Predictive analytics: only heard the good stuff?

Analytics 2017 20 April 2017

Nigel Harrison

Head of Customer Analytics

Nigel.Harrison@aig.com

THIS PRESENTATION IS FOR INFORMATIONAL PURPOSES ONLY AND SHALL NOT BE CONSTRUED TO CONSTITUTE ADVICE.

AIG ASIA PACIFIC INSURANCE PTE. LTD. (“AIG SINGAPORE”) AND AIG APAC HOLDINGS PTE. LTD. MAKE NO REPRESENTATION OR WARRANTIES AS TO THE ACCURACY, COMPLETENESS OR TIMELINESS OF THE INFORMATION, TEXT, GRAPHICS OR OTHER ITEMS CONTAINED IN

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THIS PRESENTATION. AIG SINGAPORE EXPRESSLY DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS IN, OR THE MISUSE OR MISINTERPRETATION OF, ANY INFORMATION CONTAINED IN THIS PRESENTATION.

Apply findings

Build model

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Build model

Get data

What problem are you trying to solve exactly?

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exactly?

400

500

600

700

800

900

1,000

Num

ber

of S

ale

s

Marginal cost per

sale

Unit cost Number

of Sales

5

0

100

200

300

400

Num

ber

of S

ale

s

Marketing cost

Unit cost per sale

of Sales

Now that you know, what are you going to do about it?

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going to do about it?

Predict something you can change

Identify key interactions

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Identify key interactions

Consider what’s under your control

Is the most predictive model always the best one for the job?

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the best one for the job?

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AIG On the Go

The Intelligent Driving app for Singapore

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Biased data is worse than no data.

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Biased data is worse than no data.

On two occasions I have been

asked,

“Pray, Mr Babbage, if you put into

the machine wrong figures, will the

right answers come out?"

... I am not able rightly to

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... I am not able rightly to

apprehend the kind of confusion of

ideas that could provoke such a

question.

Charles Babbage, 1864

Quality data

� Timely

� Accurate

� Complete

� Consistent

+ Contrasting

+ Unbiased

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� Consistent

� Relevant

� Appropriate detail

You can’t infer

propensities by

looking only at

buyer profiles.

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Non-buyers

buyer profiles.

Build contrasts

into the dataset.

You cannot change

the laws of physics.

Don’t accept

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Don’t accept

leakage from the

future.

Put the science

into data science.

Experiment.

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Experiment.

Solve problem

Build model

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Build model

Curate data

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American International Group, Inc. (AIG) is a leading global insurance organization. Founded in 1919, today AIG member companies provide a wide range of property casualty insurance, life insurance,

retirement products, mortgage insurance and other financial services to customers in more than 100 countries and jurisdictions. These diverse offerings include products and services that help businesses

and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.

Additional information about AIG can be found at www.aig.com and www.aig.com/strategyupdate | YouTube: www.youtube.com/aig | Twitter: @AIGinsurance | LinkedIn:

http://www.linkedin.com/company/aig. These references with additional information about AIG have been provided as a convenience, and the information contained on such websites is not incorporated by

reference into this presentation.

AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our

website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and

coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines

insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.