APIs are the superpower the insurance industry has been waiting for – hence the recent rapid growth of API insurance use cases. Insurance APIs can support firms to achieve better results in less time, underpinning everything from ironing out quoting inefficiencies to improving the customer experience. Read on to discover how agents, carriers and consumers can benefit from adopting insurance APIs.
What is an API in insurance?
APIs enable different applications and systems to communicate, with the API serving as an intermediary. An API in insurance is an API that connects insurance systems, including in new, more efficient ways than was previously possible.
Insurance APIs can connect internal and external systems securely and efficiently, enabling streamlined processes, more efficient workflows, a superior consumer experience and more. We’ll dive into some of these API insurance use cases below.
How can APIs be used for insurance?
An insurance API is a marvellous thing. It can lead to new partnerships, speed up claims management processes, help with collecting customer information, automate preparing quotes, underpin the verification of insurance policies and deliver time and cost savings in various other ways, including in relation to billing.
US-based home and auto insurance provider Branch, for example, is using Tyk’s API management for GraphQL to open up its platform to insurance partner affiliates. APIs are enabling the firm to offer better services to end consumers and to gain more revenue as a result.
Automation is at the heart of this, with APIs introducing efficiencies across the insurance industry. Consider the vast amount of information sharing that takes place both when arranging policies and when managing claims. At any point where information is shared, APIs can help things to progress faster while also delivering robust and reliable security.
How do insurance APIs work?
Insurance APIs work by connecting systems and enabling the secure, efficient sharing of data. They come in several flavours, each with different uses:
Public APIs
Public APIs are available for anyone to use. They are an excellent way to obtain new customers and drive new revenue, for example, by enabling efficient data collection from consumers or opening your offerings up to comparison apps for review.
Private APIs
These are for internal use only. They serve as a frontend interface to your backend data and applications, working efficiently across various microservice gateway and access patterns managed by your internal developer team. An example is using private APIs to span data silos within your business, aiding the easy cross-selling of different insurance products to the same customer.
Partner APIs
You can provide these to select partners. They make it easy for partners and agents to sell your insurance products to their customers, driving greater revenue for their businesses and yours.
An efficient and secure way to share insurance information
APIs provide for the efficient and secure sharing of insurance information. When used alongside an API gateway for microservices, they are easy to build and deploy with security baked in as standard.
This is one of the benefits of Tyk – as an API management platform, it provides out-of-the-box security features that can easily be managed via a central dashboard. You can implement security at the insurance API platform level to standardise this across all the individual insurance APIs you create.
This central approach to API management means your developers can build different APIs to meet their needs without worrying about the security element. Meanwhile, you can enjoy the peace of mind that comes with knowing your customers’ data is protected both at rest and in transit. This reliable security is enabling APIs to boom not just in insurance but across healthcare, finance and other API industries where security is a top priority.
Who uses insurance APIs?
APIs are increasingly being adopted across the insurance industry as agents, brokers, partners and carriers all witness the benefits of being able to organise, analyse and display insurance data in a way that fits neatly into any workflow. Let’s look at a few examples.
Agents
Insurance agents can use APIs to speed up the information-gathering process with potential and existing customers. Streamlined workflows can also contribute to everything from more efficient billing to automated chatbot services. Companies that integrate insurance APIs can also enable agents to securely store customer data in the cloud.
Brokers
Brokers, like agents, can benefit from more efficient information gathering when using API insurance workflows. They can also use APIs in connection with social media, for example, to capture marketing data or to flag up references to insurance companies that may lead to sales opportunities.
Insurance partners
Many firms choose to buy in elements of their operations, from analytics tools to customer record management solutions. APIs can enable the smooth integration of insurance partner systems such as these, neatly bridging the gap between insurance firms, InsurTech providers and other insurance partners.
Carriers
Insurance carriers, which create and manage the policies that agents, brokers and partners sell, can use APIs to automate the quotation process. This speeds up the entire interaction, ultimately making it faster for the consumer to purchase an insurance product. Reducing friction in the selling process can also serve to drive up revenue by increasing customer satisfaction.
Use cases for APIs in insurance
We’ve already touched on a few examples of how an API in insurance can introduce greater efficiency and drive more revenue. Understanding these use cases in more detail can highlight the benefits of insurance APIs.
Iron out insurance quoting inefficiencies
As an insurance agent or broker, if you’re still picking up the phone or sending an email when you need a quote from a carrier, you’re behind the curve. Time-intensive processes like this cost insurers hugely in staff time, as well as causing wholly unnecessary delays for end consumers – with every delay representing an opportunity for the consumer to change their mind or take their business elsewhere.
APIs can iron out these time-wasting inefficiencies in the quotation process. By connecting systems and enabling near-instant data fetching, it’s possible to compile quotes from different carriers in one place with an insurance API ecosystem in operation.
Build new partnerships
Creating a developer portal to share your APIs with partners can lead to far greater reach. Not only can you make your APIs available to brokers and third-party insurance partners but to car retailers, real estate agents… anyone who might be able to cross-sell your products. APIs can enable them to do so quickly and easily, thus allowing you to build new partnerships and grow your reach.
The Tyk developer portal was an influential factor in the insurance company Branch’s decision to use our API management solution. Joe Emison, Branch Cofounder and CTO explains:
“Tyk has enabled us to bring our external, third-party-facing API proxy and developer portal to market much more quickly and efficiently than if we had built it ourselves. This has allowed us to move more quickly than our competitors, meet partner needs and delight partners, all without having to staff up or take months of development.”
Manage claims faster
Nobody wants to spend more time managing claims than is necessary. Yet the large data systems involved in claims management often means this activity becomes a tedious time drain.
Not with APIs. APIs can span the different systems seamlessly, sharing data in a way that’s helpful to all concerned. This can reduce the time that agents, brokers, carriers and others spend managing claims, thus reducing operational costs. Customers also benefit from more efficient claims management, meaning that APIs can drive up customer satisfaction levels too. This can lead to lower customer churn rates, ultimately benefiting the insurer even more.
Create new connections
The data gathered by Internet of Things (IoT) devices is changing the way we think about insurance products. Telematics units in cars, for example, can gather data about a driver’s behaviour, which can be relevant both to quoting for car insurance and to managing claims in the event of an accident. Likewise, home security cameras and other devices can be integrated into the home insurance quotation and claims process.
APIs are facilitating such changes across the insurance industry, enabling insurers to flex their product offerings in relation to emerging technology and thus remain relevant and competitive in the modern marketplace.
Improve the customer experience
In each of the above use cases, we’ve shown how insurance APIs can benefit the industry. We should also note that each of these use cases delivers benefits for the end customer. A faster quotation procedure, speedier claims process and the ability to seamlessly take out multiple insurance products at once mean less of a drain on the customer’s time. This can contribute to happier customers at every stage of the insurance process.
How other industries are using insurance APIs
It’s not just insurance companies and their consumers who are benefitting from the increasing use of APIs. Insurance APIs are also supporting greater efficiencies in a range of other industries.
Car dealerships
Car dealers have long faced the problem that customers who have just bought new cars cannot drive away in them until they are insured. Traditionally, this has meant delays between customers purchasing cars and actually being able to drive them – sometimes lengthy delays that leave both car dealers and their customers feeling frustrated.
However, thanks to insurance APIs, car dealerships can now support their customers to purchase insurance at the point-of-sale. This can be achieved quickly and painlessly, all through the power of insurance APIs.
Health
APIs are already doing much to transform the healthcare industry. The coordination between patients, healthcare providers and third-party services can be complicated, even with the advancement that electronic health records represent. Add health insurance services into the mix and the data-sharing side of things becomes even more complex.
Again, insurance APIs can help. They can enable more efficient data sharing between healthcare providers and insurers while maintaining robust security for the protection of individuals’ data. By speeding up the claims management process, they can support healthcare providers to deliver treatments faster. An API in insurance that links with a customer’s fitness tracker (to provide the customer with discounted health insurance linked to them exercising more) even has the potential to reduce the overall burden on the health sector by keeping people fitter and healthier.
Finance
Many banks offer insurance products as part of their services. These range from property insurance products for customers who take out mortgages to free travel insurance with current accounts as an incentive for new customers to sign up. Advances in APIs in insurance are enabling banks to do so seamlessly.
Legal
Legal professionals can be involved in insurance-related matters in multiple ways. A personal injury lawyer, for example, may need to deal with both medical insurers and car insurance companies. By enabling enhanced data sharing and communication between systems, APIs can speed up the process for legal professionals. Time saved by lawyers may also result in a cost reduction for their clients, again meaning that the end consumer benefits.
Final thoughts
An API in insurance can supercharge your operations. You can get products to market faster, expand your reach, stamp out process inefficiencies, grow your revenue and make your customers happier. Excited? You should be! Speak to one of our expert engineers to find out more.
