Insurance APIs - an Easy Pass to Innovation

Over-regulation, old-fashioned business models, and the lack of technology talent slow down industry innovation, which is harmful to customer experience. Customers demand a flexible and innovative experience. According to IBM, 41 percent of insurants abandon their carrier for a new one because the provider doesn’t want to adjust services for customer needs.

The use of insurance APIs (application programming interfaces) addresses this lack of insurer flexibility as they can share information and services with third parties. Companies get an opportunity to suggest better customer experience, create new digital products, increase sales, and try disruptive business models.

For instance, an insurance company with its own API can enter the online travel insurance market and boost sales through the partnership with OTAs (online travel agencies such as Booking.com or Travelocity) by cross-selling services to travelers directly from the partners’ website.

On top of that, third-party APIs are used by insurance companies checking customer data to prevent abuse and fraud.

Here are some examples of insurance APIs and APIs that can be utilized by InsurTechs:

AXA Insurance. In 2017, AXA Insurance launched its own API, which helps the company utilize the Insurance-as-a-Service strategy pioneering in the Asia region. AXA API easily integrates with eCommerce websites and applications. The technology provides real-time access to insurance services, including quotations, policy management, and insurance offerings in home, travel, and car segments. The carrier plans to introduce their API the health and life insurance segments in the near future.

The Lemonade Public API. The Lemonade Public API is an API developed by a property insurance company Lemonade. The API allows for integration with a variety of digital products (iOS/Android apps and Websites). Lemonade Public API provides a developer with products, quotations, policy creation, and payment functions. The API also suggests a customizable chatbot interface.

NAIC Registry. NAIC Registry is a public insurance API that automates standard reporting progress with the regulator, allows for extracting and storing data in Online Fraud Reporting System.

This is only a start. We can certainly more insurers to follow AXA and Lemonade in the industry’s API journey to deliver ‘Insurance-as-a-service’ in the coming months and years. There will be challenges on the way such as identifying the right use cases, choosing the right partnership models and closed mindset within carrier enterprises. But those shouldn’t stop insurers from exploring the great opportunity that APIs offer to redefine insurance sales and service models to cater to the ever-evolving digital ecosystem.

Source:

1. Mckinsey - Digital Disruption in Insurance.

2. IDC