How does Cermat Madani leverage data for insurance pricing?

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Cermat Madani Utilises Data to Refine Motor Insurance Pricing and Reward Safe Drivers

The Cermat Madani initiative is designed to enhance motor insurance pricing by incorporating data-driven assessments of driving behaviour. This framework introduces an additional risk-based rebate, layered on top of existing no-claim discounts, to provide greater financial incentives for motorists who demonstrate responsible driving habits. The ultimate goal is to create a more equitable insurance system that accurately reflects individual risk profiles and encourages safer roads.
Additional Rebates for Low-Risk Drivers

Under Cermat Madani, motorists assessed as low-risk are eligible for an additional insurance rebate of up to 10 per cent. This benefit is contingent upon evaluation by participating insurers and takaful operators. It is important to note that this additional rebate is distinct from commercial discounts and is specifically tied to an individual's risk profiling based on their driving behaviour.
Enhanced Savings Potential

When combined with the existing no-claim discount (NCD), which can reach up to 55 per cent, eligible motorists under Cermat Madani could potentially achieve total savings of up to 65 per cent on their motor insurance premiums. This layered approach to savings aims to significantly reward drivers who consistently maintain a good driving record and minimise risk.
Phased Implementation and Data Integration

The implementation of Cermat Madani will occur in phases, beginning with a collaborative effort between the government and the insurance and takaful industry. This initial phase will focus on establishing a structured framework specifically for rewarding safe drivers. Subsequently, the system is intended to be strengthened through the expanded use of data, which will further improve the accuracy and fairness of risk-based pricing mechanisms.
Encouraging Safer Driving Through Financial Incentives

Cermat Madani functions not only as a reform of the motor insurance system but also as a road safety intervention. By using economic incentives, the initiative seeks to positively influence driving behaviour and foster a culture of safer, more responsible, and disciplined driving. The underlying principle is that responsible drivers, those who frequently commit offences or exhibit higher-risk profiles, should not be assessed in the same manner.

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How does Cermat Madani leverage data for insurance pricing?

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