The last dinosaur: motor insurance in MalaysiaPOSTED BY Yamin Vong ON 07 September 2017
Ever since Bank Negara declared June this year as the official start of motor insurance detariffication, Motorme.my has been on the watch for the early adopters.
About a month ago, AIG Malaysia struck a deal with Lazada to sell travel insurance online. That’s a start, for travel insurance to be sold by a traditional insurance company instead of an airline.
Then there was Tuesday’s launch of Katsana’s latest offering, Drivemark – a mobile app that turns your smartphone into a data log of your daily driving and stores the information as anonymous bits and bytes in a big data pool to profile the average Malaysian driver.
This collaboration between Pixelated Sdn Bhd, Allianz Malaysia Bhd, and the Etiqa Insurance group is Malaysia’s first step towards motor insurance detariffication.
“Together with some agreements on baseline scores from DriveMark and minimum distances of which the scores are derived, we expect to sell Usage Based Insurance (UBI) this year or by early next year,” said Allianz chief executive officer Zakri Mohd Khir, after the signing ceremony in Kuala Lumpur.
For Syed Ahmad Fuqaha Syed Agil, his work in developing Katsana was all about improving driving safety and to minimise car theft.
“While Katsana as a business model was triggered when my brother’s car was stolen four years ago, today, it’s far more than that.
“Our vision is to have safer roads and save lives through technology,” said Ahmad Fuqaha.
“And to achieve this, our mission is to become the defector solution provider for usage-based insurance telematics in the region.
“We want to push the envelope in connected car technology in the automotive industry and our application of smartphones instead of installing blackboxes in cars makes our solution so scalable and user-friendly,” he added.
Detariffication in this context is where Bank Negara releases its control of prices/premiums for motor insurance. Malaysia is among the last few emerging economies to control motor insurance prices – what the industry refers to as (Bank Negara) tariffs.
Just to be on the safe side against the price gouging of policy holders, Bank Negara will allow prices to be flexible at 10 per cent either side of current tariffs until further notice.
Since the motor insurance premium will be somewhat (plus or minus 10 per cent) flexible, insurers will have some motivation to compete to get customers with superior, safe driving profiles.
What you need to do:
Download and install “DriveMark” from your app store. The app will use all the sensors – gravity, acceleration, deceleration – to automatically detect when you are driving and score your driving skills.
This score will become more accurate the more miles you accumulate as a driver. Your DriveMark score is what you will need to share with Allianz or Etiqa when you buy a new car and the comprehensive motor insurance is five times more expensive than third-party insurance. If you have a good driving profile as indicated by your DriveMark score, you will then want a UBI (usage-based insurance) discount.