Insurance application programming interfaces (APIs) allow companies to connect different platforms and services to one another, extending the functionality of offerings.
In this article, we’ll cover the fundamentals of APIs in the insurance industry, the relationship between APIs and microservices, and how insurance APIs impact your insurance company.
Application programming interfaces (APIs) are short scripts that help two different applications ‘speak’ to one another. APIs connect different platforms and services to each other, extending functionality and the offerings a company provides.
Insurance APIs do this for the insurance industry, letting insurers incorporate data from multiple sources to create new tools and offerings that help customers gather information and make decisions.
How an API works
What happens if your applications are not connected?
Because of the way that applications are built using different languages, configurations, and structures, it can be difficult to get two different applications to work together. And if applications do not work together, one of two things can happen.
Data may remain siloed, preventing organizations from using information fully and gaining valuable insights from data analytics
Data is transferred between programs, usually by using manual, repetitive, resource-intensive, error-prone data entry processes
APIs work like translators, allowing applications to speak to one another, and work together. An insurance API can connect a discrete application (like a rating application) to a different internal application (like document generation) or a third-party vendor (like DocuSign.)
The opportunity presented by insurance APIs for the industry means many companies are launching digital transformations, shifting away from legacy technology architecture to a more dynamic, API-centric model by leveraging microservices.
Insurance APIs give you more access and control of your data. By connecting your systems and platforms, you can better assess risk, personalize customer experiences, and offer new insurance products.
Collect IoT Data
Insurance APIs let you collect data from IoT devices and integrate with your insurance platform.
Integrate Chatbots
Answer customer questions about insurance policies, coverage, and claim in real-time.
Unify Internal Systems
Connect your platforms, systems, and applications for improved interoperability.
Enhance Tools&Offerings
Build a rating calculator or offer pay-as-you-drive using insurance APIs.
USE CASE
Insurance APIs for IoT
How to use insurance APIs with IoT data
Imagine a P&C insurer wants to incorporate data from IoT devices into rating calculations. For example, the insurer wants to access device data that measures driver safety. ]
This data could be used to calculate the cost of fleet insurance for a company.
An API would allow the IoT device to send data directly into the insurance platform, where it can be run through the required algorithms to generate an updated cost of insurance.
What are the benefits of insurance APIs?
Discover how you can use insurance APIs to diversify your offerings and support enhanced customer experiences.
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Enable remote access
Customers and employees need access to information no matter where they are. But legacy systems are often limited to local access, on a desktop computer. APIs help connect the data contained in a limited application to remote devices so that both customers and employees can access the information they require, reducing service gaps and improving the customer journey.
Improve the customer journey
APIs reduce the administrative burden on employees, so they can focus on customer service. Eliminating data silos and gathering more information to analyze also helps insurance companies gain valuable insights, which can be used to improve the customer experience. Insurance APIs improve access to real-time data, so your CRM has accurate, updated information. This helps increase customer loyalty and retention.
Streamline workflows
Without APIs, processes become disjointed and hard to manage. However, when applications can communicate and work together, processes can be automated and workflows streamlined, further improving productivity and efficiency.
Access new revenue streams with insurance APIs
APIs help insurance companies innovate in new ways, offering new services and products. This extends your reach into new revenue streams.
Improve P&C commercial lines of business by applying insurance APIs to key categories in your organization.
Customer Billing
Document Management
Risk Management
Rating Systems
Payment Processing
Geolocation
Claims Processing
Insurance API Security
Are insurance APIs secure?
The data transferred by APIs is valuable, which means risk management is critical for insurers using APIs.
At the same time, APIs can improve data security since they use encrypted channels and reduce reliance on legacy technology – which is also a critical target for bad actors.
By compiling an inventory of your APIs and remediating vulnerabilities, you can enhance your overall security posture.
Why are APIs critical for insurance?
Digital transformation remains a challenge for the insurance industry. This is in part due to widespread reliance on outdated, legacy systems. In many cases, legacy applications are so integral to daily processes that modernization would be too disruptive – and expensive – to be practical.
APIs can help insurers add features and functionality without requiring a completely new system, evolving to a more digitized, modernized, customer-centric business model.
