The Whodunit of Big Data

What do underwriters and police detectives have in common? One word: metadata.
By: | September 15, 2013 • 6 min read

What do underwriters, actuaries, and claims adjusters have in common with police detectives, special investigators, and criminal profilers? One word: metadata. When a criminologist looks at geographic patterns or other characteristics associated with a crime, he or she first must know what data is available and, just as important, how that data is defined. The same is true for the actuary who attempts to identify risk-specific characteristics that may help more accurately underwrite and price a risk.

Metadata has gotten a lot of press lately — both good and bad. Authorities tracked down computer security pioneer and fugitive John McAfee through the metadata associated with a photo of him posted on a Central American online magazine blog. The digital photo included metadata — date, time, and geo-location — that pinpointed McAfee’s whereabouts.

The New York Police Department’s Collision Investigation Squad recently increased its efforts to understand and evaluate automobile crashes in New York City by using surveillance videos, cell phone records, vehicle black boxes, and mapping tools. The key to understanding those technologies and assessing their interoperability is metadata.

Contrast those metadata stories with the recent discussions about DNA, where the use of data and metadata may not be so clear-cut. State and local law enforcement agencies are amassing DNA databases. The Supreme Court recently ruled state authorities can collect DNA samples from people arrested for serious crimes. But some interpret that ruling as allowing local authorities to expand DNA collection to individuals beyond those associated with serious crimes and beyond jurisdictional borders.

Similarly controversial, the National Security Agency’s (NSA) efforts to compile metadata from phone and Internet records have resulted in a great debate. At the center of that issue is the interpretation of Section 215 of the PATRIOT Act, which permits the FBI to request “tangible things” to assist with an investigation. Those “things” include “books, records, papers, documents, and other items.” Some people, including the U.S. House of Representatives leadership, have labeled this information metadata.


Big data and, more important, the analytics that big data fuels are important emerging technologies. But as these real-life examples prove, metadata is really the key to unlocking analytics.

The next generation of devices and technologies will expand the amount of data available in the world, which then will expand the amount of data aggregated and analyzed. Social media and other new data sources, such as satellite imagery, video, voice, telematics, radio frequency identifiers (RFIDs), event data recorders (EDRs), and electronic health records (EHRs), are becoming more prevalent and accessible.

Much has been said about vehicle telematics and how that technology has changed the way insurers underwrite and price risk and administer claims. But think about human telematics and what that can do for life and health insurance, workers’ compensation, or loss control. Some hospitals are equipping patient wristbands with devices that can transmit blood pressure and heartbeat readings. And that’s just the start. Imagine devices as innocuous as a henna tattoo that can transmit the wearer’s bio-readings (blood pressure, heartbeat, enzyme and hormone levels, temperature, and so on) to machines that can interpret the information and identify warning signs of a heart attack or overexertion.

Imagine an RFID device “woven” into any product that can help trace the item’s movement through the supply chain from creation to modification to end product. How will that affect product liability and transportation risk?

Metadata: The Crucial Detail

But several questions remain: Will we have the metadata to support such discovery and analysis? What metadata do we need? And what do we mean by metadata?

The media have highlighted two different definitions of metadata: structural and descriptive.

The traditional data management definition of metadata relates to data structures and definitions. But metadata can also relate to descriptive information about, but not including, data content.

A standard envelope can illustrate the difference:

The traditional “structural” data management approach would define each data element and its attributes. A name and address may be a simple example, but in reality, they contain much more complex metadata, as follows:

* Sender name:

* Given name — 20 digits, alphabetic

* Surname — 20 digits, alphabetic

* State: U.S. — two digit alphabetic code defined by the U.S. Postal Service

* Postal Code: U.S. — five-digit numeric as defined by the U.S. Postal Service

So, structural metadata helps in understanding the format and definition of the information contained on the envelope.

From a “descriptive” metadata perspective, metadata would associate this “transaction” (the letter) with the actual envelope descriptors — John Doe to Jane Deer, addresses, when postmarked, by which post office, and so on — but like structural metadata, would not record the contents of the envelope.


So, what metadata do we need — structural, descriptive, or both? At the most basic level, we need structural metadata. A good detective must know the facts, develop them into clues, and make logical deductions from them. The task today is not only to gather data but, more important, to harness it in a way that produces value for the enterprise. And structural metadata is necessary to understand and interpret the facts.

Back to our examples: Without structural metadata, someone totally unfamiliar with the U.S. postal system would not know whether Jane Deer is the sender or recipient, whether Jane was the given or surname, or what the abbreviation SD means.

But descriptive metadata provides analytical value — a letter sent from John Doe in New York to Jane Deer in South Dakota.

Structural metadata is key to understanding data and defining and assessing its quality and purpose. It keeps the detective’s sources rich, cataloged, organized, and accessible.

Structural metadata facilitates getting the most value from data by providing the context for the data, thereby allowing data managers, data scientists, and all data users to understand and make proper use of data. And a well-constructed, accessible metadata repository supports knowledge sharing, facilitates research, and improves communication about data.

While structural metadata standards do exist for select applications (archiving, librarianship, records management), data sets (arts, biology, geography), and functions (education, government, science), there are no industrywide metadata standards specific to insurance. That does not mean the insurance industry is without metadata standards entirely — quite the opposite is true. Many industry organizations — ACORD, IAIABC, ANSI, WCIO, to name a few — have developed data element attributes that can form a basic metadata standard. However, no singular view exists across those organizations and within the industry.

Building upon the various data element standards used in the U.S. insurance industry, a base Insurance Metadata Element Set could include the elements listed in the table below.


 Clues to Use

The insurance industry is using big data to analyze and solve problems associated with managing risk — risk-specific pricing, climate change, premium leakage, fraud, loss control, enterprise risk management, and so forth.

The job of the data manager is to make sure the main item needed to support those activities — data — is available, accessible, and of high quality.

But the most critical element of the data manager’s toolkit is structural metadata — the unifying element underlying all other toolkit functions. Without structural metadata, both descriptive metadata and, ultimately, the data content of the transaction, have no context.

Data management and analytics have much in common with detective work — both are a blend of art, science, and technology. Data managers collect, inventory, and organize the data.

Data scientists, actuaries, and statisticians are the detectives who develop the theories. Technologists provide the tools to process the data, and management provides direction and overall guidance.

Would that make Sherlock Holmes the ultimate data scientist?

Peter Marotta, AIDM, FIDM, is enterprise data administrator of Enterprise Data Management at Verisk Analytics. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]