Raxel Telematics, which makes devices that track drivers' behaviour, has
sealed deals with two Singapore insurers and will start offering the country's
first pay-how-you-drive motor insurance policies from October.
Insurers have long used group-based statistics, such as age and driving
experience, to determine a driver's risk profile and the premiums he pays.
But from October, drivers who plug a Raxel dongle into their car or install
the Raxel mobile app on their phone could get lower premiums, depending on how
safe a driving score they get at the end of each trip they make.
The scores take into account factors like how often drivers speed or make
harsh manoeuvres, how smoothly they brake, and how often they drive between 11pm
and 6am, when reaction times are statistically duller.
These data points are picked up by sensors and transmitted wirelessly to
Raxel's cloud for analysis.
Vehicle telematics is not new - insurer Progressive put its first behaviour
tracking devices on trial in 1998 - but telematics-based insurance policies
really kicked off only a few years ago as technology costs fell and smartphone
penetration rose, Raxel chief executive Dmitry Rudash told The Straits
"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," said Mr Rudash yesterday.
Raxel, which was founded in 2013 by a team of Russian physicists and
mathematicians, opened its first overseas headquarters in Suntec City this
month, lured by Singapore's status as a transport hub.
In May, insurer AXA and ride-sharing app Grab launched a pay-as-you-drive
policy for Grab drivers, which varies based on their mileage. Raxel takes this
"Our policy price depends not only on mileage, but how, when and where you
drive," said Mr Rudash.
Insurers can also use the predictive technology to refuse to sell policies to
risky drivers. Mr Rudash's data in Russia and Ukraine shows that 7 per cent of
drivers are involved in three accidents in one year.
"The best idea is not to sell insurance to these guys. They can be insured by
In Russia and Ukraine, Raxel has also linked up with employers in the
ride-sharing industry to make the roads safer.
"There are 25 to 30 per cent fewer accidents when you incorporate a driver's
safety rating into his rewards system," he said.
Raxel, which has 28 staff in Russia and Ukraine, made close to US$1 million
(S$1.34 million) in revenue last year. Its clients include AXA and Liberty
Mutual. The Singapore office plans to hire five people by the end of the year,
including one or two machine-learning analysts who study algorithms that can
make predictions on data.
A version of this article appeared in the print
edition of The Straits Times on August 16, 2016, with the headline
'Pay-how-you-drive insurance policies to debut here'. Print Edition | Subscribe