Other parts of this series:
At InsureTech Connect, I had the great pleasure of sitting down with Kate Smith of AM BestTV, Ilya Bodner of Bold Penguin and Kristen Tyrrell of Catch to talk about the value of APIs and how they support insurance ecosystems.
APIs (application programming interfaces) are not new or particularly transformational at this point, but they offer significant advantages to insurers that embrace them. They enable carriers to:
- Share data internally and externally in a way that is safe and secure.
- Connect with ecosystem partners.
- Access faster and more agile capabilities, through insurtechs such as Bold Penguin and Catch.
- See benefits across the value chain, particularly in distribution.
Although most insurers have been building technology for decades, their legacy systems can be inflexible and burdensome to update, making it difficult for carriers to meet customers’ rapidly changing expectations. APIs bridge the gap, enabling them to access and share data without having to swap out all their old technologies.
APIs are especially valuable for providing distribution channel options—business to consumer, or business to business—and enabling carriers to connect with new customers through more elegant interfaces. They also open new pathways in claims, in underwriting and across the value chain, supporting more streamlined interactions. These benefits are key for forward-looking insurers that operate in ‘the new’ and want to grow their market share.
But data security and veracity are crucial. Insurers and their ecosystem partners need to be sure that only the right parties have access to data through their APIs, and that the data they share is reliable and accurate.
As the underlying technology stack that supports APIs evolves, insurers must transform their teams to a technology-first focus. It’s not just about attracting the right engineering talent, but also about learning to work in an iterative, agile way, so that they can respond to changes quickly and efficiently. Insurtechs are ahead in this capability, able to adopt new standards and technologies at a faster rate than most incumbent insurers. This is another reason they make such valuable ecosystem partners.
In the future, APIs will enable carriers to provide products and services closer to real time, which is what customers expect based on their interactions with the GAFAs—Google, Amazon, Facebook and Apple—and new digital-first competitors. Insurers without APIs will not only miss out on the benefits of safe and secure connections with ecosystem partners; they also risk being left behind.