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First Malaysian InsurTech Collab Takes Off

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Source: AIR | Oct 2017

Malaysia InsurTech Motor Technology

KATSANA is on a roll, recently inking MoU with several insurers including Allianz Malaysia, Axiata Business Services and both Etiqa Insurance and Etiqa Takaful, to collaborate on boosting the adoption of usage-based insurance (UBI) in Malaysia. Managing director and co-founder Syed Ahmad Fuqaha shares his plans with us.
By Chia Hoe Seng
Q. Could you share how KATSANA started and where you hope to take it?
Mr Syed Ahmad Fuqaha: A personal and unpleasant experience with car theft was what motivated me to start KATSANA. Car theft is a serious problem in Malaysia, so I wanted to tackle the problem of recovering stolen cars through the use of telematics devices.
   Since KATSANA’s inception in 2013, we have successfully resolved and recovered 56 out of 59 stolen car cases we were engaged with. We believe the reason for failing to recover the remaining cars is due to the illegal syndicate involvement.
   Besides recovering stolen cars, I believe that KATSANA can take on the social responsibility of making Malaysian roads a safer place. Fatalities on the road are second to Thailand in the region, with an estimated 20 deaths daily. People do not realise they are bad drivers based on their current behaviours. We hope that through our data driven approach, by showing them their driving scores, it motivates them to be a safer driver.
Q. How would you assess the current UBI Llandscape in Malaysia?
Mr Fuqaha: Insurers are currently adopting a wait-and-see approach in implementing UBI. Many of them are turned off by the high cost of implementation, as the bulk of the cost is lies in purchasing hardware devices to fit into cars. Hence, scalability remains the biggest challenge in achieving mass adoption.
Q. How is KATSANA overcoming cost and scalability challenges?
Mr Fuqaha: We want to deliver a seamless on-boarding experience for our customers, and at the same time without requiring them to purchase expensive telematics devices – which might turn off many who are still sceptical of the benefits UBI offers.
Hence, we developed DriveMark, an independent collector of driving profiles data from users and insurers. It is an on-road safety mobile app that records users’ driving behaviour and “trains” them to be safer. It intelligently detects driving attitude, which is later translated into a score. Unsafe driving actions like harsh braking and/or acceleration, as well as sharp cornering contribute to a lower score. The higher a user scores, the better driver he/she is.
We launched DriveMark in July 2017 and it is currently available on both iOS and Android versions for smartphones.
Q. There are still reservations in using a mobile app as opposed to physically fitted devices. What makes KATSANA’s approach (using the former) stand out?
Mr Fuqaha: At this stage, we are not too concerned with an individual’s driving score. What we really want is to obtain and understand driving behaviour collectively through cohort analysis. This will be the starting data set that insurers can work on to truly understand the risk profiles of their customers. The data will be analysed and refined further for more accurate risk profiling.
   There are also other critical information – such as mileage, driving routes, schedule and demographics – that we need to collect to continually better risk profiling.
Of course, for drivers who want more precise driving data, there is an option of purchasing the hardware. .
Q. What current insights can you draw from data collected thus far?
Mr Fuqaha: We currently have about 9,000 users since the launch of DriveMark, of which 1,500 are Grab & Uber drivers. We are expecting this figure to increase as DriveMark has a social feature, which allows users to monitor their family members’ driving behaviours.
   Preliminary observations from the data we collected indicate that women drivers – who make up 15% of users – tend to drive shorter distances. We found that women drove an average of 221km/driver compared to men, who clocked an average of 536km/driver between July and September 2017. Single men tend to be more unpredictable and erratic as they usually do not have a fixed driving routine, whereas married men tend to follow a more routine schedule, also acquiring higher idling time. Interestingly, married men also almost make no trips at night with the exception of festive holidays.
Q. What’s in it for drivers?
Mr Fuqaha: While the emphasis of DriveMark is to improve driving behaviours, there is a gamification element added to engage the drivers – drivers compete against each other in a leader board challenge. Winners are rewarded with prizes at the end of the campaigns. At any instant, if bad driving is detected, the result is visible to members of the social group and peer pressure will play a critical role in ensuring that the driver improve his/her driving behaviour.
Rather than penalising drivers for bad driving, we intend to use the driver’s social group to encourage them to improve over time. 
   In the long run, DriveMark aims to improve road behaviours and reward safe driving through the reduction of premiums by insurers which is now possible with the recent detariffication of the motor market. In the future, insurers can also offer a tailored family motor insurance products, based on the groups’ driving data. A 
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