The motor insurance sector entered into the new era of phased liberalisation in July, with full detariffication scheduled to take place in 2019. It’s now a free market, and vehicle insurance premiums are now no longer calculated on a fixed rate basis, but on a risk-based assessment system. Insurance and Takaful operators are now free to offer different plans, and pricing is set to differ between insurers as well.
Last month, Bank Negara Malaysia (BNM) revealed some emerging trends from the first month of of phased liberalisation, which suggested that insurers are already differentiating between lower and higher risks when it comes to premium pricing, although they are also taking a cautious approach. What’s for sure is that in the very near future, how much one pays for motor insurance will be directly linked to how much risk he or she carries. A safer driver driving a safer car will pay less.
This morning, Pixelated Sdn Bhd’s Katsana signed memorandums of understanding with Allianz Malaysia, Etiqa Insurance, Etiqa Takaful and Axiata Business Services to embark on a collaboration to help boost the adoption of usage-based insurance (UBI) in Malaysia.
In this partnership, Katsana will leverage on its experience in telematics and big data to provide a UBI platform to Allianz and Etiqa to develop UBI products. The insurers will work together with Katsana to improve its newly-launched DriveMark telematics app, which is how the parties plan to collect driving behaviour data, as well as explore ways to encourage app users to improve their driving behaviour. Allianz and Etiqa will also be promoting DriveMark through their channels.
As for the link with Axiata, Katsana is funded by the telecommunications group’s Axiata Digital Innovation Fund (ADIF). Axiata’s global user base of 320 million will also provide opportunities for the DriveMark app to grow.
Basically, Katsana’s DriveMark app – launched in July and available on iOS and Android – records the driving behaviour of users, detecting driving style via your smartphone’s various meters, sensors and GPS. This is then translated into a score – smooth drivers get a higher score, while actions such as harsh acceleration and braking will get marks deducted. Higher score = better/safer driver = potentially lower premiums.
Katsana claims to be one of the largest tracking solutions companies, having tracked, analysed and scored more than 550 million km of driving data, with 62% reduction of risky driving patterns over 12 months. The company, which also provides secure telematics hardware, claims to have successfully recovered 98.2% of stolen cars worth over RM4.2 million.
With DriveMark, the company is aiming towards a transparent and independent UBI standard that’s vendor-neutral. I’d like to think of it as CTOS score for driving behaviour, where those with high marks are seen favourably by banks, or insurers in this case. Like NCD, a high score is yours to keep and you can freely move between insurers with the number in your pocket, so to speak.
Participating insurers will have access to aggregated and summarised data of drivers with the DriveMark app (not individual data), which will enable them to develop custom UBI products, according to Katsana.
“At Allianz Malaysia, we feel that Katsana offers a very exciting telematics app, which is easy to use, without the need to pay and install a physical device in your car. All you need is your smartphone. This partnership will allow us to take one step into UBI in providing incentives for good driving behaviour,” said Zakri Mohd Khir, CEO of Allianz Malaysia.
“Customers must understand that the way they drive have consequences. [With this score] customers can present the data to the insurance companies – it’s something very powerful,” he added at the press conference that followed the MoU signing.
Ahmad Rizlan Azman, COO of Maybank Ageas Holdings, representing Etiqa, touched on the “fun” aspects of DriveMark. “We are exploring ways to make safe driving more pleasurable for drivers by applying gamification techniques. The feature records extreme manoeuvres and the data is then integrated in the form of a scorecard. This will serve as direct feedback that incentivise drivers to compete against themselves for the best scores,” he said.
“We believe the key to UBI is the consent of use and availability of data owned by the drivers. This allows DriveMark to be a platform to work with unlimited number of insurers, giving drivers the ability to make informed choices in appointing their motor insurers. This also enables insurers to be more creative in their offerings and incentives as they are now able to gauge and assess the driver as individuals or as a fleet for corporations,” commented Amin Shafie of Intres Capital Partners, fund manager of ADIF.
“With our experience handling telematics, we are ready to empower insurers with data for them to develop fitting UBI products for Malaysian customers. We are open to working with other insurers too,” said Syed Ahmad Fuqaha Syed Agil, MD and co-founder of Katsana.
In July, AXA Affin General Insurance launched the AXA FlexiDrive plan, which also uses telematics to reward safe drivers with discounts of up to 20% on their premiums. AXA’s plan requires a small device to be installed at the car’s battery, It features GPS, a SIM card and a accelerometer to track driving pattern.
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Usage-based motor roadtax bilagi?
Alredi here long ago. The more fuel u use from a bigger engine, the more u need to pay.
Tahniah Katsana.
Ni nak kita habis guna kita punya dataplan ni.
Depends on how much we save, there might be a good market to ‘lent’ our ‘special’ phones to good drivers to boost up the score. Hehehe…
Boikot them if dataplan is not free. Will be funny if insurance is Rm1000 a year but cost of dataplan and the monitoring kit is RM200 a month. Never trust telco or insurance companies.
lol..it is not video streaming that use so much data.
whatever their suggestion, the insurance policy gonna cost more than before. Just you see……
And if it doesnt, whatcha gonna do? Go 14th floor kah?
You’re most probably right, but what if we could exclude ourselves from the rest of crazy driving population? The premium might be better for the safe drivers group.
Those who veli sure cost will go up, must know deep down that their dangerous drivers.
Big brother society ka? Where I go and how I drive should be private information.
“Ahmad Rizlan Azman, CEO of Maybank Ageas Holdings”.
Dear author, you should do a quick fact check on the above.
Typo on my part, he’s the COO
What happen if i turn off my gps sensor on my phone?