Is using APIs in insurance essential for your business?
Using APIs in insurance
Application Programming Interface (or API for short) essentially enables connecting various IT systems or applications and allowing them to use each other’s functionality. Using APIs in insurance can serve multiple purposes and business opportunities with the potential of bringing with it cost-efficiency and flexibility for selling and managing insurance products.
Traditionally, IT infrastructure in insurance has been heavily reliant on core systems – huge central databases that contain all the policy, accounts and claim information and take care of all of the back-end processing of an insurance company or intermediary.
With the advent of new opportunities in online insurance sales and customer servicing, many of these core systems are now hindering opportunity precisely, because of their centralized and closed off architecture, which does not allow them to “talk to other systems”.
For this very reason, Insly has developed APIs for most of the common features so that users can trigger all the functions they can do from the system (like producing quotes, issuing policies, emailing documents adding claims etc.) also from a website or customer portal.
Let’s explore some of the uses of API in insurance in a bit more detail.
What are the API use cases in insurance?
One of the most common business cases is online insurance sales.
To do that one usually needs to have 2 things:
- A front-end (website or app) the customer can access (be it a broker or the future policyholder) and
- A back-end system with the capability to calculate premiums, produce the relevant documents and account files* and most importantly store all the policy data for reporting and account keeping.
Where API comes into play is that it makes the front end “talk” to the back end and allows pushing or pulling of data as needed.
Of course, there may be other elements you wish to include in your sales process, so the scheme can include more pieces performing various functions:
- Lead generation app (mass emailing, sales campaigns) that brings visitors to
- Client portal where the customer can interact and send quote information, which goes to:
- Back office system that
- Enriches form data using a risk database
- Calculates quote and sends back to the client portal
- Issued policy information is sent to
- Customer portal where the customer can access the policy and also
- Data warehouse with a parameter level overview of your entire portfolio, which in turn allows you to use this insight to make changes to your product on the customer portal and back office system
This type of architecture where multiple applications perform various functions in a coherent business process can be loosely defined with the term “microservices” as opposed to the more centralized “monolith” architecture (google “microservices vs monolith” for a more detailed and technical overview).
Other use cases for APIs in insurance can include client self-service for FNOL and claims management, client communication via chat(bots), data analytics, fraud detection, and many other potential benefits. We will probably see more use cases emerging as the industry embraces this approach more and more.
*As a side note it’s fairly simple to create the sales related functionality directly into your website or app and most probably your web developer can do it (if they are any good), but building a robust database and back office system that works for insurance is an exercise we wouldn’t recommend undertaking unless you have unlimited resources and a couple years of life you are happy to give away.
A sample case study for a very unique product
Bsurance works in collaboration with Playbrush who sells toothbrushes with a mobile app to motivate kids to brush their teeth. Alongside the toothbrush, Playbrush and Bsurance offer Dental Accident insurance. The toothbrush and insurance are sold together at the same time which means an API is needed to register policies at the time of purchase.
This is how it works:
Once the customer has decided that they would like Dental Accident insurance included to their Playbrush app subscription, Playbrush makes an API call to Bsurance, stating that insurance is required. Shortly after that, Bsurance sends an API call to Insly, describing the details of the insurance policy - customer data, insured persons, sum insured, policy period etc.
Once this is done, Bsurance sends a final request to issue the policy in Insly, which will generate the needed policy documents like Insurer Terms & Conditions, Data Protection Agreement, Claim information, and the Policy Certificate, which are sent to the customer via e-mail which completes the policy issuing cycle.
Thanks to APIs, all of the above happens automatically in a matter of seconds.
If a claim were to happen, Playbrush has provided a webpage where customers can submit the details of their claim and the information is then transferred to Bsurance and Insly. Once the information is in Insly, a designated person from the insurance company will assess the claim and provide the customer the money for the dental repairs.
What does the insurance future look like with API solutions
The ability to connect multiple parties and applications will at the end of the day mean more automated processes and less manual labor as the “unnecessary bits” the customer doesn’t need are removed. At the same time, this means increasingly higher expectations from the user when it comes to flexibility for mixing and matching their software solutions into one service.
If you want to discuss how we could help bring your products online
Just book a demo via the link below. We’d love to hear how you do business and your thoughts on how it could be more efficient and automated than today.