InsurTech and Romanticism with Integrations & APIs

Learn the ABCs of integrations and how InsurTech has doubled down on integrations and APIs (Application Programming Interfaces) to reduce friction and add functionality to help the insurance industry do more with less.

COVID-19

Nearly every agency is digital, and most businesses have learned to survive while working from home during the pandemic. Challenges are countless, and so are the opportunities; it is entirely up to the agent if (s)he sees the glass half full or half empty. However, organizations who have figured out how to implement opportunities can cut costs, improve efficiency, and help the bottom line.

Using your imagination to create a website several years ago took an act of genius with a significant understanding of software coding (be it silly HTML). However, today it can be done in less than 5 minutes with zero understanding and a tenth of the cost. That is what has happened to integrations — it has become relatively easy as plug and plays with no coding knowledge.

Foundation

Before we jump right into integrations, let’s take a moment to talk about the groundwork that has enabled such possibilities in cloud computing. In recent years, we have seen a rapid shift from on-prem (desktop) applications to SaaS (software as a service), which is technically deployed on cloud servers. In the early years of technology with local servers, provisioning, and deployment of servers, applications, creating firewalls for other applications to connect, and ESB (enterprise service bus) were simply nightmares, and such efforts would cost dearly and take a long time to implement. Today, integration is a click away, APIs are readily available, and connecting with several of them is normal business practice.

Today there are more than 2000 software companies interconnected via Zapier. According to the 2019 Annual SaaS Trends Report, companies with 0-47 employees use 47 apps across their organization, while companies with over 1000 employees use over 19,000 apps. According to API directory ProgrammableWeb, the number of web APIs has grown 1,000% this decade alone, from less than 2,000 listed in the directory at the start of the decade to over 20,000 today. This data talks about inter-connected systems and how it is no more a game of standalone systems.

The Business Case for Integrations

Words like integrations and APIs are relatively new in the business world, and their use is increasing day by day. No one will deny the fact that developing an API strategy for any software company is table stakes. One of the common reasons is your client’s business processes are dependent on other tools, and to gain efficiency he would prefer both systems to talk to each other to reduce redundancy, saving insurance agents time and money. Another reason could be they complement each other well.  Sales and marketing tools that work together make your offering look comprehensive  and present opportunities to co-market together.

Integrations do not come risk-free. They have their own share of challenges including making sure the engineering team on both ends are calibrated to the designed outcomes, as any uninformed changes may impact performance or outcome on the other end. It is important to understand what it takes to monetize the value of API before committing to it. Once you have invested time and resources into this development, it is important to ensure that the scope is clear, be it adding a data point to one of the systems, updating any data changes to a system, or deleting them and vice versa. This ensures that the type of change and the scope of change (data fields) are not impacted by development of any new features. Needless to say, all this has to align with the leading priority for both organizations, else one will do all the heavy lifting and the other will drag it for a lower ROI from this effort.

1:1 vs. 1:Many

There are two types of integration. In one, two systems are connected directly and thus these APIs are designed and developed to connect to specific fields of specific systems and vice-versa to add, delete, update, etc. This usually happens when there is a deeper strategic alliance between the two systems. For example, InsuredMine integrations via API with AMS360, QQ, or NowCerts. These are all specific 1:1 integrations and relationships.  

But there are also one-to-many, or just two applications/software being connected as many-to-many. This is also called iPaaS (Integration Platform as a Service). iPaaS is basically a service that allows two systems to communicate, such as in building an advertising program that runs on itself:

  • Facebook to Gmail: Get emails with new Facebook Lead Ads leads
  • Facebook to GSheet: Add new Facebook Lead Ads leads to rows on Google Sheets
  • Google Ads to Slack: Send messages to Slack channels whenever new Google Ads campaigns launch
  • Google Ads to GSheet: Generate rows in Google Sheets at the start of new Google Ads campaigns
  • Facebook to Ringcentral: Make calls via Ringcentral for Facebook leads

InsurTech and Integrations

InsurTech doesn’t represent an isolated case of APIs, and APIs have influenced, extensively, the next-generation systems, processes, and business models. In all insurance types, whether p&c, life, or health, and in each of their product and customer journeys, there has been an additional push to digitization, customer experience, and data accessibility.

At a high level, most of the carrier systems (core policy admin systems) have already built or are in the process of building API to connect to systems used for quoting, policy management (Agency Management Systems), payments, and much more.

A few examples:

  • User acquisition: Carriers and agencies are actively using a suite of tools and connecting them via APIs or Zapier to bring them all in sync. This is due to all the marketing tools available to integrate Facebook, ad campaigns, and content into a platform (their CRM, and with the help of APIs of these systems especially leveraging Zapier).
  • Quote comparison sites: Most of the integrations on comparison sites are one on one, where each quoting tool must build separate integrations with each carrier to get real-time data, rates, qualifications, and even options to underwrite and bind specific risk, all via APIs. This segment has seen significant growth, but due to a lack of data standardization and aged core systems, there are still a lot of opportunities. Comparison tools are not only pulling data from carriers but several other data sets via direct API integration or data query. It is no longer a race about who can quote fastest or with the least info, but also about producing the most comprehensive and accurate outcome. Standard home, auto, and life insurance quotes have done well but small commercial, health or surplus lines are far from being done. One of the main reasons being the lack of modernization of carrier core systems and underwriting technologies, and access to data for underwriting.
  • Customer engagement: Insurance agencies’ business model has been time tested for more than 100 years and digitization impacted a segment but not all. But then came COVID-19, the eyeopener. Brick and mortar were transitioned to Zoom meetings, and handshakes became calendar invites. Now engagement was a whole different beast and the realization was, sales could be equally strong digitally. CRM has gained respect and focus on CRMs and marketing automation is at an all-time high. Agencies realized their AMS (Agency Management System) was great for policy management but lacked a CRM for client management. However, life would be difficult and filled with inefficiencies if the same data were to be managed on two systems unless they were connected. An all-in-all CRM platform well connected with an Agency Management System will help to achieve business goals.

Thus, a whole new wave of AMS and CRM API connections has been seen in the last few years. CRMs existed for more than 20 years since Salesforce, but it was never as well connected as it is today. Thanks to APIs from agency management systems who have stepped up their game including Vertafore, Epic, Nowcerts, Hawksoft, and more. These customer engagement platforms, or CRMs, are not only one-on-one connected to an AMS but to several other platforms for the sales and client management journey for agencies, but are now also much easier and efficient.

The insurance industry can now realize the distinct difference in business workflow by adopting CRM. CRM for insurance has reduced lead response time by enabling automation at every phase, which has contributed to building a good rapport with clients. To organize, run and maintain a book of business more effectively, a well-designed CRM, with appropriate AMS integrations, can be a radical improvement for the insurance business.

  • Data and analytics: This is a classic example of data aggregation. Insurance products like Root, Trov, Lemonade, CarpeData have very well leveraged the data from multiple sources and built integrations via APIs where needed–some with carriers or other fintech services. They are able to deliver value to carriers, customers, or other beneficiaries of such data for better assessments, underwriting, quoting, distribution, claims, or customer experience. IoT, AI, mobile technology, RPA, and big data are some of the core technologies that are enabling organizations’ business models, insurance products, or processes.

A successful API strategy is not just about building integrations for larger offerings, but it needs to be carefully crafted to effectively deliver solutions aligned with future plans as it will take significant investment from the business and technology team to develop, manage and align with other organizations.

With the changing landscape, insurance, as a product, will change dramatically. It is expected to be more open, where customers can mix and match what they need from multiple carriers. I expect this will create opportunities, and the ecosystem of insurance as a service (IaaS), based on technology developments, APIs, and customer needs. We will see a whole new level of transformation in terms of insurance delivery, usage, and servicing. One of the preconditions for such a situation to exist is the open APIs from carriers and standardization in policy or contracts.

Currently, insurance agents have started to realize an immediate need and are desperately looking for some of the best insurance management systems that are uncomplicated and effortless. 

Conclusion

The insurance domain is now exceeding new heights by embracing API and integration. Being a part of one of the most dynamic industries, insurance entities are trying to enhance client communication by adopting automation. The biggest concern of the insurance industry is now being solved by integrated API solutions.

Application programming interface (API) protocols are now letting agencies’ software seamlessly move data and tasks from one step of a process to the next.

  • Seamless data movement
  • Automated communication
  • Improved workflow

It is clear that APIs and integrations are benefitting the entire insurance value chain, from individual agents, carriers, InsurTechs, underwriters, insurance agencies and consumers.

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