Stars in their APIs

Exploring why insurtech’s latest favourite acronym – the API – really is a superstar

“Tonight, Matthew, I’m going to be…”

This catch phrase will of course be familiar to anyone sad enough to have spent a Saturday night at home in the UK during the 90s, watching that veritable crucible of talent Stars in Their Eyes on British TV. 

The most magical part of course was when the contestants would walk through the smoky doors dressed in their usual clothes, only to reappear instantaneously dressed as the chosen star whose most famous song they were about to recreate / unceremoniously destroy for TV audiences up and down the land.

While this golden age of light family entertainment has since evolved and broadened into the ubiquitous talent-based TV genre we know today, the fundamentals were there from the start – low barriers to entry and a format accessible to all. 

The golden age for technology

And this brings me to my point because it’s exactly what the humble Application Programming Interface (API) looks to achieve.  

Recently I’ve been asked again about the relevance of insurtech’s latest favourite acronym – three little letters hold so much potential and meaning for an industry, but whose significance is difficult to communicate to the average business-side user without their eyes slowly glazing over. 

Here I’ve distilled the tech speak into clear points on why APIs are important, what they mean for insurance, and what the challenges are.

Alright, so what is an API then?

  • APIs create the foundation for automated interactions between different applications. They are interfaces that allow one piece of technology to integrate and communicate with another, such as a client and a server, or say, one SaaS technology platform with another.
  • APIs help to standardise data flows, reduce vendor-locks and help minimise the need for costly integration projects.
  • APIs are essential to the success of the collaborative, market-wide digital ecosystem concept because they allow insurers to plug in to new MGA’s, data sources and 3rd party services such as assured verification, policy monitoring or new fraud checks.
  • APIs allow insurers to explore and deploy new technologies quickly with comparatively few resources and without the need to build every part from scratch. Even the most traditional firms can digitally transform if they create the right data integration  architecture.

What’s the catch?

Well firstly, not all APIs are created equal – in the specialty P&C market for example, huge potential exists for startups to integrate with core system data to improve underwriting and back office processing. But there’s a problem. The majority of policy systems were built in a bygone era – with minimal or downright clunky API’s that constrain usage.

If you’re a tech buyer or decision maker at an insurer or MGA, ask your core system vendors to provide clear details of the API’s they offer and be specific about which processes or data they support. If the answer is poor, push your vendor hard to improve – API enabled architectures are already differentiating which vendors will win or lose market share in the next decade.

If you’re a founder, CTO or product manager of a start-up, then consider the wider range of integration use cases an API could support for your product and validate before you code. 

Consider using an open API standard to help future proof your solution and keep things easy for your customers.  A robust API delivering a great use case can add a ton of value to your user base and open up new and valuable routes to market.

If ever a humble three letter acronym deserved its name in stars, it is the API.

“Tonight Matthew I’m going to be the carrier that can plug into the future”

 Some great further reading about the open API initiative in insurance can be found here: https://openinsurance.io/

DQPro is an API enabled application for Specialty P&C insurers that continuously monitors carrier data to improve underwriting operations, controls and data quality. For more information go to: www.dqpro.com