Cermat Madani risk-based motor insurance pricing via RAPC, where your premium can go down or up

Cermat Madani is built around a mechanism called RAPC, short for Risk Adjusted Premium Computation. In plain terms, RAPC is a data-driven model that prices your car insurance premium according to how risky you actually are as a driver, rather than the broad, vehicle-centric factors (car age and type, location, NCD band) that have traditionally dominated car insurance pricing in Malaysia.

The assessment draws on JPJ data, and the framework spells out the inputs: your driving licence record, vehicle record, traffic summons history, accident record, past insurance claims, and the type and usage of your vehicle. These are integrated across three parties – JPJ, ISM (Insurance Services Malaysia, the industry’s central data house) and the insurers themselves – so a single, more accurate risk profile can be built for each motorist.

At the planned launch, the data used are JPJ records integrated with PDRM; summonses issued by local authorities (PBT) are not factored in for now. And the interesting thing is premiums move both ways. It can go down if you’re a law abiding citizen, but it can also go up vice versa.

Low-risk drivers – clean summons record, not blacklisted, good driving history, low claims – are rewarded with lower premiums. High-risk drivers – many outstanding summonses, a poor accident record, frequent insurance claims, or a JPJ blacklist – will pay more. That is the logic of genuine risk-based pricing, and it’s the part that will generate the most debate once it actually bites, because it does not mean “discount for everyone”, but instead it says “you pay what your record says you should.”

And bear in mind motorists could eventually be assessed based on actual driving data using telematics, with real driving behaviour feeding directly into what they pay.

Speaking of rebates, if your car insurance and road tax is up for renewal soon, you can use our Paul Tan Insurance service with the promo code PAULTAN for 10% off your premium.

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