November 10, 2017

We have been maintaining the case for some time, that insurers must look towards a platform-agnostic approach to driver data. Telematics technology is continuing to evolve and different data sources are vying for dominance: from the hard-wired connected car, the OBD port, Black Boxes, plug-in 12V dongles, smart phone apps, and possibly other data sources as-yet unknown.

Questions meanwhile have cast a shadow over data currently being derived from the vehicle OBD (onboard diagnostics) port. Several articles recently have pointed to the fact that car makers intend to progressively close the OBD port for any uses whilst the vehicle is in motion.

It’s been known for some time that vehicle OEMs were moving towards tighter controls. After all it is an access point not originally designed for use while the vehicle is being driven, but to give access to the engine and emission reduction systems and diagnostics data, to repair shops and other third parties.

Platforms designed in the pre-connected era are now being connected in multiple ways. Vehicles today are part of a complex system-of-systems, that come with a number of vulnerabilities. 

In the Internet of Things, this includes everything from Bluetooth, to Near-field Communication (NFC) devices, cellular connections and the USB and OBD port, all access points which are being pushed to new uses.

System-of-systems becoming hard to predict

From the viewpoint of the OEMs, there are product liability issues – and data protection issues – to be considered when giving external access to vehicle data. Vehicles do sometimes catch fire. Vehicles do sometimes unexpectedly run in safe, or diagnostics, mode. High volume data traffic can in some cases lead to interference with features such as air-conditioning. Car thieves can, at least in theory, plug a laptop into the OBD port and take full control, overriding any immobiliser devices.

The vehicle OEMs have begun to release vehicles with no OBD port, despite the fact that a vast service industry has been built up around it: such as fleet management, remote diagnostics, eco-driving, remote door locking and unlocking, keyless start, and of course telematics insurance.

Automakers agree that a hard-wired system offers more proprietary data, and functions, than a system based on an OBD port. Meanwhile, any large insurer that has placed a large bet on the OBD port being the preferred data platform, could be wishing they had hedged their bets.

More and more insurance companies who launched with a ‘go-it-alone’ approach to telematics insurance products are finding that the scale of the global challenges, working with different vehicle types and data sources, are very challenging and requiring a global approach to agreements, across platforms.

Recent comments from BMW for example, indicate that more OEMs will opt for systems that shut down the OBD transfer, as soon as it detects the vehicle is being driven. Independent repairers would be able to keep access to diagnostics data by wireless, when the vehicle is at the workshop. And in a previous blog article we have commented on how we could expect the car makers to adopt more of a licensing approach to giving access to the data, with consumer choice at the centre, rather than giving free access.

For auto manufacturers, the issues of safety, cyber security and maintaining the integrity of their warranties are very real. On their part, they need to compete against the newcomers like Apple, Google, Tesla or Amazon who are moving into the world of the connected vehicle.

Data reliability needed to grow telematics

At the same time insurers and all parties with a stake in the connected car are looking towards a platform that is open, standardised, independent and able to provide an industry-wide, normalised data set. In this way we can start to think of the concept of the ‘Extended Vehicle’, where all involved can gain access to the necessary cloud platform and APIs, whilst guaranteeing reliability, data quality, security and inter-operability.

The changes will, of course, lead to a large number of vehicles with active OBD ports that are not going to be shut down mid-life. This leaves an overhang of increasingly older vehicles, and a decreasing number of them over time, that will continue to be used for telematics insurance purposes.

Partnerships will continue to deliver these devices to customers, and at LexisNexis Risk Solutions we’re committed to servicing them, and to playing a role in maintaining security of the OBD port and OBD-derived data. But the future is likely to be about designing telematics programmes that match the age of the vehicle, and that match the driver age group.

It is becoming harder and harder to predict what is coming next, in terms of vehicle hardware and vehicle-derived data for insurance. This is why we believe the data should be just an asset that is delivered to the insurer, regardless of the source. Don’t build your insurance programme based on just one technology. The Global Telematics Platform is designed precisely to overcome these kinds of data matching, data management issues.

Follow the link to the LexisNexis Risk Solutions website for US insuranceUK insurance, or India insurance to find out more about how we support insurers.