Your Data Is Vital to You, But Do You Know How Much It’s Really Worth?

By: | October 30, 2018 • 3 min read
Dr. Henna Karna is a data scientist and Chief Data Officer of Bermuda-based multinational insurer AXL XL, a division of AXA, which recently unveiled DEEP, the industry’s first Digital Ecosystem & Engagement Platform. Karna can be reached at [email protected]

As companies across all sectors evolve into digital enterprises, there is an increasing need to value a company’s data as a tangible asset on the balance sheet. While data appears to meet the formal criteria of a business asset, current Financial Accounting Standards Board (FASB) accounting practices prohibit organizations from capitalizing it.

This may need to change.

For businesses that are information-rich, like financial services, data is the feedstock for pricing products, making it the primary asset of value. For other companies, data can become a separate revenue stream offered as a new product line or separate income stream. Insurers, for example, could provide benchmarking information on workers’ compensation claim trends across different occupations in disparate geographies to customers or third-party companies for a fee or as a free service.

Insurance has always been a data-focused business, albeit a historical one. By integrating historical information with more real-time sources of data and leveraging predictive data analytics, machine learning and other cognitive computing technologies, insurer capabilities will expand. By capturing and analyzing a vast array of structured and unstructured data, carriers can create new commercial insurance products and unique insurance coverages customized to a client’s specific demands.

Insurance has always been a numbers game; now the numbers have more meaning than ever before.

Once data is digitized, a computer can capture, search, exchange and integrate different data elements. Digitalization — a company’s use of this digitized information to optimize its business and operating workflows — then follows. The next step is digital transformation, which calls for integrating the organization’s digital footprint with partnering businesses and customers in a collaborative and transactional digital ecosystem.

As companies move forward in this three-step journey, they will capture and access both historical and real-time structured and unstructured data for analytical purposes. The bonus is that the semantic layers of this data are being mapped at a faster rate to offer even deeper insights. Semantic data is crucial to making tomorrow’s business decisions as it represents data in common business terms. Users can access the data they need by using familiar business words like “product,” “customer” or “revenue” to obtain a unified, consolidated view of data across the enterprise.

Our own digital transformation is focused on Dense Data — basically Big Data in which different pieces of information on a particular subject are distilled to provide greater business context.

Using Dense Data, we will be able to continuously enhance the customer value of our products, dramatically increasing their value and lifespan. Like all products, insurance policies are not evergreen. If they’re not continually improved, they’ll die out like a five-year-old smartphone.

Asset Valuation

These examples of the exponential growth increasing and business value of data all point to a future where data is valued on the balance sheet as an asset. The challenge, of course, is how to determine the value of different types of structured and unstructured data. Without this capability, boards of directors, analysts and investors cannot easily and dependably compare the accurate value of one company’s data to another’s.

Accurately valuing data is an uphill climb, but it’s not impossible: Dealmakers in the M&A environment are constantly putting a value on information assets, particularly when the target acquisition is a data-rich business — like when Microsoft acquired LinkedIn. Companies can begin to assess the business value of their data by leveraging the insights of their data scientists and engineers about these information assets, where these reside and how they produce business benefits.

In our company, the enterprise data team is entrusted in partnership with the heads of finance and operations to begin the process of valuing our data.

Each time a data element is used in one part of the organization (say claims) to produce a particular insight, and the same element is subsequently reused by another part of the business (like underwriting), this reuse capability not only brings down the marginal cost of data, but it also creates a metric for monetary return. How often this particular data element is reused can be a means of calculating its value as an asset. As time goes by and the data element is reused less and less, its value would correspondingly decrease.

That’s just one idea and there are likely others. The point is that digital transformation is a nonstop locomotive, in which many businesses are still just beginning. For those of us in the insurance industry, this journey is well underway and it is both scary and exciting.

Insurance has always been a numbers game; now the numbers have more meaning than ever before.

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]