Risk Insider: Jack Hampton

The Changing Concept of Privacy

By: | December 7, 2016 • 2 min read
John (Jack) Hampton is a Professor of Business at St. Peter’s University and a former Executive Director of the Risk and Insurance Management Society (RIMS). His recent book deals with risk management in higher education: "Culture, Intricacies, and Obsessions in Higher Education — Why Colleges and Universities are Struggling to Deliver the Goods." His website is www.jackhampton.com.

Classical Chinese Mandarin had no word that conveyed the modern meaning of privacy. Its closest term conveyed a message close to “shameful secret,” as when a person wanted to hide a disgraceful behavior from others.

Everybody knows the meaning of “privacy.” It is freedom from being observed or disturbed by others. Legally, it is a right to control access to our personal information.

Is the issue of privacy about to change as a major theme in our society?

We can ask German Chancellor Angela Merkel, “Did you feel violated when you learned the U.S. National Security Agency listened to and recorded your cell phone conversations?”

We could contact 32 million members of Ashley Madison, the commercial website that facilitates discreet sexual affairs for married adults. Did bad things happen after the release of their full names, home addresses, and credit card transactions?

We might be curious about what happened to Ashley Madison’s clients in Saudi Arabia where adultery is a crime punishable by death.

Curiosity is one thing. Managing the exposure from a privacy breach is a potential disaster.

Risk managers are concerned about privacy violations that increasingly are coming from out of nowhere. We should be concerned too.

Ask Erin Andrews, the ESPN reporter who was videotaped naked in her hotel room. A jury verdict was $55 million from Marriott for violation of privacy.

You can’t ask Tyler Clementi, an 18-year-old student at Rutgers University. He jumped to his death from the George Washington Bridge after his roommate used a webcam and shared an Internet video of Clementi kissing another man.

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Privacy violation is big business. The collection of our private data is a $300 billion-a-year industry employing millions of people in the United States. They gather information without regard to how it will be used. They digitally scour Facebook for information about people going on vacation, match it with email addresses, and sell it to vendors in destination locations who promote events for tourists. Unintentionally, the information can wind up in the hands of burglars who break into empty homes.

Elsewhere, recruiters uncover personal data not volunteered in applications for employment. Unscrupulous proprietary schools identify financially struggling students and put them into debt pursuing programs they will not complete.

The quest for sensitive data and other secrets is part of a new discipline called “business analytics.”

Privacy violation is big business. The collection of our private data is a $300 billion-a-year industry employing millions of people in the United States. They gather information without regard to how it will be used.

The definition is quite harmless. It refers to continuous and repeated exploration and investigation of data to improve performance.

It uses the availability of the massive amount of data collected by companies, governments, and other parties who have little or no respect for privacy.

The situation is complicated because we actually train people to violate privacy. Business analytics is a “hot” academic program on college campuses. Students learn how to pore through our personal lives to create “meaning” that will be used for or against us by complete strangers.

What is the reality of personal privacy? It’s gone.

Politicians use business analytics to find friendly voters. The media tracks down hidden stories that inform, entertain, or titillate. Lawyers pursue clients. Employers dig for conflicts of interest. Netflix manages its business based on our viewing patterns.

Everybody is sharing the data. Nobody is taking much time to respect privacy.

We might conclude with a mission statement that could apply to a modern company.

“We have to be forthright with our customers. We must earn their confidence. We have to show them we care about them and will protect them. Then, we can find their shameful secrets and invade their privacy.”

The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]p.com.