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Insurance Telematics Europe 2014

06/05/2014 - 07/05/2014, Novotel London West, UK

Telematics, Insurers and the Consumer Collide: Harness ‘Big Data’ to Create Product Differentiation, Engage & Empower the End-User

Pan-European eCall: Boon or bust? Part II

The pan-European eCall is coming – eventually. But will it be too late to be the essential traffic safety service it was meant to be? And will anyone still profit from it? In the second of a two-part series, Siegfried Mortkowitz reports.

The question of how to profit from the eCall mandate has become something of a controversy. Both Bonte and Rooke say that there are few chances to leverage the eCall device for other telematics services. It was simply not designed for purpose.

Winners and losers

Magnus Johansson, director of business development at WirelessCar, is very bullish on the idea. “This is a big opportunity for the telematics industry,” he says. “We should be grateful to the [European Commission] that they are mandating this technology.”

While saying that the eCall service is not the blockbuster opening the industry had wanted, it is a good and appreciated service and could, if handled well, be lucrative. “The box is too valuable to be used only for eCall,” Johansson says. “If OEMs put it in only for the minimal service and only to be compliant, then it is only added cost. So you must make sure, as an OEM, when buying the device and the SIM card that it can be used for other telematics services.”

Cyril Zeller, vice president, global telematics, Telit Wireless Solutions, agrees. “The European Commission has said that they have no objection to the box being used for [other] services as long as the eCall’s safety and privacy requirements are ensured,” he says.

Visser says that following the recommendation of the European Parliament, the European Commission is currently considering the use of the eCall device for pan-European eCall as well as for third-party supplier services, something that was not part of the original spec.

For Zeller, this means OEMs could build the telematics box for location-based services on top of the eCall device. “This means using the same hardware platform for several applications, like PCs or smartphones that are used for a number of different applications,” he explains. “The handset industry moved from cell phones (mono-app) to smartphones (multi-apps). The telematics industry must do the same in order to grow much faster. eCall is giving us a great opportunity to do so if we take this opportunity to design eCall boxes that can support additional services, ideally in an environment opened to third-party developers.”

Like Johansson, Zeller is critical of those in the industry, whether Tier 1s or car OEMs, who “see only the cost, but don’t see the additional revenues.”He foresees the eCall device as the basis of “an open platform which allows easy integration of third-party services in the box.”

Without citing the name of the carmaker, Johansson says an Asian OEM will soon be introducing on the European market a range of what he calls “attractive services for the public,” including connected navigation, remote vehicle control and remote diagnostics. These value-added services will be inexpensive because they will be built onto the eCall device, he says. “[eCall] is a competition-neutral device, so the additional cost of adding other services is much lower,” Johansson says.

The savings on these services could take the sting out of the sticker price add-on from the eCall device. “There isn’t a single carmaker that doesn’t have something cooking” related to the eCall mandate, Johansson says.

Guenther Kraft, director, devices & components, Harman International, says eCall is good news for his company and carmakers, in principle, “because legal-driven technologies provide good volume.”

Kraft says his company was providing two solutions based on the eCall device. “Besides eCall, the features provided to end customers concern service calls, remote services, tracking, Internet access, over-the-air programming and remote diagnostics,” he says.   

Because eCall works on 2G network connectivity, Harman is offering three solutions for telematics services requiring greater bandwidths, including the use of a separate integrated modem for telematics and high-speed data links.

Retrofitting

The eCall mandate will create one additional business opportunity, Visser says: retrofitting of the device for vehicles manufactured before the device became mandatory.

According to him, consumers will have three options to have the eCall device added to their vehicle after purchase: the dealer, do-it-yourself hands-free retrofit or via an alternative emergency device, such as an Automatic External Defibrillator (AED), which reduces the response time to treat ventricular fibrillation and tachycardias, giving victims a much better chance of survival.

The dealer option is controlled by the carmaker and is the most costly, says Visser, who is chairman of the eCall retrofit task force within HeERO. He estimates the cost to the consumer of a dealer-executed retrofit at between €800 and €1,300.

This will present opportunities for insurance companies and automobile clubs, who would sell the devices for about €100, providing consumers with an inexpensive option.The insurers could be interested in setting up pay-as-you-drive contracts via the eCall device, or in using it as a basis for collecting driver-behavior data.

eCall in the future

While the eventual deployment of the mandated eCall system will almost certainly not be the “killer” service many in the telematics and auto industry were hoping for when the concept was first proposed, there is optimism that it will give a boost to both telematics and car revenues.

However, even its most optimistic proponents believe that the idea must still be sold to the very parties that could profit from it: tier 1s and OEMs.

As with most new ideas that involve added cost, once the device is shown to be not only an efficient way to save lives, but also a smart way to increase sales and revenues, the resistance will no doubt eventually crumble.

However, further delays to implementation, which are far from unlikely, can only decrease its attractiveness.

One reason, Bonte points out, is the development of advanced driver assistance systems (ADAS), which seek to prevent accidents, whereas eCall functions only after an accident has already occurred.

“eCall will save some 2,000 lives a year,” he says. “ADAS is much more aggressive. It will save 10,000 to 15,000 lives. I’m not saying [eCall] is not important – we should have it – but we can do better. It would be better if governments mandated ADAS.”

In another two years, ADAS will no doubt be far more effective in saving lives that eCall, and there will be more OEMs with proprietary emergency call systems, making eCall seem even less of a necessity.

Furthermore, the rapid growth of 4G LTE connectivity and the development of the autonomous car may render eCall almost moot. Says Bonte: “The eCall modem is not a future-proof solution. And carmakers don’t want to replace hardware during the lifetime of the car.”

Rooke also sees a closing time window for the system. “Ultimately, as cars become more autonomous and outfitted with more mission-critical safety systems, it will probably put eCall into the background,“ he says. "Nevertheless, the system has a definite role in casualty reduction."

Siegfried Mortkowitz is a regular contributor to TU.

(For part one of the series, see Pan-European eCall: Boon or bust? Part I. For more on eCall and other European Union mandates, see The impact of eCall, EETS and ITP on fleet telematics, part IThe impact of eCall, EETS and ITP on fleet telematics, part II, and The impact of eCall, EETS and ITP on fleet telematics, part III.)

For all the latest telematics trends, check out Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Insurance Telematics Europe 2014 on May 6-7 in London, Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, and V2X and Auto Safety USA 2014 on July 8-9 in Novi, Michigan.

For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013The Automotive HMI Report 2013Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.

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Insurance Telematics Europe 2014

06/05/2014 - 07/05/2014, Novotel London West, UK

Telematics, Insurers and the Consumer Collide: Harness ‘Big Data’ to Create Product Differentiation, Engage & Empower the End-User