Maximizing the Value of Your Investment in APIs
While the insurance industry is not subject to regulations driving the use of APIs, there are still many advantages that the use of APIs can offer – reaching a broader audience, unlocking new business capabilities, and creating a seamless customer experience across all channels.
Getting started won’t be easy. There are no API standards in insurance like Open Banking, and development will require a significant budget and resources. To ease the implementation of an API strategy into their organization’s infrastructure, insurers can look to their peers in other financial services verticals for a framework on how to get the most value out of their investment in APIs.
These best practices are detailed in a new report from Gartner titled “5 Best Practices Insurance CIOs Can Adopt From Open Banking Initiatives to Shape Their API Strategy.”Get Report
These best practices are detailed in a new report from Gartner titled “5 Best Practices Insurance CIOs Can Adopt From Open Banking Initiatives to Shape Their API Strategy.”
Gartner writes, “open APIs represent a long-term strategic enabler for an insurer’s digital business technology platform vision that will underpin the development of new business models, products and services. Insurance CIOs who plan to invest in open APIs should learn from their banking peers’ experiences with open banking APIs.”*
The figure above summarizes the five best practices and recommendations detailed in the report, each of which we will provide an overview of below. For the complete scope of these recommendations, we encourage you to read the report in full.
Gartner writes, “In the right context, however, both the publication of their own open APIs and leveraging of partner open APIs can be powerful allies for digital transformation and optimization in insurance. As well as developing open APIs, insurance CIOs should be actively investigating how they could leverage partner and third-party open APIs to accelerate their digital platforms and deliver business value.”
Gartner states, “Insurance CIOs should expect to work with preidentified third parties for their open APIs.”
Gartner continues, “Insurance CIOs should aid partners to experiment with the creation of new services and business models using the open APIs by creating sandbox environments that don’t require the same level of scrutiny and registration as production usage.”
As detailed by Gartner, “Insurance CIOs who intend to exploit the potential of open APIs must adopt a continuous approach to API security. Investment in API gateways and microgateways for mediating access, monitoring traffic and providing security features will be essential tools in the overall API protection approach.”
Gartner writes, “Insurance CIOs must anticipate increases in open API call volumes and their impact on the value chain. This ensures that their architecture can cope with not just the volume but also the response times that have been agreed on with third parties.”
Gartner states, "To ease the path for future engagement with public API marketplaces or API aggregators, insurance CIOs should focus on building consistent documentation, definitions, performance and monitoring, and versioning of APIs. This will start the process of “productizing” APIs. Insurance CIOs will also need to ensure that their API marketplace strategy is aligned to their ecosystem goals."
Learn more about the open API best practices that insurance CIOs can adopt from Open Banking by downloading your complimentary copy of the report.
*Source: Gartner: 5 Best Practices Insurance CIOs Can Adopt From Open Banking Initiatives to Shape Their API Strategy, Sham Gill, 12 June 2020.
General Disclaimer:This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Akana.