Why data is a dis­rup­tive force in in­surance

Digital Insurance - - EXECUTIVE SESSION - BY LENNY LIEBMANN

XL Catlin re­cently named Dr. Henna A. Karna as its chief data of­fi­cer. The in­dus­try vet­eran had done stints at Verisk An­a­lyt­ics and AIG. Dig­i­tal In­surance spoke with Karna about her plans. Blockchain tech­nol­ogy is par­tic­u­larly in­ter­est­ing be­cause data lin­eage and trans­parency are so use­ful in in­surance. — HENNA KARNA, XL CATLIN

DI: WHAT DO YOU PER­CEIVE THE ROLE OF THE CHIEF DATA OF­FI­CER TO BE IN TO­DAY’S IN­CREAS­INGLY DATA-DRIVEN OR­GA­NI­ZA­TION?

Henna A. Karna: he CDO’s role is about uti­liz­ing data to cre­ate deeper, ex­tended con­nec­tions with the network we serve — which, in most cases, is the cus­tomer. In ef­fect, that means find­ing and cre­at­ing new value cap­ture mech­a­nisms for the com­pany.

If you think of data as notes on a sheet of mu­sic, the role of the CDO is to or­ches­trate those notes and give them the right con­text. A nu­mer­i­cal view alone is in­suf­fi­cient. It’s about weav­ing the quant with the con­text.

Con­text is an im­por­tant con­cept that en­ables com­pet­i­tive an­a­lyt­ics and helps drive a cor­po­rate strat­egy. For our firm, it ex­tends our value propo­si­tion from trans­ac­tional de-risk­ing of our cus­tomers’ busi­ness to some­thing that much more broadly sus­tains a long-term re­la­tion­ship.

DI: WHAT SPE­CIFIC ITEMS ARE YOU EX­PECT­ING TO BE THE TOP CHAL­LENGES AND OB­JEC­TIVES FOR YOU IN YOUR NEW PO­SI­TION?

Karna: The creation of high-im­pact busi­ness in­sight from en­hanced eval­u­a­tion and con­sump­tion of data is not a one-per­son job. So one of my pri­mary ob­jec­tives is to cre­ate in­sti­tu­tional mo­men­tum around our data strat­egy so that it be­comes part of our com­pany’s DNA, rather than just some par­tic­u­lar prac­tices we adopt. An­other chal­lenge as we pur­sue dis­rup­tive data-re­lated en­deav­ors is to balance ve­loc­ity, value and max­i­mized learn­ing in a fast-fail ex­e­cu­tion model.

DI: ARE THERE ANY EMERG­ING TECH­NOLO­GIES THAT YOU’RE PAR­TIC­U­LARLY EX­CITED ABOUT?

Karna: Blockchain tech­nol­ogy is par­tic­u­larly in­ter­est­ing, be­cause data lin­eage and trans­parency are so use­ful in the in­surance in­dus­try. Ge­netic al­go­rithms are also ex­cit­ing, be­cause or­ga­ni­za­tions still tend to view big data in siloed blocks — and ge­netic al­go­rithms over­come that lim­i­ta­tion by en­abling data el­e­ments to “breed” freely, cre­at­ing new “mu­ta­tions” that re­veal pre­vi­ously opaque in­sights. And, of course, ar­ti­fi­cial in­tel­li­gence is valu­able for underwriting, pric­ing, and other ap­pli­ca­tions for ad­vanced ma­chine learn­ing.

DI: TELL US ABOUT YOUR AP­PROACH TO COL­LAB­O­RA­TION WITH THE REST OF THE BUSI­NESS, OUT­SIDE THE OF­FICE OF THE CDO.

Karna: Col­lab­o­ra­tion is about un­der­stand­ing the stake­holder fo­rum — which typ­i­cally con­sists of the un­will­ing, those who let it hap­pen, those who help it hap­pen, and those who make it hap­pen. The ob­jec­tive of col­lab­o­ra­tion is to bring that stake­holder fo­rum from where they are in that spec­trum to where they need to be. This must be done by con­tin­u­ally adding in­cre­men­tal value as your work

to­gether evolves.

DI: WHAT AD­VICE WOULD YOU GIVE YOUR FEL­LOW IN­SURANCE CDOS?

Karna: The CDO func­tion is not about go­ing from legacy tech­nol­ogy to a cut­ting-edge plat­form. It’s not about pulling in­for­ma­tion into a sin­gle source or about cre­at­ing endto-end gov­er­nance struc­tures. Th­ese are all ta­ble stakes that should oc­cur in par­al­lel with your broader, more strate­gic fo­cus on cre­at­ing busi­ness im­pact.

DI: WHAT AD­VICE WOULD YOU GIVE SOME­ONE WHO ISN’T A CDO YET – BUT AS­PIRES TO BE ONE?

Karna: Al­ways make sure you un­der­stand the busi­ness. All that you do, re­gard­less of your role in any or­ga­ni­za­tion — let alone that of the CDO or an as­pir­ing one — is about con­tribut­ing to the ob­jec­tives of the busi­ness. That should al­ways be the core of your as­pi­ra­tion. As ob­vi­ous as it may sound, it’s in­cred­i­ble how of­ten peo­ple over­look this core prin­ci­ple.

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