The future of technological expansion is now. The world has opened up a plethora of opportunities with technological and digital advancements in the insurance industry with integration in open architecture. This is where the API (Application Programming Interfaces) platform is gaining momentum. An open API helps you integrate data from a completely different ecosystem to increase efficiency without reinventing the wheel. For example, weather forecasting on your smartphone wherein google integrates with weather forecasting APIs to show daily weather reports; or logging into any particular application or website with social media without recreating the ID and password! There are many common APIs that we use in our day-to-day lives without realizing it. The Rise of API as a Value Proposition With the improvement in the InsureTech landscape, there has been tremendous growth and impetus in innovation and improving the value proposition for the consumers. In this world of complete digitalization, each consumer needs a customized approach for their needs at various touchpoints of their user journey. With an inbuilt API architecture, the open insurance platform has been able to connect with the entire ecosystem of data and provide the best offering to the consumers.
This is where InsureTech giants are integrating with insurance companies for a mutual benefit to enable business and increase insurance penetration by providing a personalized product instead of a one-size fit. This can be seamlessly integrated with sophisticated digital and data solutions for the smooth flow of information across all levels of the whole company value chain. The rise in connectivity has led to the adoption of APIs and seamless API integrations, which are now essential components of any digital strategy.
What role do API Platforms play in the Indian Insurance Industry?
With cross-selling of insurance along with flight tickets or damage protection along with an expensive phone or extending the warranty with insurance coverage, the entire purpose is to help the consumer fulfill a part of his goal. The insurance is positioned at various touchpoints of the user journey and works out as a win-win for all the stakeholders. The insurance companies strive to increase insurance penetration while providing a value proposition to the consumers.
The insurance industry is an early adopter of the API platform. There are several stages at which this integration can and has added value in the entire chain of a consumer’s journey. Cross-selling of insurance at an existing financial services platform through the banking, non-banking financial corporation as well as investment platforms, is only the beginning. The next step is when insurance is positioned outside this ecosystem to provide value to the customers such as eCommerce websites, retailing outlets, etc. by adding insurance to mitigate the risk and thus enhancing the offering to the end consumer. By integrating an insurance API, a seamless and frictionless insurance product can be added in this digital era to enhance the entire bouquet of offerings.
Creating an Insurance API platform
There are many ways to create a robust insurance API platform that can be integrated with other businesses, and some of the most popular ways are mentioned below:
Digital Integration of Insurance with the Ecosystem In our digital, customer-centric world, the evolution of insurance is inevitable. It is not just about selling a product to consumers anymore - it's about what customers are trying to accomplish and how insurance can be part of that journey. As integration specialists, we have seen firsthand the power of integration in enabling business. Yet integration is not limited to enterprise systems; it also applies to the network as well.
API Insurance Marketplaces The API marketplace has evolved to the point where it is not just about APIs. It’s also about who else offers APIs that might be of interest to the specific target audience. Let’s look at two different types of marketplaces, based on whether or not they are open to all companies in the industry as a whole.
Simple Marketplace: A simple marketplace is defined as an extension of the ecosystem. In this model, the consumers can either get paid or avail of free insurance as a part of a commission model, such as free insurance in-built with a credit card.
Advanced Marketplace: An advanced marketplace includes successful APIs already existing in the industry and wish to partner to cross-sell to an established customer base. And the company would be able to increase the overall offering to the consumer by integrating the API into the system.
Insurance Platforms Machine learning and artificial intelligence have taken over most automated jobs, and so has modern underwriting in a post-covid era. According to McKinsey, underwriting as a concept would cease to exist by 2030 as it has already been reduced to a few seconds with data analytics and programming interfaces. APIs enable a creative approach to fresh company concepts that were not possible before such as risk assessment, reinsurance, access to data and statistics, better claim administration, etc. Secondly, some businesses seek new revenue prospects by offering key functionality as a service accessible via API. However, to be a part of the ecosystem, insurance companies need to adopt digitalization and have an open architecture. This is where API comes in handy.
According to McKinsey, about 30% of the global revenues by 2025 would be derived from ecosystems across sectors. The power of the digital world has grown beyond measures, and Insurance-as-a-software (IAAS) with the use of transactional APIs would soon become operational. Insurance would become the highest needed risk-mitigation tool and the most relevant ecosystems that require insurance to be embedded would be housing, wealth protection, health, travel as well as B2B services.
A Change in the Outlook
The insurance industry is undergoing a digital transformation. The days of reactive risk adjusters are coming to an end as proactive life companions take over. To bring about this change, companies must embrace self-disruption and take a customer-centric perspective. Creating a digital platform including ecosystems and marketplaces can play a significant role in this transformation. In the insurance industry, risks are managed in a reactive manner. Insurance companies wait for their customers to file claims before they take appropriate measures. That is not the case anymore and they have undergone a digital transformation process that has enabled them to become risk preventers instead of just risk adjusters. Building an online infrastructure with ecosystems and markets can also help to accelerate this transformation.
Here are some of the advantages APIs have provided to insurance systems.
Insurance APIs have been an important part of the insurance industry for a while now. They change the way people interact with insurance companies, with consumers prefer this new technology to phone calls and paper documentation. The most important reason is sheer efficiency. With Insurance APIs. processing claims without any paperwork or lag is extremely seamless and hence appreciated.
Insurance APIs provide a competitive edge by increasing the overall offering with intelligent customer service through Improved Risk Assessment. One example is through real-time fact-checking - an API can be used to cross-reference personal information supplied by customers against databases with records on things like credit history, employment status, etc., which has helped insurers identify fraud before it occurs. Additionally, by reducing the TAT for underwriting, a more competitive premium can be offered with the same level of protection.
Insurance APIs have enabled businesses to expand by offering a larger offering to their consumers and thereby enhancing the revenue without much change at the transactional level.
Insurance APIs make data collection much easier. With all of the data created by devices, applications, and networks, insurers use technologies like artificial intelligence (AI) and machine learning to evaluate the process and organize the information to provide better service. It allows customers to receive refined ‘one size fits all’ and customized products like embedded insurance.
TurtleFin has been digital-ready for a long time now; making it the largest insurtech company that pioneered the offline-online model in India. The TurtleOne API helps to scale businesses with easy integration into the existing systems. It is a plug-and-play technology with minimal paperwork and a seamless tracking facility with proper MIS and audit. It helps to manage the entire backend process with proper compliance and uniform data management.
Contact us at your earliest to learn more about the TurtleOne API and how it can help you stay ahead of the curve in this fast-evolving industry!