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Leveraging APIs to Accelerate Insurance Industry Transformation, Part 3: Examining the Competitive Landscape Through an API Lens

Jeff Dillon

Senior Manager, Insurance Consulting, EPAM

Igor Gorbunov

Director, Head of API Practice, North America, EPAM
Blog
  • Insurance

Insurers must have the ability to quicky pivot in response to evolving consumer behaviors and technological advances. That’s where a solid API strategy comes into play. As part of this initiative, businesses must develop a functional API roadmap that guides the API enablement of select business capabilities. To realize the full benefits of APIs, it is essential to utilize a productization framework and publish them as real products that can be easily adopted by consumers.

The API competitive landscape for insurers involves being a consumer, but also a provider, of APIs. Presently, there are a number of common insurance API products and platform trends arising to accelerate business growth.

APIs in the B2C Market

The B2C market has been the early focus for insurers, as APIs have been easier to develop with less complexity for personal, pet, telematics, connected car, life and annuity products. These types of APIs originally concentrated on providing greater usability for consumers throughout the insurance lifecycle. Today, consumer APIs have matured, creating new capabilities, as well as driving cost savings and revenue growth. For example, Axa Insurance partnered with PropertyGuru to sell property insurance through Zillow, and with Scootsurance to offer flight insurance on Expedia for the Singapore market. Using external partners to help develop new business models and bring new API products to market faster has proven essential to B2C business growth.

APIs in the B2B Market

API maturity is also progressing in the B2B market, offering more complex products to insurers who have a set digital transformation vision and strategy. APIs are becoming more advanced across underwriting, policy servicing and claims with emphasis being placed on real-time exchanges, which have remained a higher priority because they provide the customer with greater ease of use. For example, Zurich developed APIs to enable real-time data sharing with customer systems related to risk engineering information, policies and claims. Additionally, Chubb has launched Chubb StudioSM, marketed as ‘digital insurance in a box’ that simplifies and streamlines the distribution of the company’s insurance products through its partners’ digital channels around the world.

Initially, insurers have consolidated efforts around API coverage of distribution per traditional business models, relying on direct and third-party agent/broker channel platforms in the small- to mid-size enterprise market. However, opportunities exist for insurers to consider API monetization with B2B partners and insurtechs as a new source of revenue—Nationwide has partnered with Bold Penguin to build a digital storefront portal for agents to improve commercial underwriting efficiency. Down the road, other carriers could join the digital storefront.

The common theme across those who’ve succeeded in developing leading transformation footprints: they excel at building APIs.

Productizing APIs via Developer Portals

Despite an industry-wide push for innovation and digitization, today’s insurers are at different levels of maturity in their APIs. In many cases, those at more advanced levels have built developer portals as part of their strategy. External partners are interested in insurers who have developer portals with sandbox capabilities, automated help desks, self-service support and communities with established API standards. The developer portals allow external partners to consume and test insurer APIs, as well as offer the ability to easily design, quickly launch and effectively manage insurance offerings for their customers via websites or mobile apps.

Insurers with advanced developer portals are building and extending insurance products that are successful in attracting high volumes of customer adoption, such as usage-based auto insurance programs. Meanwhile, insurers without these portals have been challenged to keep pace with their more digitally mature competitors from both a customer experience and technical capability standpoint. Commercial insurers’ API developer portals are generally immature and lack advanced capabilities, hindering the ability of B2B partners to quickly design, launch and administer products and provide real-time service for their customers.

Conclusion

Today, API coverage is primarily seen as a way to offer business capabilities, such as on-demand ‘price, quote and issue;’ modification of policies and claims, contracts and other policy documents; insurance product and coverage details; and policy servicing via mobile applications for consumers. Insurers who deliver these real-time, API-enabled capabilities are outpacing their competition.

Thus, it is imperative for insurers to weave a comprehensive API strategy—enabled by both business and IT partners—into their overall digital transformation strategy. The API product development roadmap needs to be aligned to solutions that include risk coverage, policy and claims servicing encompassed by continuous risk advisement.

In addition to building the right APIs, API strategy success is achieved through productization and development experience, which are the two main drivers of API adoption. Mature developer portals are paramount for attracting partners to consume and test B2B and B2C open APIs for insurers, as well as to provide the ability to design, develop and launch insurance offerings much faster within the marketplace.

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