PTOLEMUS Consulting Group Insurance: the most profitable connected car service ConnecteDriver, Brussels, January 2014 - PTOLEMUS - All rights reserved

Usage based insurance/ quick definition What is insurance telematics? Its basic principles The driving risk star Most current insurance policies use static / statistical criteria to evaluate drivers' risks - Age, gender, vehicle make & age, place of residence, occupation, etc Insurance telematics is a policy based on these criteria and 4 new dynamic parameters Distance Static criteria (statistical) Driving behaviour Source: PTOLEMUS Time Place

Usage based insurance business case: claims Insure the box demonstrate the business case for UBI as a connected service Since 2010, insure the box provides PHYD insurance to young drivers. Average premium 1600/y It has sold around 125,000 policies, entirely online It indicates that 95% of its customers get reductions on renewal averaging 34% based on their driving experience Its incentives for safe driving have reduced accidents among 17- 21 year olds by 35-40% PTOLEMUS 3

Usage based insurance business case: relationship Ingenie has created a strong relationship with its customer base Twitter campaigns reach of 2 to 3 million Campaigns drive web traffic Smartphone application feedback every 10 days, after 40 miles driven Black messages sent on the same day 89% checked their message in the last 14 days Average interactions: 6/months PTOLEMUS 4

Usage based insurance business case: VAS Sparkassen (S-Direkt) designed its model around Value Added Services S-Direkt partnered with local operator Telefonica to provide a service-based offer Deutsche Assistance (eCall, bCall) Masternaut (theft tracking) Smartphone-based driver feedback is handled by Telefonica. - Where is my car service - Reduced social interactivity - Best driver contest Limited discount to 5% 2 Channels: aggregator and direct The German market is sensitive to privacy, safety and vehicle theft. Telefonica adapted the architecture to separate the driver data and the insurance rating and rescue services. PTOLEMUS Source: Unipol, PTOLEMUS 5

The UBI market today The market for telematics insurance is now global Canada Europe - Desjardins - Admiral - Ingenie - Allianz - Insure the box - Amaline - Linear - Aurora - Mapfre - Axa - SparKasse - Aviva - Industrial Alliance - Reale - Co-operative - Sara US - Coverbox - Am Fam - Unipol - Generali - Allstate - The AA - Direct Line - AAA - Zurich Japon - AIOI - Farmers - Sompo - GMAC - Liberty Mutual - Mapfre Australie - Progressive - AI Insurance - Safeco - StateFarm - The Hartford - Travelers - USAA Afrique du sud Mexico - Discovery 0 PTOLEMUS Source: PTOLEMUS 1 2 5 10 20 - MiWay - Hollard - GNP - OutSurance 40 6

Insurance telematics market drivers - Technology Insurance interaction with the driver can take many shapes Possible technologies for vehicle connected services Black box Digital tachograph Aftermarket FMS box OBD device Self-energised connected modules Cigarette-lighter device Drive Cam PND Speed camera locator Smartphone Smartwatch OEM system Supplier system Semi-embedded system Vehicle keys OEM Smartwatch Line-fitted Fixed PTOLEMUS Source: PTOLEMUS Removable Portable 7

Insurance telematics market drivers - Technology Fraud can take many shapes UBI technology does not solve everything PTOLEMUS The video can be seen here: http://youtu.be/YlTFlxI1RuE 8

Insurance telematics market drivers - Technology ...Yet very very few are used today Possible technologies for vehicle connected services Black box Digital tachograph Aftermarket FMS box OBD device Self-energised connected modules Cigarette-lighter device Drive Cam PND Speed camera locator Smartphone Smartwatch OEM system Supplier system Semi-embedded system Vehicle keys OEM Smartwatch Line-fitted Fixed PTOLEMUS Source: PTOLEMUS Removable Portable 9

Usage Based Insurances use of car data More service providers are harnessing car data Increasing range of services offered CAN data accessed by the device PTOLEMUS Source: PTOLEMUS, Progressive, Allianz, Audiovox, Mobile Devices 10

Usage Based Insurances use of car data New services are now offered around the OBD dongle Data include: Services include: - Mileage - Airbag - eCall - Mileage (leasing) - Fuel level - Body controller - bCall - Fuel level - Powertrain - Fuels saving - Diagnostic - Door control - Driver scoring and - Crash detection rewards - Fleet tracking - Smartphone use restriction - RPM - Crash detection - Alignment - GPS data - Driving events - VIN - Driver log Increasing range of services offered - Geofence... CAN data accessed by the device PTOLEMUS Source: PTOLEMUS, Allianz, Audiovox, Mobile Devices 11

UBI potential for third parties The car makers can harness UBI to provide added value OEMs can become Car Service Providers - Use eCall as a plateform - Recurring relationship with customers, meaning increased trust - Numerous new revenue opportunities Insurance can become the number 1 source of connected revenues - Most of them already sell financing to their customers. Insurance is the next step - Multiple services can be sold together with UBI, notably bCall, SVR, roadside assistance, etc. Source: PTOLEMUS 7

UBI potential for third parties Creating a service in partnership with an insurance Define the roles and branding: - who is the customer-facing insurance provider - Can multiple insurers offer insurance for a given vehicle Define the model or models: - What type of data will be shared? Raw, filtered, score... - How will driver and vehicle data be delivered Define the device and technology - Embedded, customer owned or smartphone? - What sensors can be used accelerometers - Cost and maturity 9

Conclusion Insurance has the potential to connect most vehicles Telematics is not compulsory, Insurance is OBD devices are becoming car data centric service platforms Insurers will continue to push for more reliable and efficient accident detection and analysis technologies A model of data exchange between various stakeholders will facilitate the take-off of the embedded UBI industry UBI will accelerate synergies between connected services and improve usage rate 23

Introduction to the 2013 study The UBI Global Study paints a truly comprehensive picture of the UBI market 800 pages of rigorous analyses of the PAYD / PHYD market based on: - 201 interviews in 18 countries 330 figures and charts 3 years of hands-on experience Our knowledge of the ecosystem incl. OEMs and TSPs 38 case studies including Allianz, Amaguiz, Cobra, Coverbox, Insurethebox, Ingenie, OnStar, Hollard Insurance, Insurethebox, Liberty Mutual, MAIF-MACIF, Norwich Union, Octo Telematics, Progressive, Quindell, State Farm, Unipol, Uniqa, Zurich A strategic analysis of the value More than a research report; a real strategic market analysis PTOLEMUS chain evolution including - The impact of eCall - The role of the smartphone - The new patents and partnerships * Italy, the UK, France, Germany, Russia and the US A handbook of 44 suppliers' solutions including our own evaluation and ranking 10-year market forecasts - Country forecasts for Canada, China, France, Germany, India, Italy, Japan, Russia, South Africa, the UK and the US - Bottom-up estimates of the number of policies for each insurer in the US, the EU and in South Africa Telematics insurer market models - Markets readiness to UBI for 20 countries - Analyses* of the insurer's business models in 6 countries A complete set of recommendations for insurers, regulators, TSP, OEMs and operators 3

PTOLEMUS in a nutshell PTOLEMUS is the first strategy consulting firm focused on telematics and geolocation Our consulting services Our fields of expertise Investment Evaluation Procurement strategy New market entry Business plan development, Board coaching and support Due diligence, Market assessment, Feasibility studies Specification requirements, Tenders publications, Supplier negotiation & selection Innovation management Business development Product & services development, Roadmap and launch management, Patent strategy Partnership strategies, Response to RFPs, RFQs, Lobbying Strategy definition PTOLEMUS Implementation Project & programme management, Risk analysis & mitigation strategy Mobile content and social networking Application stores, crowd-sourcing, etc. Navigation & location-based services Maps, traffic, fuel prices, speed cameras, parking, etc. Usage-based charging PAYD / PHYD insurance, Road User Charging, PAYD car leasing & rental Telematics & Intelligent Transport Systems Connected car, tracking, fleet management, eCall, bCall, Stolen Vehicle Recovery, Car As A Service, connected train, etc. Positioning / Location enablement M2M & connectivity 16

PTOLEMUS in a nutshell Who we have helped Telecom operators Telecom infrastructure suppliers OEMs & telematic vendors Content & application providers OBD2 Bluetooth Dongle basic compatible car models ITS operators & regulators Consumer electronics makers Positioning solution providers Fleets Fleets Insurers & assistance providers Financiers Montezemolo & Partners PTOLEMUS 17 2012 Directors report (translation from the Italian original which remains the definitive version)

PTOLEMUS Consulting Group Strategies for Mobile Companies Brussels - Paris - London - Milan - Munich - Chicago thomas@ptolemus.com www.ptolemus.com