The Role of APIs in the Digitalization of Insurance Companies

The Insurance sector is truly dynamic, and thus the insurance companies are on a constant mission to untangle legacy systems. In order to go “beyond”, there is a necessity for a digitalization of the industry to maintain its pace with the changing customer expectations. Along with that it is important to keep in mind that efforts put forth into digitalization can no longer be restricted within margins of improving efficiency and productivity within the firm – it must be across the entire board for an end-to-end digital experience. When talking about digitization, we cannot forget about one of the fundamental building blocks – the Application Programming Interface (API).


What is an API?

To simply say, API are small pieces of code that allow various software applications, devices, and data servers to communicate and dispense responses.

APIs can be used whenever an insurer needs to take out data from one system and put it in another for selling a new policy or processing a claim. APIs make seamless communication between different touchpoints possible and act as the focal character for digitizing the insurance business.


Types of APIs in the Insurance Sector

Prior to explaining the “API view point”, it is important to know who uses APIs in the insurance industry and how are they used exactly. Agents, insurance providers, and carriers, all use APIs for separate purposes.

APIs used by the insurance industry can be classified into four key categories:

  • Workflow

  • Data aggregation

  • E-commerce

  • Quoting

Many a times, APIs overlap, and they are then used in concomitance. APIs have an easy format which helps to integrate with existing system and help drive insurance companies on the path of digitalization.

This feature ensures to minimize issues during initial implementation. A good structure of API should be such where instructions are seamless, and the final product that is delivered is as expected.


How APIs support the digitalization of the insurance industry

Integrating APIs can open up a new world of possibilities for insurers by enabling them to offer a higher degree of personalization for their customers. API-led connectivity also helps insurers to simplify complicated and repetitive tasks to enhance productivity within the firm. In other words, APIs not only promote better efficiency for insurance firms but also deliver better experiences for the end customer.

How do APIs support customized offerings

It possible to offer products based on usage trends and the needs of customers, thanks to APIs. This really help insurers to come up with customized offerings in real time. More and more customers expect smooth digital experience and this is exactly why it is particularly beneficial for insurers.

APIs can get a hold of relevant customer data and generate a customized solution based on the individual risk profile. It also uses a dynamic risk assessment for offering customized quotes.


Promotes efficient underwriting 

Predicting the risk in the correct fashion is crucial for insurers.

API integrations are enabled to go a long way in improving underwriting models and assist insurers become lither and more efficient. They can retrieve data straight from the source in real-time and underwrite model considers complete and up-to-date information. Automation also allows helps to reduce time spent in identifying, extracting, sorting, and analyzing large data sets.

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