Q&A: Telematics, UBI and deep packet inspection
Director of global partnerships at the Swedish M2M connectivity specialist Telenor Connexion, Rémi Demerlé is an expert on automotive, insurance and intelligent transport systems. Before joining the company in 2009, he worked for Hewlett-Packard, Hitachi, Sanmina and Sierra Wireless. He talked to TU contributor Jan Stojaspal about how deep packet inspection, a service Telenor Connexion just launched, can help UBI insurers become resellers of value-added services.
What is deep packet inspection, and what are its potential uses in insurance telematics?
Deep packet inspection is a way to identify different data streams [over a single M2M connection] and to calculate, in real time and down to the kilobyte, their actual bandwidth consumption. Essentially, we provide the intelligence for insurers to be able to split their data streams and to bill based on that.
How was this done before?
You could have two SIM cards. You could use Bluetooth tethering in order to use the driver’s smartphone for some services. Or you could have multiple APNs, or access points to network, on the same SIM card to help differentiate the traffic. But each APN has a cost, and each APN entails more development, more integration. We now have the capacity to have one SIM card, one APN, and still are able to split billing between different kinds of traffic.
If I am an insurance telematics provider, how can I benefit, other than from money saved on development and integration?
You benefit if you want to include into your business model other stakeholders, thus becoming a kind of department store that enables access to certain data sets. But how do you value this? What’s the impact of a fleet manager asking for location every minute as compared to someone asking once a month for the mileage driven?
Even if the addition of a second SIM card or the addition of other APNs seems to be very simple, the integration costs are very high because managing applications with different APNs requires your system to be much more multitasked, to have different configuration settings. The modem cannot handle a communication with two SIM cards at the same card. It has to switch off the first station in order to initiate the second station. So a second SIM card is not a good solution. (For more on SIM cards, see Q&A: Telematics and the evolution of the SIM card.)
In this sense, deep packet inspection sounds like a key precondition to providers of insurance telematics becoming resellers of other value-added services.
Yes, because with [deep packet inspection] they can come up with a very accurate price per use.
I am surprised it has not been done before. The need for such a service seems obvious.
The difficulty is not only in the precision of analysis of every packet transmitted but also on the server side, to collect the accurate information. Pure packet inspection has been used in other situations for controlling access to the Internet. But as of today with mobile operators, with GSM, it has not been so much used and implemented. We now have demonstrated that it’s ready and can be used for M2M.
Are there other ways in which wireless carriers can play a role in the insurance telematics area?
Because we have years of experience with key reference customers, such as Octo Telematics or MyDrive, we understand that insurance telematics require specific subscription timeframes. Typically, an insurance policy is for six months or twelve months, and the business model must be adapted to that. Another requirement is the ability to suspend subscriptions when a driver decides to change for another insurance contract, and to allow for the time needed to retrofit the [insurance telematics] unit. We have the tools to pause subscriptions over the existing Telenor platform. So that’s another example of using technology to support flexibility of a business model.
Jan Stojaspal is a regular contributor to TU.
For more on UBI, see Industry insight: Insurance telematics.
For more on data, see Industry insight: Telematics and data.
Listen to a podcast with Rémi Demerlé here.
For more on insurance telematics, see Special report: Insurance telematics and visit Insurance Telematics Europe 2013on May 7-8 in London.
For all the latest telematics trends, check out Telematics India and South Asia 2013 on April 17-18 in Bangalore, Data Business for Connected Vehicles Japan 2013 on May 15-16 in Tokyo, Telematics Detroit 2013 on June 5-6, Content & Apps for Automotive Europe 2013 on June 18-19 in Munich, V2V & V2I for Auto Safety USA 2013 on July 9-10 in Novi, MI, Insurance Telematics USA 2013 on September 4-5 in Chicago, Telematics Russia 2013 on September 9-10 in Moscow and Telematics Munich 2013 on November 11-12.
For exclusive insurance telematics business analysis and insight, read TU’s Smart Vehicle Technology: The Future of Insurance Telematics report.
