This presentation looks at the OBD technology, what is designed for, how it works and how it can be used. The slides are a very dense summary of the benefits and issues related to OBD dongles in the UBI sector. The author is Matt Noel, senior consultant at PTOLEMUS

1. The role of OBD in the 2015
connected car market
SMi’s Telematics for Usage-Based Insurance
Conference
London – 19th February 2015 - PTOLEMUS intellectual property

2. The On-Board Diagnostics gives access to the
status of various vehicle sub-systems
• The OBD is originally designed to reduce emissions by
monitoring the performance of major engine components,
• Introduced in the early 1980’s, the amount of diagnostic
information available has varied widely,
• Early versions of OBD were simply illuminating the
malfunction light on the dashboard,
• Modern OBD implementations use a standardised
communication port and a set of diagnostic trouble codes
• They can provide real-time data allowing to rapidly
identify and remedy vehicle and engine malfunction
• The OBD port is a public access point that enables
technicians to connect to the vehicle’s computer systems
Context
Source: PTOLEMUS 2

3. Source: PTOLEMUS
Standardising vehicle diagnostics has already taken 30 years
On-board diagnostic history
1969
Volkswagen
introduces the
first on-board
computer
system with
scanning
capability.
1975
Simple OBD
implementations
appear but no
standardisation.
1980
GM implements a
proprietary
interface and
protocol for testing
the ECM on
assembly lines.
(ALDL).
Implementation on
all US cars in 1981
for factory use only.
1988
The Society of
Automotive
Engineers (SAE)
recommends a
standardised
connector and set of
diagnostic test
signals.
1991
The California Air
Resources Board
requires that all
new vehicles sold
have basic OBD
capability.
The OBD-I
connector and
protocol are not
standardised.
1996
The OBD-II
specification is
made mandatory
for all cars sold in
the United States.
The DTCs and
connector
suggested by the
SAE are adopted.
2003
First remote
diagnostic
solutions are
launched in
Europe by
BMW and PSA
2004
The European
Union makes
EOBD
mandatory for
all diesel
vehicles sold in
the EU.
2013
Definition of World-
Wide Harmonized
On-Board
Diagnostics
requirements
(WWH-OBD ISO
27145)
2010
HD OBD (Heavy
Duty) specification is
made mandatory
for commercial
vehicles over 6.3
tons sold in the US.
1997
First remote
diagnostic
solution in the US
developed by GM
on its OnStar
product
2001
The European
Union makes
EOBD mandatory
for all petrol
vehicles sold in
the EU.
EOBD is
equivalent to
OBD-II standard
2011
Emergence of
remote diagnostic
solutions on
aftermarket using
OBD dongle &
GSM technologies
2008
OBD
implementati
on is
required on
light vehicle
in China.
3

4. OBD standards specify the type of diagnostic connector and
the list of parameters to monitor on all light vehicles
• The OBD-II, implemented in the US,
is based on a 16-pin connector defined
by the SAE J1962
• The SAE J1962 connector is required to
be within 2 feet (0.61 m) of the
steering wheel under the dashboard
• The European implementation of
EOBD is essentially the same as OBD-
II, with the same 16-pin connector
• The list of standard parameters to be
monitored is defined by the SAE 1979
• Diagnostic message structure is
defined by the SAE J1979 standard
• All vehicle manufacturers have to use
these standards worldwide
OBD standards
Source: PTOLEMUS 4

5. PTOLEMUS
Different OBD pinout combinations
5
The OBD is not a single language but a combination of
different protocols used to access the data
OBD protocols
Main protocols used worldwide
Battery
power
Chassis
ground
Signal
groundBus+
Bus-
SAE J1850 PWM
Battery
power
Chassis
ground
Signal
groundBus+
SAE J1850 VPW
Battery
power
Chassis
ground
Signal
ground K-Line
L-Line
ISO9141 &
KWP2000
Battery
power
Chassis
ground
Signal
ground
CAN high
CAN
low
CAN
Source: PTOLEMUS
• Car manufacturers use different languages
when their cars communicate with
diagnostic tools to transmit data
• The 5 main standardised protocols are:
• Most of car manufacturers do not use a
single protocol - Protocol used depends on
vehicle model and year
SAE J1850
PWM
SAE J1850
VPW
ISO 9141 &
KWP2000
CAN
SAE J1962 - EOBD standard
Language
used on
most petrol
Ford cars
from 2001
up to 2003,
Rover &
Land Rover
Language
used on
most
Chrysler &
Isuzu
vehicles
Language
used on
most other
European &
Asian cars
from 2001
Language
that should
be used on
all new cars
from 2008.
Many OEMs
use CAN
since 2003

6. PTOLEMUS
DTC format is standardised and is the same regardless the
OBD protocol used
Source: PTOLEMUS
Diagnostic trouble code format
• A DTC is a 5 characters code used to
identify a single vehicle default
- The first letter refers to the system being interrogated
(powertrain, body, chassis, network),
- The next character is 0 for public codes or 1 for
proprietary codes,
- The 3rd character is a number from 0 to 8 referring
to the vehicle sub-system concerned (fuel & air,
ignition, emission controls, speed & idle control,
computer or transmission)
- The last 2 characters (numbers or letters) refer to
the individual fault within each subsystem
• The SAE J1979 defines public codes
relating to emissions defaults that must be
used by all OEMs
• For other system defaults, OEMs may use
specific codes that are not standardised
6

7. The market opportunity
Source: PTOLEMUS
What can be done by using the vehicle OBD port?
OBD dongle
Crash reconstruction
Vehicle diagnostic
Usage-based insurance
Eco-driving
Roadside assistance
bCall
Fleet management
Engine emission control Engine performance
remapping
7

8. PTOLEMUS
0%
20%
40%
60%
80%
100%
2012 2013 2014 2015 2016
The market opportunity
Key factors
Within 2 years, OBD dongles will become the leading
technology to provide telematic insurance
Source: PTOLEMUS UBI Global Study
OBD dongles
Black boxes
Share of UBI policies by technology worldwide
(% of total market personal line policies)
Smartphones
Embedded devices
8
• OBD dongles offer crucial advantages to
insurers
- Self installable (no installation costs or
appointment needed)
- Seen by customers and can be part of the
marketing campaign (cf. Progressive's
Snapshot, Allianz’s Allie)
- Can be used to retrieve vehicle data
- Using Bluetooth, can be connected to
smartphones for driver feedback
• Used in the US since many years, they are
about to be fully undertaken in Europe too
- Major insurers have launched programmes
based on OBD dongles
- B2C car monitoring mobile apps with dongle
are growing significantly
- European roadside assistance companies are
also launching dongle-based offers

9. PTOLEMUS
Compatibility issues
Despite OBD port is mandatory on light vehicles in Europe,
dongles are not compatible with all of them
9
• While EOBD port format and location
are standardised, it is not always
accessible while driving
• Protocols implemented differ by
vehicle models & years
• There is no OBD compatibility list
established in Europe as all vehicles
would have to be tested
• A service promise based on OBD
dongles cannot be provided to all
vehicles & customers
• The dongle size is the major
compatibility issue
• Performing road tests is essential to
validate the sourcing of a dongle
Source: PTOLEMUS

10. Plugging an OBD device may have an effect
on the vehicle CAN network
• The OBD device creates an additional node to the
Controller Area Network (CAN)
• Broadcasting data at a wrong baud rate can crash the CAN
bus and disable the CAN traffic
- Connection to all CAN node traffic is interrupted including the
cluster, safety systems, power-train, body, chassis systems, etc.
- The engine ECU establishes itself in “defensive” mode. Safety
systems may be disabled
- The vehicle security data is also often “passed” along the CAN - The
ignition key may not be recognised by the engine ECU
• Running an “all systems scan” on vehicle has a high
probability to stall the engine
- Some diagnostics require vehicle sensors to be at a certain minimum
or maximum range value
- Most service tools include instruction stating that the vehicle must be
parked and ignition switch must be on to launch certain tests
- Superior devices include a scheduler to prevent these tests from being
performed while the car is being driven
Security issues
Source: PTOLEMUS 10

11. The vehicle warranty cannot be invalidated by
OEMs because of the use of the OBD port
• We have discussed the legal issues surrounding the
plugging of an OBD dongle with Osborne Clarke, our
partner law firm specialised in technology
• OEMs are not able to claim warranty limitations for the
use of the OBD port
- The OBD port has been created specifically to allow independent
repairers to access vehicle information and obtain public DTCs
- The OBD port only provides measurement data – no access to source
codes, copyright materials or intellectual properties
- The EU commission provides clear guidance saying that
manufacturers cannot conditions their warranties on the vehicle
being serviced within authorised workshops
• But there are two liabilities to avoid vehicle’s systems
data traffic interferences
- OEMs must develop systems recognising diagnostic shifts and
prioritise vehicle safety & running operations
- Dongle manufacturers must ensure that their devices behave in a
safe way and will not disturb vehicle data traffic on public road
Legal issues
Source: PTOLEMUS 11

12. The OBD port must be opened to all 3rd parties but they must
ensure that security requirements be fulfil
• All OEMs must implement EOBD
standards on light vehicles and share
public codes through the OBD port
• Plugging an OBD dongle into the port
create an additional node to the CAN
network and may interfere with it
• It can crash the OBD port or creates
more serious issues as engine stalling
or safety features malfunction
• On a legal view, the use OBD port has
no effect on the vehicle warranty but
insurers are ultimately liable
• Define precisely what data you
require from the OBD and perform
proper field tests to ensure security
Synthesis
Source: PTOLEMUS 12
Thank you!

13. Matthieu Noël, Senior Consultant
mnoel@ptolemus.com
+33 6 13 34 70 56
London – 19th February 2015 - PTOLEMUS intellectual property
SMi’s Telematics for Usage-Based Insurance
Conference

14. PTOLEMUS
PTOLEMUS in a nutshell
Who we are
• The 1st
international strategy consulting firm
specialised in telematics and location-based
services
• Strategy combined with real industry
expertise and operational experience
• Focus on achieving results for our clients
• Close links with the mobility ecosystem
• Presence in 7 countries - Austria, Belgium,
France, Germany, Italy, the UK & the US
from Ptolemy, the Egyptian
savant who built the 1st map of
the world in the 2rd century
• Over 20 consultants bringing 160 years of
aggregated experience in telematics, geo-
location & mobility
• 50 assignments completed in last 5 years
• Over $1 million revenues in 2014
Revenues generated ($'000s)
0
200
400
600
800
1 000
1 200
1 400
1 600
2009 2010 2011 2012 2013 2014 2015 F 2016 F
Consulting
Research projects
Research reports
14

15. PTOLEMUS in a nutshell
An international management team
Brussels Frederic Bruneteau, Managing Director
•MS. HEC Paris, MS. CEMS University of Cologne
•Background: TomTom, Vodafone, Arthur D. Little, BNP Paribas
•Specialties: LBS, telematics (eCall, UBI, etc.), mobile networks
Frederic Lassara, Senior Expert
•MSc. Management, Marseille Business School, Bachelor of Laws,
University of Aix-Marseille & IHEDN
•Background: PSA Peugeot Citroën, Covisint, Datops
•Specialties: Automotive, telematics
Chicago Valerie Shuman, Senior Expert
• BA with highest honors from the University of Michigan
•Background: Navteq, Ygomi, CVTA, SEI, Verety
•Specialties: Connected vehicle services & content
London Hamburg Meinrad Zeller, Senior Expert
•MS Mathematics & Computer Science, Univ. of Göttingen
•Background: TomTom, Philips Automotive, Philips Semiconductors
•Specialties: Automotive telematics & electronics
Milan Sergio Tusa, Associate Partner
•MBA ISIDA Palermo & Law degree, Palermo
•Background: Magneti Marelli, Cobra, Nokia, Tele Atlas, Philips
•Specialties: Telematics, automotive, mapping
Alex Willard, Director, Global Technology Practice
•BSc. Engineering & Naval Architecture and MSc. Systems
Monitoring & Diagnosis, Southampton City University
•Background: Lysanda, MSX International, Ford, Roush Tech.
•Specialties: Fleet telematics, car monitoring tools
Boston Eric Pite, Associate Partner
•M. Eng., Telecom ParisTech & MBA, London Business School
•Background: TomTom, Motorola, Sendo, Sagem
•Specialties: Consumer electronics, connected vehicle services
Thomas Hallauer, Research & Marketing Director
• BA, International Business, Southbank University London
•Background: Mobile Devices, FC Business Intelligence
•Specialties: UBI, location-based services
Maria Grazia Verardi, Senior Expert
•MSc. Physics, Bologna University
•Background: Cobra Automotive, Delta Electronics, Ylum
•Specialties: Telematics, automotive, R&D in ITS
Vienna Marijan Mumdziev, Senior Expert
•PhD Computing, Univ. Vienna & MBA Univ. Minneapolis
•Background: Deutsche Telekom, Nokia Siemens, Telekom Austria
•Specialties: Mobile telecoms, UBI
Paris
New York
15

16. PTOLEMUS in a nutshell
PTOLEMUS is the first strategy consulting firm focused on
telematics and geolocation
Strategy
definition
Vision creation,
strategic
positioning,
business plan
development,
board coaching &
support
Investment
assistance
Strategic due
diligence,
market
assessment,
feasibility study,
M&A, post-
acquisition plan
Innovation
management
Value proposition
definition, product
& services
development,
architecture
design, assistance
to launch
Business
development
Partnership
strategies,
detection of
opportunities,
ecosystem-
building, response
to tenders
Our consulting services
Procurement
strategy
Specification of
requirements &
tender documents,
launch of tenders,
supplier
negotiation &
selection
Implementation
Deployment
plans, complex /
high risk project &
program
management, risk
analysis &
mitigation strategy
Usage-based charging
PAYD / PHYD insurance, road charging / electronic tolling,
fleet leasing & rental, car sharing, Car As A Service, etc.
Telematics & Intelligent Transport Systems
ADAS, connected vehicle, crowd-sourcing, fleet
management, eCall, bCall, SVR, tracking, vehicle data
analytics (OBD / CAN-bus), VRM, V2X, xFCD
Positioning / Location enablement
M2M & connectivity
Our fields of expertise
Car infotainment & navigation
Connected services (Traffic information, fuel prices, speed
cameras, weather, parking, points of interest, social
networking), driver monitoring, maps, smartphone
integration, smartphone-, PND- or embedded navigation,
16

17. PTOLEMUS
PTOLEMUS in a nutshell
We help all players in the mobility ecosystem
ITS operators &
regulators
Fleets
Mobile device & positioning
suppliers
Telecom operators Automotive OEMs & suppliers
Financiers
2012 Directors’ report
(translation from the Italian origi
Content & application providers
OBD2 Bluetooth Dongle basic compatible car models
Telematics solution providers
Insurers, aggregators & assistance providers
17

18. PTOLEMUS
PTOLEMUS in a nutshell
Our clients come from around the globe
Source: PTOLEMUS 18

19. PTOLEMUS in a nutshell
We just published the Usage-Based Insurance Global Study, the
most comprehensive report written on the subject
• 800 pages of in-depth analysis on the
UBI market based on
- 200+ interviews in 25 countries
- 3 years of research performed by 6 consultants in
4 countries
- The learnings from 15+ consulting assignments
for insurers, OEMs, TSPs, investors, etc.
- Our experience & vision of the ecosystem incl.
OEMs and TSPs
- 350+ figures (charts, tables, etc.)
- 60 relevant patents listed
• Case studies & learnings from ALD
Automotive, Autoline, Allianz, Amaguiz, Carrot,
Coverbox, Discovery Insure, Generali, GM OnStar,
Hollard Insurance, Ingenie, Insurethebox, LeasePlan,
Liberty Mutual, MAIF-MACIF, Norwich Union,
Octo Telematics, Progressive, Solly Azar, Quindell,
State Farm, Unipol, Uniqa, UK aggregators and
Google, Young Marmalade, Zurich
• Detailed profiles of
- 20 insurance markets
- 20 leading UBI insurers
• A handbook of 45 suppliers' solutions
including our own evaluation & ranking
• 10-year market forecasts
- Country's readiness to telematics
- Forecasts for the Canadian, US, Latin American,
European, Russian, African, Indian, Chinese and
Japanese markets
- Personal line / commercial line
- Aftermarket / OEM
• Insurer's telematics market model
results in 5 markets
• A complete set of recommendations to
carriers, TSPs, OEMs, MNOs and
governments
• A strategic analysis of the value chain
evolution including
- The impacts of EOBR, eCall, CONTRAN 345,
ERA Glonass, the Monti law, the gender ruling,
etc.
- The impact of the smartphone
- Managing Big Data
The global reference report
on the subject, quoted by
The Economist, the
Financial Times and The
Wall Street Journal
Note: A free 100-page abstract can be downloaded from www.ptolemus.com/insurance 19

20. PTOLEMUS
A growing recognition
They mentioned PTOLEMUS
PTOLEMUS in a nutshell
20

21. Strategies for Mobile Companies
Brussels - Boston - Chicago - Hamburg
London - Milan - Paris - Vienna
contact@ptolemus.com
www.ptolemus.com
@PTOLEMUS
Matthieu Noël, Senior Consultant
mnoel@ptolemus.com
+33 6 13 34 70 56