2023 ICNZ Scholarship winner Toby Kelly is excited to be in insurance

It is a very interesting time to be in the insurance industry, according to Toby Kelly, winner of the 2023 Insurance Council of New Zealand (ICNZ) Scholarship.

“There’s so much going on that impacts general insurers: the climate crisis, the EV transition, new digital apps and the potential for disintermediation,” he says.

“The challenges and opportunities we face are industry wide, revolving around the role and impact of technology, claims inflation, and increasingly frequent weather events driven by climate change. Affordability is also emerging as a key issue for customers in the cost-of-living crisis.” 

Uncertain future

Kelly says businesses face a volatile, uncertain, complex and ambiguous external environment. In order to be successful in this environment, insurers worldwide will need to become more resilient, and reactive to change.

One area of very rapid change is Generative Artificial Intelligence (AI). ChatGPT-3 from OpenAI is the fastest growing consumer application in history, reaching 100 million active users two months after launching in January 2023.[1] Google released a similar tool just six weeks later. [2] Private investment in AI technology start-ups has increased exponentially.  

“Technologies typically get over-hyped initially,” Kelly says. "Most organisations, achieve less than one-third of the impact that they expect from digital transformation.[3]

The Gartner Hype Cycle identifies five key phases in the life cycle of technology: innovation trigger; peak of inflated expectations; trough of disillusionment; slope of enlightenment and plateau of productivity. Accordingly, Kelly predicts that “once the initial excitement about Gen-AI fades, there will be a period of rationalisation.”

Kelly was awarded the 2023 ICNZ Scholarship for his essay on the benefits and risks for insurers of using generative AI.

“Generative-AI is bringing a massive step change in modern technology as we know it. The predicted impact on business is huge. It will touch every industry and role,”[4] he says.

His work focuses on “how this technology will impact our industry, our business, the products we offer customers, and the future of work.”

Kelly argues that “the benefits of adopting generative AI across the value chain will outweigh the risks. The technology has the potential for wide-ranging applications that promise to increase productivity, decrease costs through automation and improve decision-making capability.”

Leveraging the right infrastructure

However, “the new technology is not a silver bullet for organisational success. It is a piece of the puzzle,” Kelly says.

The key message from his winning essay is that “any emerging technology, no matter how good, can only be leveraged by organisations that have the right technology infrastructure, human capital and culture of innovation.”

“With 44 per cent of customers having a preference for interacting with a human being once a policy is in place, empathy beyond the scope of current AI is critical. "Customer-centric cultures, with empowered and engaged staff, have been proven to succeed over the long term,” Kelly says

He argues that organisations embracing a culture of innovation and taking an experimental approach to implementing the technology will have the best chance of thriving and observes that the insurance industry “has been slow to adopt new technology.”

In part, this is due to the risks that Gen-AI poses, including cybercrime, false responses, bias, insufficient information about decision-making processes, lack of data-privacy and negative customer responses.

As such, Kelly's essay suggests that companies act with caution and patience; “experimenting with the technology in an organisational context, taking smaller risks to learn what works and what doesn’t, before scaling up and rolling out live solutions.”

Enjoying the process

Kelly enjoyed the process of writing the essay on Gen-AI and was “very thrilled” to win the ICNZ 2023 scholarship. He will use the prize money to attend the Insurtech Insights conference in New York in June, 2024.

The conference will bring together leading insurers, insurtechs and investors. “It’s a great opportunity to learn more about the innovative customer propositions that global markets are working on, and help influence my work back in New Zealand,” Kelly says.

“I am grateful for the opportunity. It’s exciting to get the support of ANZIIF and ICNZ to attend an Insurtech conference which will greatly benefit me in my role and my personal development,” he adds.

His current role, as Product Proposition Manager at AA Insurance involves helping to develop new products and propositions to deliver great customer experiences and leverage new technology platforms.

“Part of my role looks at our external operating environment and how our product roadmap aligns to customer, competitor and market trends,” he says.

The industry-wide opportunities and challenges “flow through” to Kelly’s role in terms of understanding what customers desire from new products and propositions, what is feasible to deliver from a resource and technology perspective, and whether those options are commercially viable.

As a business, there are many opportunities for us to support our customers with more of their insurance needs and build more compelling ecosystems around them, he says.

Kelly completed his schooling in his birth city, Wellington, New Zealand, before moving to Dunedin to study at the University of Otago. He began his career in investment businesses, then moved to venture capital, joining Youtility, a fintech start-up in London primarily designed to help banks offer retail customers more holistic money management services.

Eventually, that led to working for Lloyds Banking Group, contributing to the development of new products, often in conjunction with fintech start-ups.

This included working with Lloyds general and life insurance businesses. Kelly returned to New Zealand last year, and was excited to join AA Insurance in his current role. He would like to continue to grow his career at the intersection of customers, products and technology, developing as a leader and contributing to resilient change in the complex and volatile economic market.

He feels very fortunate to have learnt from great leaders at firms like Balderton Capital, Snowball Effect and Milford Asset Management. “Brian Gaynor stood out as someone who led from the front, treated everyone with respect, wasn't afraid to show emotion, and held strong principles that were reflected in the company culture and strategy. My parents have also played a huge role in giving me plenty of support and inspiration,” he says.

Kelly encourages people to enter the 2024 ICNZ Scholarship. To those who might be daunted by writing the essay, he advises, “When you start, long form writing can often feel overwhelming. My tip is to always get your thoughts down and keep refining as you go. It doesn’t even need to make much sense — just get the structure of your ideas down and the refinement will come later.