Interview with SFI Prof. Despoina Makariou
Where did you grow up?
I grew up in Thessaloniki, Greece.
What were your hobbies as a child?
As a child, I spent a lot of time painting and being close to the sea, especially through water sports.
Where did you go to university?
I completed my undergraduate studies at the University of Macedonia in Thessaloniki, and then pursued a Master’s at Bayes Business School in London.
Where did you do your PhD?
I completed my PhD in Statistics at the London School of Economics and Political Science, in the research group on Probability in Finance and Insurance.
Do you have any anecdotes or memories from your PhD?
One thing that stayed with me from my PhD is how nonlinear research can be. There are long periods where progress is not immediately visible, followed by moments where things suddenly come together. That experience shaped how I approach research today, with more patience and a greater tolerance for uncertainty.
Who are some of the economists, scholars, or mentors who have had an important influence on your work?
During my PhD, I was very fortunate to be supervised by Prof. Pauline Barrieu, who had a strong influence on how I approach research. She is an excellent mentor, and she taught me the importance of combining methodological rigor with an awareness of both the limitations of models and how they are used in practice. That perspective has shaped my interest in decision-making under uncertainty and continues to guide my work.
What is your main research focus?
My research focuses on how organizations make decisions under uncertainty in insurance and financial markets. I study risks that are rare and difficult to model, such as catastrophe and climate-related risks, and use statistical methods and machine learning to understand how they are assessed, priced, and managed in practice.
What led you to start researching these topics?
It started with my experience working in catastrophe risk modeling in the London insurance market, where I saw how complex and uncertain these risks are in practice. That made me interested in how modeling can support decision-making in these settings. During my PhD, I focused more on statistical methods and machine learning, and I became interested in how these tools could improve how we analyze and price risk. Bringing these perspectives together led me to my current research.
What current research work are you excited about, and why?
I am particularly interested in work related to catastrophe risk, because it raises interesting questions about how financial markets and organizations deal with rare and complex events.
More broadly, I am interested in how different types of risks — including climate and man-made risks such as terrorism — affect decision-making, risk management, and preparedness. I find this increasingly important given its relevance for both financial institutions and policy.
What do you particularly enjoy about teaching Machine Learning in Finance?
I think what I enjoy most is seeing students become more confident over time. At the beginning, many of them find the material quite technical, but then they start to develop their own ideas, which is really rewarding to see.
What is a key takeaway message or skill that you try to pass on to students?
I usually try to emphasise that models are useful, but they shouldn’t replace judgment. It’s important to understand both what these methods can do and where their limitations are.
What are you most looking forward to as part of the SFI community?
I think what I am most looking forward to is the exchange across different institutions within Switzerland, and the connection between academic research and practice. My work is quite applied, so I value being in a setting where there is interaction with industry and where research can also contribute to policy discussions, and where I can contribute to that exchange.
Do you have a productivity habit or routine that works well for you?
I tend to work in fairly focused blocks, especially in the morning, and I try to keep a clear idea of what I want to achieve each week. It’s not always perfect, but it helps me stay on track.
What languages do you speak?
I speak English and Greek fluently.
Tell us something exciting that happened to you in the last five to ten years?
One of the most important things for me in the past few years has been becoming a mother. It has been very rewarding and has also changed how I think about priorities and organize my time.
What do you do in your spare time?
I enjoy swimming, arts and design, and spending time with my family.
What is your favorite holiday destination?
I would say anywhere by the sea, but especially Greece.
What is your favorite book?
One book I really like is Thinking, Fast and Slow by Daniel Kahneman. I find it very insightful in how it explains how people make decisions.