How will Cermat Madani use data to assess driver risk?

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Cermat Madani to Incorporate Data for Driver Risk Assessment

The Cermat Madani initiative will introduce an additional risk-based rebate on top of existing no-claim discounts, aiming to better reflect driving behaviour in insurance pricing. Drivers assessed as low-risk may be eligible for an additional rebate of up to 10 per cent, potentially leading to total savings of up to 65 per cent when combined with the existing no-claim discount (NCD) of up to 55 per cent. This framework is designed to reward responsible drivers by differentiating them from those with higher-risk driving records.
Phased Implementation of Data-Driven Pricing

The initiative will be rolled out in stages, 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 designed to reward safe drivers. Subsequent phases will involve the broader application of data to enhance the accuracy and fairness of risk-based pricing mechanisms.
Focus on Individual Risk Profiling

The additional rebate under Cermat Madani is explicitly based on individual risk profiling, distinguishing it from general commercial discounts or promotional offers. This approach ensures that the financial benefits are directly tied to a driver's assessed risk level, rather than broader marketing strategies. Participating insurers and takaful operators will be responsible for evaluating individual motorists to determine their eligibility for these premium benefits.
Rewarding Responsible Driving Behaviour

The core principle behind Cermat Madani is to ensure that responsible drivers are not treated the same as those with more problematic driving histories. By using relevant information and data in assessing motor insurance risk, the initiative seeks to encourage a culture of safer, more responsible, and disciplined driving. This is viewed not just as an insurance reform but as a road safety intervention utilising economic incentives to influence driving behaviour positively.

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How will Cermat Madani use data to assess driver risk?

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