CERMAT MADANI To Support Risk-Based Motor Insurance, Takaful Pricing - MTA
KUALA LUMPUR, June 10 (Bernama) -- The CERMAT MADANI initiative could serve as a stepping stone towards a more comprehensive risk-based motor insurance and takaful pricing framework, where safer drivers are rewarded with lower premiums and contributions.
Malaysian Takaful Association (MTA) chief executive officer Mohd Radzuan Mohamed said the initiative goes beyond offering discounts by encouraging safer driving behaviour through the use of traffic offence records and, potentially, telematics data in the future.
The initiative is aligned with the gradual liberalisation of motor insurance and takaful pricing, which allows operators greater flexibility in determining premiums and contributions based on individual risk profiles.
“If a risk-based pricing framework is implemented, taking into account not only the age and type of the vehicle but also driving behaviour, these factors will likely be reflected in the premium charged,” he told reporters after the 2025 Takaful Industry Performance announcement here today.
Mohd Radzuan said the association would work closely with the Ministry of Transport (MOT) to support the implementation of the programme and encourage broader participation from insurance and takaful operators.
Yesterday, Transport Minister Anthony Loke announced that motorists who practise safe driving and who renew insurance via the MYJPJ application can enjoy a premium rebate of up to 10 per cent through the CERMAT MADANI initiative.
The participating insurance companies will use a risk score generated through an artificial intelligence (AI) system based on driver record data in the MySikap system to assist in the premium assessment process.
Mohd Radzuan said the takaful industry is preparing for the pilot implementation of the Medical and Health Insurance/Takaful (MHIT) base plan in the second half of 2026.
The industry and life insurers have been working closely with Bank Negara Malaysia (BNM) through various task forces and working groups to develop the product.
He said further details on the implementation framework are expected to be shared by BNM during an upcoming town hall session, which will provide clarity on the six-month pilot phase running until Dec 31, 2026.
Mohd Radzuan noted that public perception of the initiative remains limited at this stage due to the confidential nature of the development process and the lack of publicly available information.
“Until then, our understanding remains limited. Even if there is a perception, it is likely to be inaccurate due to insufficient information from both the public and the industry,” he said.
Mohd Radzuan added that while operators are awaiting confirmation on participation in the pilot phase, all insurance and takaful players have been invited to submit their interest to participate.
“We have to be ready because that is the aspiration. It is the goal, and we have to ensure that we are on that platform,” he said.
-- BERNAMA
