As CEO of Verisk Analytics, Scott Stephenson knows the threats facing New Jersey insurance companies, businesses and consumers, and how to mitigate those risks. “We help those insurers understand the historic pattern of loss in combination with and understanding of the causal factors in order to make forward-looking statements about the likely future level of loss,” Stephenson said. Jersey City-based Verisk provides analysis tools to several industries, with a focus on insurance and finance.
“Our relatedness to New Jersey-based companies would be in two forms,” Stephenson said. “One is New Jersey-based insurance companies are our customers and we help New Jersey-based insurance companies serve New Jersey-based companies in other parts of the country.”
Stephenson identified three ways companies can protect their proprietary information. The first centers on securing physical technological infrastructures; the second is encrypting data to protect oneself; and the third is buying cyber insurance.
“You observe the shape of their IT system and you go to the very outer perimeter of your IT system and you ask about perimeter defense,” Stephenson said. “Then you come inside the perimeter and you ask questions about firewalls. Then you come inside and get to the actual data environments where data actually sits. You create those as secure as well.”
In addition, New Jersey companies are also subject to rules promulgated elsewhere.
“It is up to the individual nations to decide where they are going to be on the issue of data security,” Stephenson said. “We refer to it as data nationalism. What that really means is that more countries have decided that the way they will keep faith with their populations with regard to data security is insist that data must reside in that country. Anyone who wants to do analysis on data who grows up in such a country must locate its analytic activities in that country.”
Verisk evaluates New Jersey companies on how robust their cyber-environment is and how resistant they are to being infiltrated, Stephenson said. As a result, Verisk creates an incentive for companies to improve their security and cut their insurance costs.
“We observe on lots of risks that exist inside New Jersey and cyber is one of them,” he said. “We also observe on the potential for events like Superstorm Sandy or flooding.”
Stephenson learned lessons from Sandy, which struck New Jersey in October 2012, causing widespread damage. The first lesson: most damage was caused by water rather than wind.
“It has helped emphasize the counter-measures that need to be in place in order to do well, survive, and recover,” Stephenson said. “It has to do with avoiding water damage. There needs to be a real understanding of where floods are more likely to occur.”
Sandy revealed that the government’s existing flood-zone maps were not accurate, Stephenson said. And the storm exposed a vulnerability in the electric generation transmission system, he said.
On the subject of artificial intelligence, Stephenson sees benefits in the form of the machine amplifying a lot of data relatively quickly and interpreting the data, resulting in increased productivity. This technology will change the nature of work but the machine will be operating in support of humans, he said.
Stephenson sees few drawbacks to artificial intelligence. “My own view is artificial intelligence should not be scary to human beings,” Stephenson said. “As long as it is structured properly, I think it adds productivity.”