Data analytics has become such a worldwide phenomenon so much so The Economist recently declared that data is the new oil. Companies have been using analytics to help them understand customers, allocate resources and save money. United Parcel Services (UPS), a company that provides courier services saves on petrol and miles driven when their analytics tell them to maximize the number of right turn their truck make at the right place at the right time, which results in 28 million miles and three million gallons of fuel saved. Such a simple and elegant solution yet it brings huge tangible impacts to the company through its fleet management.
Data analytics is relatively new to Malaysian companies let alone the one that leverages on analytics to provide end-to-end fleet management. However, we already have in our fold companies that are quite mature in their analytics to do just that in Katsana, a data company that aims to make the road safer through data and analytics by providing fleet management solutions to segments that include personal drivers, fleet operators and insurers. It was founded by two young Malaysians Syed Fuqaha and Mohd Irwan Ibrahim in 2013 based on the former’s experience when his car was stolen in Petaling Jaya. What they discovered at that time was that stolen car recovery solution was quite archaic and ineffective. That leads them to the first pillar of their business, which is to develop an enhanced solution to track car.
It does not take long before their solution to bear fruit when they recovered the first stolen car that adopts their solution in 2014. Fast forward 4 years later, they have now recovered 61 out of 64 stolen cars, a 95% success rate which is a remarkable feat for such a young company. The potential of the solution starts to entice big corporations like Hertz, Sime Darby and Puncak Niaga among others as they see value in the product in providing extra security to their fleet. At the same time, they also started to develop algorithm that can track drivers’ behavior and driving pattern which gives an additional value to companies in enhancing accountability of drivers and save cost.
“Our algorithm can detect drivers who drive fast, take steep corner, who tends to sleep on the vehicle. Within 12 months, our algorithm seems to work. It reduces risky incidents of the subscribed vehicles by 62%.”
This quick wins and success leads to another round of epiphany for them to develop another solution that will change the way we go about motor insurance tremendously. In Malaysia, car insurance is 30 years behind as premium in Malaysia is solely based on the value of a car when in fact confluent of factors may affect the probability of a crash which includes behavior of drivers. When behavior of drivers is not included in the calculation of premium, it is sort of unfair for the whole market because the good drivers absorbs the risk for everyone when in fact only a small pool of driver tends to crash a lot.
For this next round of business development journey, Katsana already has the technical know-how from their previous fleet management solutions, now it is just a matter of collecting more data, perfecting their drivers scoring model and finding insurance companies that are willing to adopt this standard, a standard that has been adopted so far by Etiqa and Alliance. What Katsana is developing is essentially a credit score for motor insurance, akin to Central Credit Reference Information System (CCRIS) in the banking industry.
What starts as a solution to a personal problem ultimately leads to a bigger mission of making roads in Malaysia (and eventually in the region) a safer place for everyone!