Insurance technology, InsurTech, insurance integration, efficiencies, productivity, streamlined submissions – you’ve heard all the buzz words but what does this really mean to insurance professionals? Having a deep understanding of how technology evolves as well as the technology’s limitations, will help you plan, operate, and make business decisions in the future.
The immediate impact will increase efficiencies, automate the buying process, improve the underwriting process, and facilitate faster claims processes which decrease a firm’s bottom line while increasing activity. But this alone will not launch your business into what will ultimately become key to every single distributor’s success.
If you want to survive the insurance evolution then you must change your mindset and you must start thinking like an insurance carrier. In the world of insurance, data is king (of high value) and your integration partners will be your queen (the tool used to execute your commands).
What Is an InsurTech Integration?
Let’s start with the basics. An InsurTech integration can be any type of technology that connects at least two systems and serves the insurance industry to enhance the end-user experience. The most commonly used technology to connect and transfer data is called Application Programming Interface or API for short.
What is an API in insurance?
An API for insurance is a set of tools that allow developers to integrate their applications with other applications in the insurance industry. It can be used by developers to build new products or services on top of existing products used among insurance distributors and service providers. We previously wrote an article all about how APIs are affecting the insurance industry. Check it out to learn more about this topic.
Choosing an Integration Partner
Choosing the right technology partner for your company can be a daunting task. The market is flooded with different tech companies that are offering different services. But, there are a few factors that you should consider before making your final decision.
The first step is to identify your business objectives. What are you trying to achieve? You should also assess what type of insurtech solution you need, whether it’s a full-stack or not, and how much capital you can invest.
You should also find a partner that has expertise in the same sector as yours, so they can help you scale your business more quickly. This will ensure that they have the knowledge and understanding to work with your company on all levels.
Set Yourself Up For Success, Avoid the Pitfalls of Integrations
Selecting an integration partner is not easy and you must do your due diligence before making a decision. This will help to make sure you don’t get into a bad situation in the future because of a poorly chosen partner.
The first pitfall to avoid when doing an insurance integration not communicating with the team and company doing the integration. This leads to a lot of misunderstandings and miscommunications as there is no one to clarify any doubts or questions.
But it’s not just communication from your end. A company that is familiar with these types of insurance integrations may be comfortable communicating in a way that doesn’t work for you. Be sure to clearly set out expectations around how much and what type of communication you expect to receive. Compare that with their onboarding documentation to what it includes as well as additional support once you’ve completed your onboarding.
The second pitfall is the lack of transparency in work processes and timelines, which can lead to delays in delivery or missed deadlines. Make sure you understand what they are responsible for delivering as well as your own responsibility for implementation and engagement.
Furthermore, learn to be flexible with timelines. When it comes to development work and connecting two completely different systems, unexpected things happen. Something wasn’t disclosed or known on your end. A key developer from their side got sick. However, the contract should be clear about what is an acceptable delay, versus what happens when the delay goes on for far too long.
The third pitfall of insurance integrations happens when there is a mismatch in expectations from both sides. For example, one side might not have been clear about their requirements for the project and this leads to an inferior quality product or service being delivered at the end of it all.
Or you want the project completed in a month when in reality it takes three months. It’s not always possible to speed up the process. And where there is room to rearrange priorities, be prepared to pay additional for the service.
The fourth, and maybe the most important, partners need to have a clear understanding of their contractual requirements, data ownership, and exit strategy (process, data export & cost). Nothing can make a partnership sour faster than thinking everything is ready to go only to have it halted because they were unable to meet the requirements.
This should be clearly set out in the contract you sign, so be sure to read it thoroughly. And it is important to understand that an integration is just one part of the process. Once the integration is complete and you have been onboarded and understand how it works, it’s your job to use the integration/software the way it was intended.
One of the most important things to understand about APIs, technology, and integrations is that for all of its ability to handle time-consuming, tedious, repetitive tasks, it can only do what it’s been programmed to do. So it is your job to understand how the integration works (this goes back to the expectations part) so that you don’t become frustrated.
5 Keys to a Successful InsurTech Integration
Thinking about both the benefits and questions to ask can help the process go smoothly. But those aren’t the only considerations. To thrive after an InsurTech integration, focus on the following five keys:
- Understand your existing capabilities vs. InsurTech providers: Do they align? Do you need to make changes to manage new tech capabilities, e.g., by adding IT staff?
- Be patient: Timelines shift. Try not to get too worried if initial integration plans get delayed.
- Be prepared for hiccups: In addition to timelines shifting, the integration doesn’t always go perfectly right away. Know that there might be some hiccups to overcome, like sorting out interoperability issues between your systems and theirs.
- Set clear goals, expectations, and milestones at the beginning: While integrations might not go exactly according to plan, it’s still good to have benchmarks in place. If you’re clear about what you want to get out of the integration, you can correct course more easily, since you know the direction where you’re trying to head.
- Focus on iteration: Don’t overwhelm yourself. Break the integration into very manageable parts to ensure the business objective is being met during each step, the technical integration is working as planned, and the next iteration cohesively binds to the previous.
If it seems like we are repeating ourselves, it’s because we’ve seen it time and time again. We know how complicated and challenging an integration can be. We want to help set you up for success. And following these steps can help you complete a successful InsurTech integration.
After doing so, you can end up with more advanced tech capabilities that improve both employee and customer experience. With the right tech, you can get more done in less time, and you can use your insurance expertise to help more customers get the coverage they need, rather than getting bogged down in time-consuming manual tasks or technology hurdles.
Partnerships Don’t Stop After the Integration
In order to build a close partnership with your software integration partners, you need to have trust in them. You need to know that they are working with you in the best interest of your company.
It’s important for the software integration partner and the customer to work closely together. The software integration partner needs to be able to provide valuable feedback on what is needed and what is not needed by the customer so that they can improve their product or service.
The customer needs to be able to provide feedback on how their product or service is being used by customers so that they can improve it as well.
Our recommendation is to meet quarterly. Here is an example of a quarterly agenda:
- Review previous and future goals and objectives
- Discuss benchmarks and metrics to keep each partner accountable
- Software integration partners should provide an outlook on feature and feature releases
- Keep an eye on the market and do research together to stay updated
- Discuss co-marketing, PR, and networking opportunities
It is no surprise that the insurance industry is one of the most heavily disrupted industries in recent years. The introduction of technology has led to a new way of working for both customers and insurers. And the insurance industry is being transformed by the use of innovative technologies such as AI, blockchain, API integrations, and big data. These technologies will help improve efficiency and ensure that customers are able to obtain the best rate for their insurance premiums.
However, the ever-growing number of business models and various insurance coverages has led to a high degree of fragmentation within the insurance market, making it difficult for customers to make informed decisions on what type of coverage best suits their needs. For example, in 2021, the number of insurance agents in the U.S. reached 523,200, and there are now over 50 types of coverage offered by traditional insurers.
To help mitigate this high degree of fragmentation in the market, insurers can use insurtech providers to provide customers with customized and fully informed products with service levels that are on par with, or better than, what is currently being provided by traditional insurers. This can be achieved through the use of data and analytics, as well as by introducing new insurance products into the market.
According to Accenture survey results, insurers are showing increasing interest in Insurtech providers due to the intrinsic benefits these providers can offer. For example, 71% of insurers surveyed across North America and EMEA said they currently have a partnership with an Insurtech provider for enhancing their overall business performance.
Insurtech providers offer unique solutions for insurance distributors embracing the tech advances and who are at the forefront of building the insurance ecosystem. Finding the right integration partner does not have to be a daunting process but it is a process that every insurance distributor should be reviewing in today’s competitive market.