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Application programming interfaces (APIs) are among the most important components of digital insurance agencies. And while many insurance agents may not fully understand all the facts about APIs, pretty much everyone uses them on a regular basis.
What is an API? Put simply, APIs act as the connectors between applications, such as to share data between two systems. Whether you’re looking at stock market data within an app, viewing a map on a travel website, or looking at an insurance carrier’s prices on a third-party site, there’s a good chance that APIs are working behind the scenes.
As these examples show, you don’t have to know all the technical details of APIs to use them. Many applications, like Wheelhouse, have built-in APIs that work automatically. Still, it helps to understand how APIs are being used and what’s happening in the overall API market to then find use cases for your insurance business.
In this article, we’ll take a look at four fun facts about APIs that can help you gain more API knowledge.
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Fun Fact About APIs #1: APIs Are Growing Exponentially
One fun fact about APIs is that even though they have been around for decades, their growth has been exponential over the past few years. The overall shift toward a more digital world means that APIs are needed more than ever to connect information together and allow for apps to integrate with one another.
Specifically, the API platform Postman tracks what it calls collections, “which are essentially folders where API developers group their API requests together,” the company explains. An API request essentially starts the process of transferring the information an API delivers. In 2016, Postman had less than half a million of these collections. By January 2021, that shot up to over 46 million collections. And Postman has tracked billions of API requests in a single year.
“Cloud computing, app integrations, and all other connected-software experiences require APIs as their building blocks. And developers are definitely meeting the demands of these evolving infrastructures with APIs,” says Postman.
Fun Fact About APIs #2: There Are 4 Main Types of APIs
Another fun fact about APIs is that they can come in several different forms. Aside from some of the technical differences, APIs typically fall into one of the following four categories, as API Friends, a community for those involved with APIs, explains:
1) Open APIs:
Open APIs can also be called Public APIs. As the name implies, they’re publicly available for anyone to use. Search engines, for instance, often offer Open APIs for others to integrate search functionality, maps and other features into other websites or apps.
2) Partner APIs:
Partner APIs can be used by other companies, but they aren’t open to everyone the way an Open API might be. For example, an insurance carrier might have a Partner API that can be accessed by specific insurance agencies who want to, say, provide insurance purchasing options on their own website, rather than directing clients to the carrier’s site.
3) Internal APIs:
Internal APIs are also known as private APIs, as they are only used internally within a company. For example, a company might want to use an Internal API to allow data to flow between two proprietary pieces of software.
4) Composite APIs:
The fourth main type, Composite APIs, can put together multiple streams of data or actions into one API, rather than needing separate APIs for each component. Companies like Salesforce, for example, enable composite APIs to streamline the transfer of information between what’s stored in Salesforce and where a developer wants to use that data. “Using the composite resources means you can simplify your code, reduce network overhead, and improve your app’s performance,” notes Salesforce.
Fun Fact About APIs #3: The Most Popular API on RapidAPI Is for Travel Data
On RapidAPI, the world’s largest API marketplace, the most popular API is Skyscanner Flight Search. And this fun fact about APIs could have more to do with insurance than you’d assume at first glance.
“Skyscanner is a metasearch engine that provides travel data for flights, hotels, car rentals, and more. Skyscanner aggregates travel and flight data so you don’t have to go to multiple sites yourself to check each individual flight plan or price,” explains RapidAPI.
In other words, the most popular API on this site is all about aggregation for things like travel quotes. This fact about APIs could signal that insurance agents have an opportunity to use APIs for quote aggregation too, but for policy quotes rather than travel quotes. Tools like Wheelhouse enable insurance agents to automatically use APIs to provide bindable quotes from multiple carriers in one location.
Even the second most popular API on RapidAPI, Open Weather Map, in some ways indicates how APIs can be a powerful tool for insurance agents. This API displays weather data, and while insurance agents don’t necessarily need to show that on their website, it exemplifies how APIs can be used to provide information that your audience finds useful.
So, perhaps an insurance agent that markets to finance companies might use an API to show stock market data on their website. Or an agent might use this fact about APIs to then find a news API that displays relevant, informative articles for their clientele.
Fun Fact About APIs #4: Finance Is a Top Category for APIs
Another fact about APIs that could be useful for insurance agents is knowing that finance is a top category in terms of the number of APIs that apply to this industry, according to API news site ProgrammableWeb. Research from the company in 2018 found finance to be the number one category, and 2020 research still shows strong growth.
“Open Banking initiatives, the rise of digital forms of payment, the need for real-time market information and an ever-increasing customer demand for connected financial services makes this related set of categories an attractive space for developers,” notes ProgrammableWeb.
This fact about APIs could signify similar opportunities within the related sector of insurance. APIs could be used to make everything from policy quoting to policy payments more efficient. But there’s still a ways to go for insurance to catch up
“The number of APIs available to insurers is a shadow of what’s on offer in the banking industry,” notes Accenture. “But, interest in insurance APIs is rising fast.”
APIs in Insurance Have a Bright Future
As these facts about APIs indicate, the overall API market is growing rapidly, and the insurance industry has a lot of potential ways to use APIs more frequently.
Those with technical knowledge of APIs might be able to get a step ahead of competitors, such as by building integrations into an insurance agent’s website that help provide information efficiently to customers. But even those who don’t know the ins and outs of APIs can still take a general knowledge of them and gain an edge.
Look for applications that integrate with one another, which typically means they use APIs, such as to better connect your marketing and sales functions. And when searching for insurance-specific software, look for tools that use APIs to more efficiently aggregate data, expand distribution, or any other use cases that can help you grow your book.