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People in the startup world like to talk a lot about “disruption,” to the point where we’ve more or less issued a moratorium on the word. But sometimes, new tech or new applications of old tech really can make a fundamental impact on an industry.

For example, there’s a quiet revolt that has been brewing for a while now in the world of car insurance called usage-based insurance or UBI. Rather than calculating your insurance premiums on factors like your age, where you live and drive, and so on, the UBI model adapts your premiums constantly based on your driving behavior.

Rewarding good behavior

Raxel Telematics helps insurance firms, transportation companies, and ride-hailing providers track this behavior. The startup provides drivers with proprietary equipment that’s easy to install, use, and maintain. Its software then monitors the vehicle and scores the driver on things like rapid acceleration, sudden braking, unpredictable maneuvers, and overall speed.

Telematics can help upend traditional insurance industry criteria.

Founder and CEO Dmitry Rudash tells Tech in Asia that Raxel’s tech can benefit both drivers and companies. The data captured rewards good road behavior and results in lower insurance premiums, while insurance companies can identify erratic speedsters more easily and adjust their policies accordingly.

This can help upend traditional criteria with which the insurance industry perceives its customers. For example, younger drivers are usually considered more inexperienced and so their premiums are higher. But Raxel’s data shows that about 40 percent of drivers aged under 25, who have been driving for fewer than five years, are safer than people over 35 with 10 or more years of experience.

“Telematics ignore [factors like] age and gender for insurance premiums, evaluating your actual driving performance from day to day,” Dmitry says.

Raxel’s sensor is easy to install and small enough to keep from getting in the driver’s way.

Eastbound and down

Raxel’s business model lies in partnerships with insurers and transportation companies to deploy its tech in their fleets or the cars of their customers. Active mainly in Eastern Europe to date, it has partnered with firms like AXA and Liberty Insurance. Dmitry says the company’s revenue in 2015 was US$1 million, up from “a few thousand dollars” the previous year.

The startup recently moved its headquarters and business development operations from Russia to Singapore to take advantage of the opportunity it sees in Southeast Asia. “The growth rate for telematics in this region is the fastest in the world,” Dmitry says.

Southeast Asia and Eastern Europe share a lot of similarities when it comes to behavior on the road.

According to a study by telematics and location-based services advisory firm Ptolemus Consulting Group, over 100 million cars will be insured using telematics technology by 2020. The revenue from such premiums is expected to reach US$56 billion by that year (from about US$12.5 billion today). In Asia-Pacific, that revenue is expected to be US$5.5 billion by 2020, with US$2 billion coming from Southeast Asia.

Plus, Dmitry says, Southeast Asia and Eastern Europe share a lot of similarities when it comes to behavior on the road, which makes Raxel’s tech and data a good fit for the region.

He adds that the data it has gathered will give the startup an edge over competitors in the area – like Thailand-based Drvr, which uses telematics to improve the logistics space. “Raxel has, for several years, gathered a huge mass of personalized data coming from almost all of our customers that has been used to enhance, implement, and calibrate our scoring model and algorithm,” Dmitry explains.

Raxel raised an undisclosed amount of seed funding from Singapore-based Phystech Ventures in August 2015.

Try before you buy

Raxel has inaugurated its arrival in Singapore by partnering with local insurance cooperative NTUC Income. Under the deal, the startup will offer analytics and customer risk assessment services to NTUC Income, allowing the larger company to implement usage-based insurance schemes for its Singaporean customers.

Besides those customers, a mobile app will also be available to drivers who want to “try before they buy,” says Dmitry. “They can have their driving behaviors evaluated, before becoming NTUC Income motor insurance customers to enjoy the discount if they are eligible.”

In Singapore, AXA also uses a pay-as-you-go car insurance scheme and has partnered with ride-hailing provider Grab. The two companies want to use telematics technology to incentivize better driving and improve road safety.

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