.
• An executive summary (two-three pages) that would be suitable as a blog post or magazine article. This summary should highlight the key themes of the tool and be understandable by a non-technical audience.

The CAS contract will be awarded to the respondent who is best able to perform the work as specified herein. If the group determines that no proposal meets the requirements of the RFP, then no contract will be awarded. Receipt of proposals will be acknowledged in a timely manner. Respondents who are not awarded the contract will be informed shortly thereafter.

Interested researchers should submit their proposals via email and any questions to Elizabeth Smith, CAS director of publications and research.

Schedule for Project Completion

1. Proposal Deadline
   By Tuesday, March 18, 2025, researchers should submit a one- to two-page proposal that includes a short description of the topic(s) to be addressed and the approach to be taken. Proposals should be emailed to Elizabeth Smith, director of publications and research, with “2025 Risk Working Group GPT Proposal” in the subject line of the message.
2. Proposal selection
   By Friday, April 18, 2025, the Risk Working Group will accept or reject proposals. The number of accepted proposals may be limited. Researchers will be contacted shortly following the selection process.
3. Monitoring Progress
   The selected researcher(s) and working group review team will establish a mutually agreeable schedule to check progress on the GPT project.
4. Prototype Due
   By Monday, June 16, 2025, a prototype of the completed GPT should be submitted to the working group review team.
5. Final Project Completion
   Date By Monday, July 14, 2025, a prototype of the completed GPT should be submitted to the working group review team.

Compensation

Compensation to researchers will be commensurate with the time required to carry out the work. Respondents should include an estimate of cost in their proposals. Costs of the proposal are encouraged to include considerations for the use of subscriptions to GPT developing sites such as OpenAI. Total cost should not exceed $25,000.

Presentation, Ownership and Publication of Report

As a condition of selection, the CAS requires that all right, title, and interest, including copyright and patent, in and to the report and executive summary be owned by the CAS. The selected researcher/research team must sign a formal research agreement that assigns all such rights to the CAS. In any publication of the report and summary, the researcher(s) will receive appropriate credit with regard to authorship. The CAS may publish the report and summary in their entirety, or any sections thereof, in any format and medium as it finds fit, including but not limited to CAS publications, and electronic versions such as on its Web site or physical storage media.

To aid research adoption, the CAS encourages the final work product’s code, specification and data be placed in the CAS’s GitHub repository, https://github.com/casact, under the MPL2.0 license (as applicable). The researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.

About the Casualty Actuarial Society (CAS)

The CAS was organized in 1914 as a professional society for the promotion of actuarial and statistical science as applied to insurance other than life insurance, such as automobile, liability other than automobile, workers compensation, fire, homeowners, commercial multiple peril, and others. Such promotion is accomplished by communication with those affected by insurance, presentation and discussion of papers, attendance at seminars and workshops, collection of a library, research, and other means. The membership of the CAS includes over 10,000 actuaries worldwide, employed by insurance companies, industry advisory organizations, national brokers, accounting firms, educational institutions, state insurance departments, the federal government, and independent consultants.

About the CAS Risk Working Group

The CAS Risk Working Group addresses actuarial issues of property and casualty insurance risk modeling, quantification, theoretical research and applicational methods in capital modeling, pricing, and reserving. The working group is charged with proposing, supporting and promoting innovative research and practical projects that enable the evaluation of risk, as well as with connecting CAS membership with the results of our supported research and projects.