What is the future of APIs? And how will they affect the insurance industry? In order to answer those questions, we must first take a look at how they have been used in the past and are currently being used. Application programming interfaces (APIs) have long been used across industries to connect different systems and data sources. From displaying Google Maps on a third-party travel site to pulling data from multiple software sources into one analytics tool, APIs have a wide range of use cases, including within the insurance industry.
While APIs are already being used by some organizations within the insurance industry, particularly InsurTech providers, there’s still a lot of room for more API implementations within the insurance sector.
“The business benefits of APIs are substantial. They enable insurers to quickly build robust technology platforms that can consume and share big volumes of data and link multitudes of partners and customers. This allows them to streamline their processes, improve efficiencies and accelerate innovation,” says Accenture.
In the future, insurance agents and carriers will likely leverage APIs on a more regular basis for everything from building out more robust websites to simplifying claims and policy quoting. In this guide, we’ll look more closely at some of the ways that APIs can be used to improve the insurance industry going forward, namely by improving customer experience and overall efficiency.
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One of the top ways that APIs can improve the future of the insurance industry is by increasing efficiency. Customers today, whether they’re shopping for household items on Amazon or buying a service for their workplace, expect seamless transactions.
While the overall time to decide on what to purchase and get onboarded may take more for commercial insurance than it may for other types of purchases, customers still want an efficient process, which APIs help deliver.
Getting the Right Information
Many insurance companies have been investing in APIs for years. But it quickly became apparent that managing thousands of connections (from their systems to the insurance agents system) was not something they planned for or really knew how to address. However, insurtech solutions, like Wheelhouse, have made it both easy and efficient for carriers and agents to take advantage of their APIs.
As insurers increasingly leverage APIs, it will get easier and faster for customers to receive the information they need to make decisions around purchasing insurance. Likewise, insurance carriers and agents can use APIs to make better decisions internally. Because rather than data being kept within just one system or one area of an organization, APIs can allow for a free flow of data.
As CB Insights notes, APIs in insurance could be used to “provide the data necessary to adjust risk premiums in real time, update insurance quotes or policy recommendations, and much more.”
In other words, both insurers and their customers will have the data they need from APIs to efficiently make choices that are right for their businesses. Whether that’s a customer understanding how insurance prices change based on different inputs or an insurer understanding their internal data to improve their marketing, APIs can vastly improve efficiency.
As mentioned, consumers want a streamlined purchase process, even for B2B buying decisions like for commercial insurance. So, when comparing insurance options, clients shouldn’t have to wait for the back and forth process to get a quote or to find out they have been declined. Typically an agent fills out the same type of application on multiple carriers’ websites and then waits until these inputs are approved or declined to provide the information back to the client. This can take hours or even days. Who has time for that these days? Not consumers.
Instead, APIs allow for simple, efficient comparisons (depending on the software that comparison could be a rate or it could be a bindable quote). For tools like Wheelhouse, agents input the data once and quotes are automatically displayed in seconds, regardless of when an agent is available. So, as more insurance agents and carriers leverage APIs, the future of insurance will be a much more streamlined, digital purchase.
Plus, as CB Insights notes, APIs can unlock new opportunities to sell insurance. Not everything has to be done on an insurer’s website when an API connects an insurer’s offerings to a third-party site. For example, says CB Insights, an API could connect an insurer with a ticketing system to automatically allow customers to easily add-on event insurance.
In the commercial insurance space, similar types of add-on opportunities could emerge. For example, a carrier might be able to sell policies through a commercial real estate broker by using an API to display relevant insurance information or enable transactions on that broker’s site.
Better Customer Experience
Related to streamlining purchases and increasing overall efficiency, the future of APIs in insurance will likely help agents and carriers create a better customer experience. Being able to sell policies online and get the right information to customers helps create a strong experience, but insurers can go even further by using APIs as part of nurturing client relationships year after year.
For example, APIs can be used to:
- Automate the Insurance Renewal Process: APIs can be used to connect an insurer’s data around customer renewal dates into other systems like an email marketing platform. That way, client reminders can easily be sent out, with the right information included on when a customer needs to renew and how they can go about doing so. Instead of making clients stay on top of the renewal process, APIs can help insurers create an easy, repeatable process that minimizes the work clients have to do.
- Create More Personalized Marketing: In addition to using APIs to pull in information around renewals into marketing channels like email, they can also be used more going forward to help agents and carriers personalize their marketing. Not only can APIs help you add real-time data, such as to make a blog post feel more relevant when a prospect views it, but it can also help you customize your content for different customers.
As marketing automation platform Sailthru notes, “an API integration is what makes marketing emails timely and dynamic, and most importantly, personalized. The API connects the dots between the consumer’s email address, which often serves as a unique identifier, and the various systems where that user has been active.”
- Answer Client Questions: While you want to be there for clients and guide them through their questions, whether that’s around understanding policy options or figuring out how to make a claim, you can’t be available all the time. That’s why the future of insurance may rely more on the use of APIs as a way to quickly connect clients with the information they need on an on-demand basis.
For example, you could integrate a chatbot tool onto your website via an API, so if a client has a question at night or on the weekend, that chatbot may be able to provide a relevant response. Even if the customer then has a more nuanced follow-up question, this use of APIs could tide the customer over until they’re able to speak with you, thereby still creating a strong experience.
Keeping Up With API Changes
As APIs continue to emerge and evolve, it might feel tough to keep up with everything. Fortunately, you don’t have to be a tech expert to stay up to speed. Many platforms automate API integrations. For example, the Wheelhouse platform continues to evolve, adding more API integrations to additional insurance carriers so that business owners can gain more thorough quote comparisons. Yet insurance agents don’t have to do anything to take advantage of these updates other than simply continue to use the tool.
Likewise, many platforms that offer APIs update their functionality on their end, rather than requiring you to be an expert. So, while the future of APIs may get more advanced, it doesn’t necessarily have to get more complicated for insurance agents to use APIs.