What is the “most promising job” in 2019 according to Tech Republic? If you answered “data scientist,” you’d be correct. The field saw a 56 percent increase in job openings in the U.S. over the past year. What’s more, the U.S. Bureau of Labor Statistics predicts businesses will create 11.5 million jobs in the data science/analytics area by 2026. Given this trend, it should come as no surprise that higher ed donors, ranging from alumni to institutional funders, are digging deep for university initiatives in this area.
The most recent example comes out of Wisconsin, where American Family Insurance (AmFam) announced it will invest $20 million in data science initiatives at the University of Wisconsin-Madison. AmFam earmarked half of the commitment for research over the next 10 years, while the other half will establish a $10 million endowment to create the American Family Insurance Data Science Institute. The university said the funding will help support work in fields as diverse as artificial intelligence, genetics, drug development, material science, and business.
“American Family Insurance is a proud partner and supporter of UW-Madison,” said Jack Salzwedel, American Family Insurance chair and CEO. “This latest partnership recognizes the importance of using data science to help our customers, by providing insights on the challenges they face and how best to take action to meet them. The Institute will also develop a pipeline of potential future employees in the data science field, as well as provide valuable learning opportunities for our current employees.”
Funders with an expansive footprint in data-heavy sectors like science, technology, and finance are driving the data science gold rush. Last year, Graham Weston, the former CEO of Rackspace, a web-hosting startup, made a $15 million pledge to support the University of Texas at San Antonio’s School of Data Science. Earlier this year, Jaffray Woodriff, the co-founder of the private investment firm the Quantitative Foundation gave his alma mater, the University of Virginia, $120 million to establish a School of Data Science. Institutional funders actively supporting university data science initiatives include the Washington Research Foundation, the Starr Foundation, the Gordon and Betty Moore Foundation, and the Alfred P. Sloan Foundation
The U-Wisconsin gift is a reminder that insurance companies also have skin in the data science game. As Amfam CEO Salzwedel’s quote suggests, enlightened self-interest certainly plays a role here. Insurance companies understand the importance of establishing a pipeline of skilled labor and how the effective deployment of data science principles can be a huge competitive differentiator in a hyper-competitive market.
Writing in Medium, Igor Bobriakov noted that “the insurance industry is regarded as one of the most competitive and less predictable business spheres. It is instantly related to risk. Therefore, it has always been dependent on statistics.” The field of data sciences has the potential to revolutionize how insurance companies manage statistics and risk. Insurance companies can leverage data science to optimize activities like fraud detection, personalized marketing, claims prediction, and “lifetime value prediction,” in which the company crunches data to predict the long-term financial “value” of a customer. The possibilities are endless.
In 2016, Sentry Insurance presented the University of Wisconsin-Stevens Point with the largest donation in the university’s 122-year history. Sentry earmarked the $4 million gift to endow two new faculty positions and create a new major in data analytics. At the time, the gift was the largest one-time donation Sentry has ever made to any organization.
That same year, MassMutual made a $15 million commitment to the University of Massachusetts. MassMutual earmarked $12 million of that commitment towards doubling the number of data science courses and tripling UMass’ master’s program in computer science. MassMutual, which deals primarily in life insurance, has leveraged data science to analyze mortality statistics related to its core products and build new predictive models to estimate a potential policy holder’s risk based on large data sets.
The Madison-based American Family Insurance has a far broader portfolio, focusing on property, casualty, and auto insurance, and also offers commercial insurance, life, health, and homeowners coverage as well as investment and retirement-planning products. (There’s a reason why the company’s motto is “all your protection under one roof.”) The mind reels at the countless ways in which AmFam can apply data science principles across its vast and diverse product line.
The company has a relatively light footprint in terms of publicly available mega-gifts. In 2003, the company announced a $10 million gift launching the campaign to create the American Family Children’s Hospital. Back in May, it announced $1 million to support the University of Wisconsin-Milwaukee’s Lubar Entrepreneurship Center. That said, more big gifts may be on the horizon. The company reported a net profit of $295.2 million in 2018—nearly twice its 2017 earnings. Revenue was $10.3 billion, compared with $9.5 billion in 2017.
While AmFam made the gift U-W, the company also has a separate philanthropic arm, the Dreams Foundation, which AmFam launched in 2016. In 2017, American Family Insurance and the Dreams Foundation collectively made 5,704 gifts to organizations in 44 states totaling $2.6 million, including community grants, matching gifts, hurricane relief efforts and United Way campaign donations.