Shopping for insurance through digital platforms has become quite common. A survey conducted in June 2020 found that respondents from India preferred to buy insurance online. Some 66% of the Indian respondents enjoyed the ease of application in shopping online while 62% were drawn to the competitive premium rates (Source: Swiss Re).
But there is a sticking point. Despite the convenience of digital purchases, many put off their insurance-buying decisions. Why? Because, given the multitude of insurance options, policy purchases can feel overwhelming. Customers often struggle to zero in on a plan that is both adequate and affordable.
Embedded insurance takes this strain out of insurance shopping. Buy an e-bike, and the seller offers bike insurance to go with it. Schedule your annual health check-up and get a premium quote for a health insurance plan. In both cases, the right product is provided to the right customer at just the right moment. Therein lies the appeal of embedded plans. And it is all powered by APIs!
Embedded Insurance Supports End-Users
When insurance policies get bundled with non-insurance products and services, that is called embedded insurance. Booking flights through an online portal often fetches you a quote for travel insurance. Accept the offer, and the premium gets added to your bill. Thanks to policy bundling, you now have flight tickets plus insurance coverage in case of flight cancellations, baggage loss, and medical emergencies.
The beauty of this is that the buyer does not need to contact an insurer separately. The travel website provides an end-to-end digital customer experience. Insurance APIs work tirelessly in the background to make this possible.
Besides simplifying the transaction process, embedded insurance helps insurers expand their reach. Traditionally, customers have gone to insurers when seeking coverage. Not anymore! Bundled plans bring insurance straight to the customer’s fingertips.
By prompting users to buy insurance while shopping for other things, the API approach brings insurance to underserved markets. Embedded insurance reaches out to digital users on platforms that they already use. As such, APIs could play a key role in raising insurance penetration and closing the protection gap in the country.
APIs Drive Embedded Insurance
When non-insurance businesses offer embedded insurance to their customers, they are essentially providing a service. How do these businesses get in on the action? Not by attempting to tie up with insurance companies, which can cost time, money, and resources. The way forward is through technology, particularly the technology provided by an application programming interface or API.
Say, you rent out cars to tourists on vacation. You are looking to add a new income stream, preferably something that won’t take up too much of your time. Given your connections with tourists, why not embed travel insurance into your car rental deals? Partner up with an insurtech player like TurtleFin and incorporate their insurance API across your digital platforms. The entry barriers are low, and your customers will appreciate the added value.
APIs increase the scope for customization. A few minor tweaks to the API could modify the insurance products on offer. For example, a service centre for buses, trucks, and tempos could bundle commercial vehicle insurance into their service booking. Meanwhile, a smartphone retailer could offer gadget insurance during an online transaction. Businesses can therefore cater to specific needs, thus enhancing the overall experience of their digital customers.
API Basics—Explained
APIs are the lifeblood of embedded insurance. Future-ready, reusable, and readily adapted to different frameworks, a well-written API ensures that users enjoy a consistent experience no matter what device or platform they are on. Here is a closer look at how an API-based environment operates:
1. Distribution channels: The interface used by a customer to access an insurance product is called a distribution channel. Common examples include a web or mobile app, an internet browser, wearables such as a fitness tracker or a smartwatch, and even Internet of Things (IoT) devices such as a smart refrigerator or a smart door lock.
A customer may view, accept, and pay for a bundled insurance quote through any of these channels. When the backend APIs work efficiently, the digital customer has a seamless and consistent experience.
2. Developer experience: Good APIs have clear documentation to guide the developer on how the API should operate. The documentation highlights API specifications, functions, libraries, and other essential information. There are also code snippets that give developers handy examples of how to reuse the code effectively. An API with good developer experience makes work easier for the developer. It arms the developer with the information and tools to simplify API integration and onboarding processes for the team. It also paves the ground for updates and developments to happen on time. 3. API gateway: There may be multiple APIs and microservices running in the backend. An API gateway serves as a coordinator here. When a call or request comes in, the API gateway directs it to the relevant API or microservice. The gateway also limits the requests that a user can make. Plus, it safeguards the system from abuse by ensuring authentication and authorization requirements are met.
4. Microservices: A microservice is one component of an application’s overall functionality. Examples of microservices in the embedded insurance space include offering a quick quote, premium payment, policy issue, policy renewal, and profile update. Microservices are self-contained and may have different APIs that need to communicate with each other. They get called up based on the context, as and when the need arises.
Upgrade Your Earnings with Embedded Insurance
Embedded insurance is an emerging sector, and its graph is on the rise. This upswing presents a lucrative opportunity for businesses with a large client base. If you can work insurance into your offerings, both you and your customers will gain.
Businesses that take the embedded route get a new revenue stream with minimal investment of money and effort. Each policy sold earns you a commission and provides your customer with a better digital experience. Moreover, as your client numbers grow, the possibility of insurance sales increases as well. Revenues from selling bundled policies could support efforts to scale up your business.
If you already have a distribution channel (such as a mobile app or an online shop), embedding insurance is an easy step forward. You already have the infrastructure to implement an insurance API.
Besides, your business already has another asset: information about your customers. An embedded insurance API uses this data to create personalized offers for your users. Tailored quotes enable you to be present for your users with just the right product at just the right time in their customer journey. Your users are sure to appreciate the value addition that transacting through your digital platforms brings.
Seamless Integration with the Turtlefin API
The Turtlefin API takes the hassle out of extending your business operations. Our insurance API is easy, quick, and cost-effective, leaving your team free to focus on your core business. Setting you up with a new source of the revenue takes no time at all thanks to our plug-and-play approach.
Creating a seamless experience for you and your customers is the top priority for our team. Why should your other projects get interrupted? We understand that you need to focus on your core business. To make sure you don’t need to look away, our experts guide you through the entire setup phase. Once the API has been integrated into your platforms and testing is complete, you are ready to go live! Here is your chance to engage with customers in an extended way and win their loyalty.
Being an insurtech company, we have the insurance knowledge and technology expertise to support you in this new venture. From technical troubleshooting to customized solutions, our experts provide all the assistance you need. We ensure that the TurtleFin API brings gains for your business and happy experiences for all your digital customers!