For a few years, drivers in some Canadian provinces have been able to earn discounts on their auto insurance premiums by driving safely — or not driving much — thanks to apps or telematics devices that track their behaviour behind the wheel.
But recent rules changes mean that in a growing number of jurisdictions drivers could also see their premium increase if the tracking in so-called pay-as-you-drive programs reveals risky behaviour like speeding, abrupt braking or accelerating, or texting and handheld calls while the vehicle is in motion. Similarly, with pay-per-kilometre insurance, drivers could see surcharges for exceeding a certain number of kilometres driven in a certain period of time.
In November, Ontario’s insurance regulator announced insurers would be allowed to charge more for risky driving and high kilometres revealed by apps and telematics devices. In Quebec, where private insurance covers property damage caused or incurred by drivers, insurers are also allowed to adjust premiums.
Alberta approved the ability to increase premiums for insurance programs that rely on tracking in December as part of a broad auto insurance reform, with the new rules expected to come into effect in early 2022.
And some form of telematics insurance are also available in New Brunswick, Nova Scotia and Prince Edward Island.
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By Joyce M. Rosenberg
THE ASSOCIATED PRESS
NEW YORK _ Many business owners are changing the way they make money as they attempt to recoup revenue lost to the coronavirus outbreak.
The changes can look subtle; for example, when owners of clothing stores decide to beef up their internet business. But often such adjustments involve an entire rethinking of the business model the blueprint that encompasses the key aspects of running a company with significant changes to staffing, technology and inventory.
For many companies, it’s a matter of survival, but for others, the changes have been a silver lining amidst the crisis.
When Big Bottom Market, a cafe and food shop in Guerneville, California, closed in mid-March, “I had to take stock of what we had and think about how we could evolve the business,” says co-owner Michael Volpatt.
Volpatt started a daily cooking show on Facebook in hopes of drawing customers to Big Bottom’s page on the online marketplace Etsy. He succeeded: Daily visits jumped 66% and customers stocked up on merchandise including biscuit mixes, coffee, preserves and T-shirts. That revenue from Etsy covered Big Bottom’s monthly rent, utilities and insurance.
The cafe, which gets business from visitors to California’s Sonoma wine region, reopened with social distancing steps May 8, selling meals and merchandise at the door. Business is down 80% from its usual pace the cafe can normally seat 40. During the week, the cafe’s business is mostly from people who live locally, but the weekends bring people from all over the Bay Area.
Volpatt doesn’t know when he’ll fully reopen the cafe but going forward he expects to get substantial business from the internet. He’s even hiring a staffer to help build Etsy sales.
Four months after launching the Velvet Window clothing store in Dallas, Amy Witt was forced to close its doors. She soon realized she’d need to adjust her approach to ensure customers came back when the store reopened.
“The forced closure gave me the opportunity to say, `what’s wrong with my business how do I fix it?”’ Witt says.
Before the outbreak, 85% of Witt’s business came from shoppers coming into the store. With the shutdown, she realized she needed to be more aggressive with social media to draw shoppers to her website; she needed revenue and to engage with her customers. She taught herself and her staff how to make Velvet Window more visible in internet searches. She picked up new customers, including some outside the Dallas area.
As she prepared to reopen May 1, Witt concluded she had to offer more services and accommodations in a retail environment reshaped by the outbreak. So she set up private shopping hours for some customers _ for example, those most at risk for complications if they contract the virus. She’s using video or messaging apps to show her fashions to others anxious about coming to the store. Curbside pickup or deliveries can also be part of the deal.
She sees all these steps as elements in a new business strategy: “It’s something we will continue to offer” even after the current crisis ends, Witt says.
Overhauling or refining a business model should be an ongoing part of running a company; even successful owners often think about making adjustments. But any crisis forces owners to reassess their business. After companies were forced to lay off staffers during the Great Recession, many turned to freelancers when they began hiring again. That saved money on salaries and benefits and gave owners more flexibility.
Business models are likely to undergo significant changes in the coming months given the damage to the economy from the outbreak. A lot of uncertainty remains about how much consumers will be willing to spend, travel, dine out and go to sports and entertainment events _ and when social distancing measures that limit business will be lifted.
Before the outbreak, D’Artagnan sold most of its high-end meats to restaurants where customers might pay $50 for filet mignon or dine on exotic varieties such as squab or quail. But with restaurants closed, half the company’s business is now from people buying meat to cook in their own kitchens or on the backyard barbecue. That means the Union, New Jersey-based company ships smaller cuts and packages of beef and chicken to consumers rather than the larger cuts and whole animals it delivers to restaurants.
“It’s a very different demand in the kind of animals people buy to cook at home instead of ordering in a restaurant,” owner Ariane Daguin says. The changes mean different procedures for butchering and packaging the company’s products.
D’Artagnan’s e-commerce business, which accounted for 10% of revenue before the outbreak, is up five-fold, says company president Andy Wertheim. The company won’t know until restaurants are operating again what their demand will be, or whether people will continue to do their cooking at home. But, Wertheim says, D’Artagnan is prepared to have a different business model going forward and increase its staff to get the work done.
The changes at some companies have come from serendipity rather than crisis. At law firms, shelter-in-place rules have forced attorneys to meet with clients over video rather than in a traditional office visit.
Attorney Katherine Miller’s work includes mediation in divorce and family law cases. She says the virus outbreak has chipped away at clients’ reluctance to hold meetings online. She plans to use that change in attitude to expand her practice.
With the use of video meetings, it will be easier to co-ordinate schedules when all the parties don’t have to travel to her office, and Miller will have less travel time when she attends meetings. And she won’t be limited to her current practice area, New York City and its northern suburbs.
“I used to think, this is going to be an uphill battle to convince people that it’s a good idea. But now because of the coronavirus, I don’t have to do that anymore,” she says.
BY REGINA BOYLE WHEELER
For the foreseeable future, the COVID-19 pandemic is drastically changing the way we live. Public health officials continue their urgent calls for social distancing as this physical separation between you and other people is currently one of the most effective ways to slow the spread of the virus and ease the mounting burden on the health care system. So, in these uncertain times, just when we need each other the most, we’re urged to keep our distance.
Even as schools, businesses, churches, and seemingly everything shuts down, staying connected is vital—even while we hunker down at home.
Make virtual connections
Thanks to 21st-century technology, connecting to others from a distance is easier than ever.
- Use Skype, Zoom or other video conferencing platforms to have coffee or happy hour “with” friends or “lunch” with co-workers who are working from home. Host a virtual book club or card game.
- Start a family group text and share jokes, news or videos of your silly dog.
- Use FaceTime or similar video chat apps on your smartphone to virtually visit family or friends who live just around the corner, or on the other side of the world.
- If you have a Chrome browser on a desktop or laptop computer, use Netflix Party to watch movies and shows with your friends simultaneously. Use the group chat function so you can talk about what you’re seeing as if you were in the same room.
- Since most gyms are closed, many are offering free resources for people who want to continue their workouts virtually. Fitness chain Planet Fitness is live streaming free 20-minute “work ins” via Facebook at 7 p.m. ET daily.
- Your religious life can be an even greater source of support now. Many religious institutions are offering either live-streamed services or taped versions. Check your organization’s website or Facebook page.
Take advantage of social media
In times like these, social media platforms can not only help you help others but also help you feel connected to the world around you.
- Set up a neighbourhood Facebook or Nextdoor group so neighbors can post notices, share resources or alert others to someone who’s in need. Nextdoor has launched Help Map so neighbors can locate those who need food or supplies and people who are willing to pitch in.
- Storytime is online too. Check out the Storyline Online YouTube channel. It features a variety of celebrities reading kids’ books.
- Join Pinterest to find new recipes to make for your family or search for DIY projects to improve your home.
- Check out #quarantinelife or #socialdistancing on Twitter to see how other people around the world are spending their time and connecting. Search for other hashtags that interest you.
There are also low-tech ways that can help. Write letters, send care packages, pictures and the like, suggests Kozlov. “Not everyone has access to technology, so make sure you’re finding ways to send ‘mood boosts’ to those who don’t have access,” she says.
Older people, especially those with underlying health conditions, are at higher risk of complications if they get COVID-19. For their safety, nursing homes and long-term care facilities are tightly restricting or banning visitation. This is the same population that might not have access to technology and are at risk of social isolation, Kozlov says. So “old school” solutions like sending a card or making a phone call can really brighten their day.
Wondering if you could be exposed to COVID-19 through contaminated mail or packages? It’s very unlikely.
The chances of being infected by letters or boxes that have been “moved, travelled, and exposed to different conditions and temperature” is low, according to the World Health Organization (WHO). The Centers for Disease Control and Prevention (CDC) adds that “In general, because of poor survivability of these coronaviruses on surfaces, there is likely very low risk of spread from products or packaging that are shipped over a period of days or weeks at ambient temperatures.”
That said, frequent handwashing, including after receiving and opening mail, is one of the best ways to reduce your risk for infection.
Bond with your pet
Your pet is an important social connection and can be a stress reliever, too. A 2019 study published in AERA Open found that even a brief time interacting with pets can help lower stress. Researchers divided about 250 college students into four groups: one petted cats and dogs for 10 minutes; one watched the activity; a third simply viewed a slideshow of the animals; and the fourth didn’t touch or view the animals at all. They found that the hands-on petters had lower levels of the stress hormone cortisol in their saliva than the other three groups.
Important to note: The CDC recommends restricting contact with pets if you get COVID-19 because the risk of transmission between humans and animals is not yet well understood.
Take a breather
Go outside for walks, exercise, fresh air and sunshine, if allowed in your community. You can pass people on the street (maintaining the safe six-foot distance) and wave hello and exchange a smile or a few pleasantries.
“The videos of people in Italy singing out their windows is so moving, and people in my neighborhood have taken to standing on their front steps at 5 pm and singing ‘We Are the Champions’ together,” Kozlov says. “This is a great way to feel like you are part of something bigger.”
That underscores the idea that social distancing can be reframed as an act of social cohesiveness. If we all do this, we’re protecting ourselves and others as well, Kozlov says.
She encourages people to adjust their thinking about this trying time in another way, too.
“Take this time and try to think of it as something other than ‘the time the country shut down.’ Maybe it can also be ‘the time I learned a new skill, the time I read all the books I’ve been meaning to read, the time I watched all the classic movies, the time I reached out to old friends and cultivated our relationships,’ etc. We are all very much in this together, so find your community (from a distance) and try to support one another.”
Edited for ILSTV
Emerging technologies and intensifying competition provide occasions for reinvention
- Consumer trust, legacy technology and talent challenges create more urgency for change
- Defining a clear vision of the future crucial to long-term value creation
- An aspirational purpose, new offerings or traditional business models no longer enough
TORONTO, Feb. 26, 2020 – Canadian insurers must rethink existing business models to overcome the complex challenges brought on by new emerging technologies and intensifying competition.
“Canadian insurance providers are vulnerable to shifting trends within their own industry,” says Neil Pengelly, EY Canada Insurance Technology Leader. “Declining levels of consumer trust, along with legacy technology systems and a growing skills gap are creating more urgency for change. Those with a clear vision of the future and the courage to invest in thoughtful, customer-focused business models will emerge as leaders in the new economy.”
EY’s NextWave Insurance: personal and small commercial 2020 report outlines how providers can’t afford to be all things to all customers. They’ll have to focus and prioritize as they redesign their business models. Canadian insurers can embark on the right path forward by considering how to:
- Create seamless digital experiences: The most effective insurers will drive growth and capture customer loyalty and market share by anticipating consumer needs, targeting and cross-selling more effectively, building out robust self-service capabilities and focusing on data-driven customer relationships.
- Leverage relationships to enhance business processes and customer experiences: Insurance providers can expand the value of their offerings and rapidly move to cloud-based platforms by partnering with ecosystem relationships (e.g. sharing platforms, social media, InsurTechs and data providers) to offer specialized, but complementary services in mutually beneficial ways.
- Take a proactive approach to personal and commercial cyber risk protection: Insurance providers can build trust and confidence with consumers by developing effective techniques — from proactive monitoring to incident response — to fight cyber threats, adopting the strongest possible defences to protect their customers from identity theft and data breaches.
“While tomorrow’s leading insurance businesses will be purpose-led in their strategies — including more agile with their resources and dramatically more customer-centric — the most important capability will be their ability to drive organizational change,” says Pengelly. “Creating an aspirational purpose, new offerings or traditional business models isn’t enough. Insurers must also get better at execution.”
Read the full EY NextWave Insurance: personal and small commercial 2020 report.
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
For more information, please visit ey.com/ca. Follow us on Twitter @EYCanada.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organization, please visit ey.com.
SOURCE EY (Ernst & Young)
By Jordan Press
THE CANADIAN PRESS
OTTAWA _ Newly released briefing notes for Prime Minister Justin Trudeau describe the dire state of federal computer systems, which deliver billions in benefits and are on the precipice of collapse.
Officials briefing Trudeau after his party’s re-election noted “mission-critical” systems and applications are “rusting out and at risk of failure,” requiring immediate attention from his government.
Some systems are pushing 60 years old and built on “outdated technology” that can no longer be maintained.
The Canadian Press obtained the documents through the Access to Information Act, and much of the text has been blacked out because it is considered sensitive advice to government.
One of the few visible lines says the public service will be working on projects “to stabilize mission-critical systems.”
The Liberals promised in the fall campaign to improve services for Canadians.
These back-office problems often require long-term spending commitments and improvements that aren’t easily seen by voters, which means they aren’t usually top-of-mind issues for politicians. But there has been a growing belief inside the government that how satisfied citizens are with digital services is linked to how much trust they place in their government.
Nowhere is the issue of antiquated systems more pronounced than Employment and Social Development Canada, which oversees child, parental, senior and employment insurance benefits.
The Liberals have already made multiple changes to the federal social safety net that required programming changes to old systems. The documents to Trudeau suggest the aged systems pose a problem for more changes the Liberals have promised.
“The complex array of existing programs and services means that future program changes, to continue providing Canadians with the programs and services they expect when interacting with their government, will need to account for pressures on legacy IT systems, which are facing rust-out and critical failure,” part of the briefing binder says.
“These aging platforms neither meet the desired digital interaction nor are capable of full automation, and thus are unable to deliver cost-savings through back-office functions.”
For example, the system that runs old age security is almost as old as those now reaching the age to benefit from it.
A separate document says upgrades are taking longer than planned because of procurement delays and the complexity of projects.
Funding pressures are coming in part from the requirement to maintain existing technologies longer than originally anticipated, the document says.
Often, officials didn’t look to upgrade these old systems so long as they continued to work, said Andre Leduc, vice-president of government relations and policy with the Information Technology Association of Canada. He said the majority of departmental IT budgets are used to keep old systems running, leaving little spending room to deploy new technology like cloud computing.
“It’s not that they’re hitting the panic button. There is no panic yet,” Leduc said.
“There is a lot of concern, both within the bureaucracy, within the political layer, and within industry about we need to get this ball rolling. We need to help government digitally transform.”
Leduc said it won’t be an easy fix because of the money required, and getting the government to move ahead with major IT work after getting burned on high-profile projects. The most glaring example is the Phoenix pay system that has left public servants overpaid, underpaid or not paid at all.
Just months after the first iPhone was released in 2007, Nir Eyal and some of his Stanford classmates were part of a project creating apps that would be advertised and sold via Facebook.
This was before the app store existed and at a time when Facebook was open to third-party app developers.
The goal of the project was to learn about the psychology of Facebook and what drew people to it — or away from it.
Eyal served as the CEO of the business and within months the apps created by the class had 16 million users and they’d generated more than $1 million US in ad revenue. They understood how to design to create dependence.
While people may talk about being addicted to their phones or to social media, the reality is that they are dependent on those products because they’re designed that way.
Those products are designed to get you hooked.
Creating the habit
The group at Stanford, informally known as “The Facebook Class,” went on to work at Silicon Valley giants like Facebook and Google.
Eyal teaches, consults and writes about the intersection of psychology, business and technology. He’s the author of Hooked: How to Build Habit-Forming Products.
“Of course these devices and apps are hacking our attention. That’s what they’re designed to do,” Eyal told Day 6 host Brent Bambury.
He says that five years ago, even he was hooked.
“I would check my phone when I meant to be with my daughter. I would check my phone when I meant to do a project at work. I would check my phone just for any old reason,” said Eyal. “And that actually caused me to reconsider my relationship with distraction.”
Eyal uses an example from the behavioural work of psychologist B. F. Skinner to explain how devices and apps are designed to become habit-forming.
Skinner taught pigeons to tap a disc in order to get a pellet of food. The food was their reward.
Eventually, Skinner changed the pattern so that the pigeons would get their rewards inconsistently. The birds might tap the disc but would not always get a food pellet.
“What Skinner observed was that the rate of response the number of times the pigeons pecked at the disc increased when the reward was given on a variable schedule of reinforcement,” explained Eyal.
“We see the same, what we call intermittent rewards, in all sorts of things. It’s what makes gambling so engaging. It’s what makes the news interesting,” he said. “It’s what you don’t already know.”
The same desire for intermittent reward apply to books, movies and sports – the outcome is unpredictable.
“And of course, it’s at the core of many habit forming products online like social media, email, Google searches. All of these things utilize an intermittent reinforcement.”
That unpredictability is why users keep checking Facebook and Twitter and Instagram – will there be any likes? Will there be any retweets? What’s trending?
Sounding the alarm
Chamath Palihapitiya was a Facebook executive in the company’s earlier years. Today he’s a venture capitalist and a critic of social media.
In a talk at Stanford University in late 2017, Palihapitiya acknowledged that while it wasn’t intentional by Facebook executives, “I think in the back of the deep, deep recesses of our minds we kind of knew that something bad could happen.”
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