Many P&C actuaries find themselves working in popular lines of business such as homeowners, automobile, workers’ compensation or general liability. However, the P&C industry extends even beyond these lines into many nontraditional sectors. For example, there are actuaries working in telematics and the financial sectors. 

One application of actuarial science that many actuaries may not have heard of before is technology performance insurance. Technology performance insurance protects the capital in the event of technology underperformance. For example, if a company is trying to raise financing for their new product, they might have some trouble raising funds given that their product or technology is new and its performance unknown. Performance insurance pays the lender or equity in the event that the technology underperforms, thus protecting their investment and making it easier for new projects to get the financing they need. Before an insurer is willing to issue a performance insurance policy, there is a rigorous review process potentially involving site visits by engineers and a review of the company’s technology and finances to ensure that the product or technology is viable. Today, I had the opportunity to interview Celeste Bremen, a senior actuary at New Energy Risk (NER). NER is a managing general agent (MGA) focused on “accelerating the deployment of breakthrough technologies that address global challenges.” In Bremen’s words, this means that NER helps other companies that create sustainable products or support infrastructure with reduced carbon emissions and need performance insurance. As an MGA, NER is the bridge between clients that want performance insurance and the insurance partners that can provide it. 

Bremen works heavily on analytical solutions that help quantify the risk transfer associated with NER clients’ projects. One example of the sort of project NER might ensure is a waste to fuel project, in which waste that would otherwise be discarded is turned into fuel. In this case, the actuaries at NER are responsible for creating a risk assessment around the efficiency of turning waste into fuel and the amount of fuel produced. Actuaries may calculate standard deviations around output produced or assess the impact of an event that halts or reduces production. If a project were to underperform, the lender or equity provider for the project would then receive the loss amount. These results are then shared with insurers, and NER’s actuaries help the insurers evaluate how potential losses may change with different deductibles or limits, as well as feel confident that the risk is priced appropriately and desirable. 

One of Bremen’s favorite parts of the job is working with the engineers at her company. Similar to how many actuaries work closely with underwriters, Bremen works with engineers who understand the physical nature of the risks. She talks to the engineers to understand the scientific components of the risks, so she can convert the physical parameters into inputs for models that she builds. For example, Bremen may review the data related to a failure mode identified by engineers and map this data to a loss distribution and related parameters. She also reviews the final model output with her engineering colleagues to make sure that the results make real-world sense. 

Bremen is a strong communicator. She is an expert in predictive modeling, but when she works with engineers, she needs to ensure that she can communicate technical modeling concepts to professionals from other disciplines. Similarly, engineers communicate complicated scientific concepts to actuaries with a background in math and statistics as opposed to natural sciences. The process of talking to engineers is very enriching for Bremen because “It’s a nice reminder that all these numbers represent something in the real world.” 

Apart from talking about the differences between her industry and other P&C lines of business, Bremen discussed some key things to keep in mind for an actuary who is interested in nontraditional actuarial roles. Unsurprisingly, a lot of the skillsets are the same for actuaries in traditional roles. Particularly, Bremen highlighted that it is important to develop coding skills. For college students, she recommends taking a programming class before joining the industry, and if an actuary didn’t take a coding class in college, it’s never too late to take an online course. Bremen often builds prototypes in Excel before moving data to more multifaceted software such as Python. She explained that it is important to be adaptable since the P&C industry is always growing and changing. In 20 years, she wouldn’t be surprised if Python became the norm. In addition to Python, it doesn’t hurt to learn R or another programming language. However, as long as an actuary develops a strong coding foundation, as well as the ability to be agile, they can learn a lot of technical skills as well as industry knowledge on the job. This wisdom holds true for actuaries interested in traditional roles such as home or auto, as well as actuaries who want to work in nontraditional spaces focused on telematics (see Future Fellows, December 2022 for an article Bremen wrote on the subject) or performance insurance. 

In addition to recommending that actuaries develop their programming skills, Bremen emphasized the importance of effective communication. Whether an actuary is at a traditional insurer working with underwriters or at a nontraditional company working with engineers, there will always be a strong need to communicate technical concepts to audiences from all backgrounds. Communication skills are developed over time, but actuaries can work on them by delivering presentations, working closely with non-actuaries and practicing their skills whenever the opportunity presents itself. 

Overall, Bremen highly encourages new actuaries to investigate all the potential roles available in the industry. Back in college, she never would have thought that she’d be working with engineers to help deliver solutions to clients seeking performance insurance for their sustainable products. However, she now knows that both traditional and nontraditional roles are constantly being created throughout the industry, and there is a lot of opportunity for advancement. In other words, the opportunities are truly endless for P&C actuaries, and we have a lot to look forward to as the industry continues to advance! 
Source: https://newenergyrisk.com/.

^[5]  https://www.casact.org/sites/default/files/2024-07/Exam_6C_Content_Outline.pdf.

^[6]  https://www.casact.org/sites/default/files/2024-07/Exam_6I_content_outline.pdf.

^[7]  https://www.casact.org/sites/default/files/2023-05/6I_Dror_Piesse_What_is_Microinsurance.pdf.