insurance apis
October 16, 2020

API Use Cases For Insurance

API management

Following on the trails of how the banking industry has transformed over recent years, the insurance sector is similarly undergoing a rush to digital transformation. Today’s landscape demands that insurance carriers are more agile and provide a seamless omnichannel experience, with APIs being the key driver in unlocking these capabilities.

Related: What Are APIs?

IT infrastructure in insurance has traditionally relied on core systems of monolithic databases for all of the back-end information such as accounts, policies, and claims. While these systems were sufficient in the past, they are preventing growth opportunities for insurance companies by their inability to communicate with other systems, partners, and end users.

Enter APIs, which by definition connect disparate technologies, to:

  • Increase insurers’ efficiency
  • Increase revenue
  • Provide a better customer experience
  • Grow partner channels

API Use Cases in Insurance

At Akana, we are proud to be trusted by some of the world’s largest insurance carriers with our API management platform to create, secure, and manage their APIs. In recent roundtable discussions with these customers, we saw many common APIs for insurance use.

More importantly, we enjoyed hearing that an API-first strategy has been widely adopted, with executives pushing the use of APIs to make the overall customer experience better and drive new business.

Below are a few common themes on use cases for APIs in insurance.

Digitization of Operations

One of the things we kept hearing the most was how the use of APIs enabled the digitization of many insurance services. Enabling interaction via digital channels streamlines the partner and end customer interaction with the insurers and creates a unified experience. Insurers often sell many different types of insurance policies (for example, dental insurance in an employer-sponsored plan), and often work with brokers rather than employers for group policies.

One of the insurers said that if the insurance brokers who distribute the policies can process digitally, enabling transactions and reducing time, the interactions become much smoother and builds a tighter relationship. In fact, many dealers are awarding them more business because they are finding them better to do business with; though they might be more expensive in some cases, ease of engagement increases the value.

Increased Efficiency in Claims Management

One insurer we spoke with stated that an efficient claims management process is the most important service that they provide, and providing a “best in class” experience is the goal. To that end, they strive to pay out insurance claims within one of the shortest durations in the industry, a promise that they have followed through on.

With APIs, insurance companies are benefiting from better internal systems integration and other external parties to streamline the claims management process, speeding up the resolution of claims.

Growing a Partner Ecosystem

APIs make it easier for current, and potential, partners to do business with you. By providing APIs for public consumption and integration, new partners (brokers, agents) are able to offer your insurance options to their customer base.

On top of that, APIs are the connectors through which aggregators (insurance shopping comparison sites – like what is for travel bookings) compile and present their data. Without APIs as part of your strategy, your company won’t even be considered by a customer who uses such sites to gather quotes from a number of potential carriers.

Insurance carriers can also create relationships with other industries that can potentially create business value. For instance, partnering with a real estate agency to generate leads for homeowners’ insurance buyers, or with an auto dealership for auto insurance leads.

By identifying the needs of the partners, the types of transactions and interactions that are required, and supplying self-service APIs to meet those needs, your partner ecosystem can quickly scale.

For more on the role of APIs in building partner ecosystems, read our eBook

Foundations For a Digital Ecosystem: Inspiration From Open Banking APIs

Delivering New Services

The world is advancing technologically at an incredible speed, with IoT taking over everything we touch and experience.

Many modern vehicles are now equipped with tools to call for help in the event of accident. We can pull up our insurance provider’s app and instantly upload photos of an incident for quicker claims resolution. Some auto insurance providers have devices that plug into a vehicle’s console that monitors driving behavior and adjusts policy premiums accordingly.

The key driver for all the interconnectedness between these devices and the insurance carrier are APIs.

More About APIs For Insurance

For more insight into how APIs provide strategic advantages in the insurance industry, download the Gartner report “5 Best Practices Insurance CIOs Can Adopt From Open Banking Initiatives to Shape Their API Strategy.”

Download Report