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Catastrophe Modelling Careers – a view from the entry level

16th September 2020

Recently, my colleague Vasiliki interviewed Alan Godfrey, Head of Group Casualty & Cyber Exposure Management at Axis Capital and long-standing member of the London Market’s catastrophe modelling and exposure management community. The primary focus of their conversation was the effect of the pandemic upon the insurance and catastrophe modelling industry as well as those employed within it. For me, one of the most important points that came from the discussion was Alan’s concern over the attraction of junior talent to the field.

As a specialist in this more junior end of the market, I would in some ways be inclined to agree with Alan’s concern that, “The industry has always had an image problem recruiting bright new talent”. It has frequently been the case that when speaking to new graduates considering a move into the industry, few of them realise how well suited they could be. This shouldn’t be the case though – I’ve placed plenty of entry level candidates into roles with various London Market clients, all of which have really enjoyed themselves and are well on their way to building successful careers.

I thought it might be worth catching up with a few, to allow them to shed some light on their experiences so far:

 

What first attracted you to catastrophe modelling?

  • H – Having thoroughly enjoyed the weather aspects of my geography undergraduate degree and then my masters in meteorology, catastrophe modelling really stuck out to me as it would enable me to continue developing my passion for natural catastrophes such as earthquakes and hurricanes, whilst working with real life scenarios. The insurance industry alone is crucial to the economy and with climate change becoming a more prevalent problem, catastrophe modelling within the insurance industry is both exciting and relevant.
  • L – I was always interested in natural hazards at school, it was one of the only subjects that really caught my attention and made me curious to learn more. From there I decided to study Geography at university, but as with a lot of university aged people I was still unsure what I wanted to do for a career long term, working on and studying volcanoes wasn’t exactly an easy thing to get in to in the UK! Through tutors and friends, I learnt that there were in fact jobs in the UK based around global natural hazards and even better, the industry was based in London! The natural catastrophe insurance industry was one I had not heard of before graduating. Having a job that everyday can involve studying the latest natural catastrophes around the world or working with maps has meant I am able to engage much more with the day to day modelling processes, I don’t feel I would have this interest and commitment to the role if it was just purely statistical work. All the data and the models have a real world feel to them as you can relate them to events occurring or that have occurred in the past, rather than just as numbers on a screen.
  • J – For me personally as an Earth Sciences graduate, the first thing to attract me to catastrophe modelling was its relevance to my university course, and the undeniably interesting subject matter of quantifying catastrophes. Many other graduates I know had left further education and gone on to work in fields entirely unrelated to their areas of expertise and fields of interest, as a result many of them have started to find they’ve begun losing interest in their chosen career paths. Upon being introduced to catastrophe Modelling, I knew I would not have to worry about running into the same problem. Like many people, I find the study of catastrophic events fascinating, whilst the subject matter is directly relevant to my educational background, as it would be for anyone with a degree in Geology/Geography, Maths or Data Science.
  • T – I knew I wanted to work within the insurance industry, but I had initially wanted to pursue a career in Underwriting, within a science-related line of business. After speaking with a few recruiters, catastrophe modelling and exposure management were recommended to me due to the job roles within this field suiting my skill set and interest. After looking into catastrophe modelling, I knew I could enhance the skills I picked up throughout my bachelor’s degree and apply it within this field, as well as exploring the scientific and theoretical aspect of the insurance market.

 

What skills do you think are important for a catastrophe modeller?

  • H – The main skills that I believe to be crucial to catastrophe modelling are having a quantitative background, in particular you should be familiar with excel to enable you to analyse large datasets efficiently. You should have good attention to detail and be naturally inquisitive.
  • L – To be a catastrophe modeller you must be happy to work with numbers, everything basically comes down to the results from the models (good or bad!). Being comfortable around numbers and formulas will give you a great starting point to not just being able to model but also understanding the processes. Once you understand the processes you can then dive in to gain a much wider understanding of the whole catastrophe modelling world. Alongside this, a grasp of Excel is very useful. The models do a lot of work for you but using Excel really helps with a greater understanding and knowledge of what the models are telling you. Aside from the technical skills, it is also helpful to have good time management. Making sure modelling results are supplied to underwriters in time for them to make decisions about the risk is key, and if an underwriter is happy then your life will be much easier! You will work on multiple risks at a time and juggling this as well as side projects you may want to undertake requires good decision making and prioritising.
  • T – Attention to detail, ability to work with large and complicated data sets, analytical mindset, curiosity and innovation – take into consideration future changes, e.g. climate change, and model risks/losses more accurately by tailoring and improving catastrophe risk analysis and exposure management
  • J – As you might expect with any analytical field, data Handling forms the foundation of much of your day-to-day work as a catastrophe modeller, meaning strong Excel skills and a decent understanding of maths are a necessity. Likewise, having an inquisitive mind and being able to spot opportunities to speed up processes and innovate are crucial if you want to excel as a catastrophe analyst. Good communication skills might not be the first thing many people would associate with catastrophe modelling, but these are also vital. Being able to effectively communicate with underwriters and other analytical functions is a crucial aspect of the job, all the catastrophe modelling expertise in the world will be useless if you aren’t able to communicate your findings properly.

 

How has your perception of catastrophe modelling and the insurance industry as a whole changed since starting your role?

  • H – I didn’t really know a lot about the insurance industry before I started my job and it all seemed quite daunting, but after a few months when I learned more about it, it didn’t seem as complicated as I first thought. In terms of catastrophe modelling, I didn’t realise how much processing was involved at first. I hoped that I would enjoy the job and nearly a year into it I am still really enjoying it!
  • T – I’ve learnt that catastrophe modelling will always be in demand and be ever-evolving due to changes in technology and research. There is a gap in the industry where current modelling tools can be developed around future climate change and I’m eager to observe how this will unfold over the years. Being able to combine my interest in physical geography and data analysis, and to see a career start to grow, makes what I do exciting.
  • J – There has definitely been a lot to learn about the world of insurance as a newcomer, and it’s no surprise that to most people outside of insurance, the inner workings of the industry are somewhat of a mystery. In the time since starting my role, I’ve learned of just how many widely varying roles go into the running of an insurance company, whilst I have also had to learn a nearly endless list of industry-specific acronyms and jargon. Crucially though, I’ve discovered that insurance is also a highly social and enjoyable industry. There’s a misconception amongst some that insurance as an industry can be “boring”, meaning I was pleased to find that the opposite is true. My company has thrown several great events in the time that I’ve worked here, and there’s definitely a good emphasis on getting the balance right between time spent working in the office and finding the time to go for drinks as a team.

 

What advice would you give to somebody considering applying for a role in catastrophe modelling?

  • H – My biggest advice would be to not get put off applying to a catastrophe modelling job if you do not have all the skills prescribed on a job application. I feel there is a perception that this is a heavily data-based job for people with highly mathematical degrees. I came from a scientific background, but I was by no means fluent with excel or statistics – I had not used Maths since A- Level! Although these skills are used in this job, if you are willing to learn, you will pick the skills up easily. If you have a genuine interest in catastrophe modelling, the rest will fall into place. I have already learnt so much in the 9 months I have been in the industry.
  • H – Do some research online about what catastrophe modelling is and whether it is something you want to get into and perhaps reach out to people, e.g. on LinkedIn, who are catastrophe modellers and speak to them about what it is like. If you decided it is for you, when starting the job be prepared to start at the bottom doing a lot of manual processing of data which can sometimes be tedious and take a while to do. But soon when you get more into the analytical side it is a lot more interesting.
  • J – As with anyone considering a move to a new field, doing your research beforehand is vitally important. Speaking to someone involved in the industry beforehand would be a great idea to get a feeling for what life is like as a catastrophe modelling analyst, whilst RMS also have some brilliant online resources, which are great for introducing you to the key concepts involved in catastrophe modelling. When it comes to applying for jobs, being able to code using SQL/VBA is worth its weight in gold. Whilst already being able to code might not always be necessity to land a catastrophe modelling job, coding knowledge will demonstrate your interest in the sort of data-driven work implicit in catastrophe modelling, whilst also helping you to hit the ground running faster upon landing your first job.

 

What do you enjoy most about your role and what have your highlights been so far?

  • H – In my particular company, I enjoy the range of responsibilities I have so early on in my career. I carry out analysis for multiple lines of business – mainly property and terrorism but I have worked with cargo risks too. I also enjoy seeing the whole process from start to finish; from a risk being proposed to an underwriter by a broker, to whether the risk gets taken on or not. The catastrophe modeller’s risk analysis is a crucial step in this process and undoubtedly influences the decision making of the underwriter. In this sense, the work you are doing is always relevant and helping the company operate.
  • H – I love that I learn something new every day, whether it is something big like learning how a catastrophe model works or something smaller like discovering a new Excel formula. My highlights so far have been some of the additional things I have done on top of my job such as starting my CII Certificate and doing the Certified Extreme Events Modelling course with AIR.
  • T – I enjoy analysing the monthly exposure numbers and visualising which insured countries are more vulnerable to certain losses. It’s interesting to see how the data I enter into the Impact system for each account plays out in the bigger picture.
  • J – The most interesting work is often the research-based projects based on evaluating the catastrophe models against real-life losses and observations, as you’re given the opportunity to investigate how effective the vendor models truly are at simulating the catastrophes they model. Likewise, projects based on seeking out alternative methods of manually modelling certain perils outside of vendor models are also similarly exciting, as these encourage innovative thinking and creative problem solving to independently come up with your own modelling methods. The opportunity to come up with your own solutions to unique problems is one of the most exciting aspects of catastrophe modelling, and it’s in these sort of research projects that you get the most freedom to do just that.

 

There is a lot of similarity, yet also a lot of variation in the responses above. I think that this just goes to show the breadth of what from outside may seem a very niche area, and that different personalities and skillsets may indeed thrive within the field. Overall, it is evident that the new entrants have enjoyed their new careers. I have always been pleased to see the level of candidate satisfaction when checking in with them after their first few months. I would like to thank those that I interviewed for providing some very detailed and insightful answers which I think have done a great job of showcasing the market.

Between the team at Arthur, we have 16 years of recruitment experience dedicated to catastrophe modelling to draw upon and help candidates make the best decisions when exploring opportunities within the insurance industry. If you or anyone you know is considering catastrophe modelling as a potential career path, and have any questions to follow on from this, I’m always happy to provide a free and informal consultation. You can contact me via the details below.

 

By Lucas Phelps

To get in touch with Lucas give him a call on 0203 5877 740 or email lp@arthur.co.uk

 

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