Pay-how-you-drive insurance to be launched in Singapore

New telematics policy incorporates driving behavior and times in computing a safety rating which helps determine premiums

Insurance News

By Gabriel Olano

Two motor insurers in Singapore have entered deals with Raxel Telematics to begin offering the first pay-how-you-drive auto insurance policies in the country. The products are expected to be launched in October.
For the longest time, insurers have used group-based statistics such as age, driving experience, and accident history to determine a driver’s risks and premiums they need to pay. Raxel takes it a bit further, as policyholders who plug a dongle into their vehicles or install an app on their phone could get discounts on their premiums, depending on a safe driving rating computed at the end of each trip.
The rating takes into account driving behavior, such as frequency of speeding, sudden turns, rough braking, and even how often one drives between 11pm to 6am, when humans’ reaction times are slower and it’s likely to be more dangerous out on the road.
Raxel CEO Dmitry Rudash told The Straits Times that while vehicle telematics is not a new technology, it has really picked up in the recent years due to lower technology costs and higher penetration of gadgets such as smartphones.
"In just a few months, we have created a pipeline the size of several million dollars, and have already signed partnership deals with insurance and transportation companies," Rudash added.
Raxel was founded in 2013 by Russian physicists and mathematicians and decided to open its first overseas branch in Singapore due to its status as a transport hub in Southeast Asia. It has 28 staff in Russia and Ukraine, and made close to US$1m in revenue last year, with AXA and Liberty Mutual among its top clients. 
In May, AXA and ride-share app Grab launched a pay-as-you-drive policy for Grab drivers, but Raxel improves on this by factoring in when, where, and how one drives.
Insurance providers can also use data provided by telematics to identify risky drivers who can be rejected when they apply to buy insurance.

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