Tag Archives: API

How Automation Adds to Need for Humans

The P&C industry has been on an automation path for many years. When the pandemic hit, it became a catalyst for accelerating automation and digital transformation. Straight-through processing, self-service portals, virtual inspections and digital payments are just a few of the areas that insurers put a sharper focus on. But automating tasks and workflows does not mean that machines will take over and leave industry professionals out in the cold. In fact, the opposite may be true. I believe that a case can be made that automation initiatives will increase the need for skilled professionals with deep industry domain knowledge.

All the automation occurring is good for the industry. And anyone who knows me knows that I am certainly not a Luddite or anti-technology. However, I believe there is one dimension of tech progress in the P&C industry that is being overlooked – skilled individuals. I’ve written extensively about how automation and AI will elevate the role of industry professionals and how relationships are still vital in the industry, especially in commercial lines. But in this blog, I turn my attention to another implication of task automation – the need to manage it. Several examples expose the challenges.

  • Bots: Chatbots to automate interactions, robotic process automation to automate tasks and voice bots to respond to phone calls all take the burden of simple, repeatable tasks away from humans and speed up the process. Bots of these types are sweeping through the industry, and some insurers have deployed thousands. On balance, this is a good thing. Companies are realizing ROI on their investments and improving process flows. But many are now experiencing maintenance headaches. How should the inventory of thousands of bots be managed? What happens when a bot breaks? How are bots updated to comply with the latest regulations? These are important questions that must be addressed.  
  • APIs: It’s an API world. You’ve probably heard that phrase. Even CEOs talk about APIs (application programming interfaces), and, again, it’s a great thing. APIs standardize and improve connections between systems and make integrations faster and easier. After all, integrations and data exchanges between systems have been some of the big challenges for the industry for a long time. But once again, as the number of APIs expands, there emerges a need to manage the hundreds or even thousands of APIs that might be relevant for a given insurer.
  • Models: Rules-based or AI-based models are widespread in P&C, and their number and the variety of use cases continue to expand. Done well, they are helping improve product design, risk selection, pricing, profitability, claims processing and many other parts of the business. Model management is now becoming a discipline in its own right, and there is a need for strategy, governance and hands-on management of the models. And, in the case of models, the most important human contributions are in designing the models to address specific business opportunities, interpreting the models and then taking action.

Over all of this, layer the complexities of the insurance business, the trend toward more specialization and the evolving risk landscape: The picture gets even more complicated. The state-by-state regulation regime in the U.S., coupled with the variations by line, introduce multiple dimensions that must be managed for new tech solutions in automation. As customer risks become more complex (as in middle-market and large commercial accounts, specialty lines and workers’ comp), the intricacies of the business create challenges.

See also: Insurers Turn to Automation

Automation and leveraging AI for insights are good for the P&C insurance industry. But there will still be a need for industry experts who understand how to execute tasks that comply with evolving regulations, who can exercise judgment based on experience and who can manage all the automation activities. Some of that automation management will demand IT experts, but much of it requires an understanding of how business is conducted, the details of different customer segments and insurance products and the requirements imposed by the many regulatory bodies involved.

Will there be increasing levels of straight-through processing, bots and other automation in P&C? Of course! But does this mean that the machines will be in control? I emphatically say no! People and their experience and expertise in the industry will remain at the heart of the business.

Want Some Insurance With That?

Some 25 years after the publication of Nicholas Negroponte’s seminal “Being Digital,” it feels trite to write about how digital capabilities and the expectations they create among customers have transformed even traditionally sleepy industries like insurance. Yet, the digital transformation of insurance is not a narrative of progressive evolution but rather a story of successive and disruptive waves. And we are on the cusp of a third one. 

The first wave saw insurers learn to exploit digital tools to sell directly to customers. Established players as well as a plethora of tech-first startups proved it was possible to sell insurance online to customers without the benefit of an agent. 

The second wave, still in flight, focuses on customer experience, bringing better and easier ways for insurers to process applications, serve customers and pay claims. These efforts have brought new efficiencies to an industry hyper-focused on cost while at the same time addressing the needs of consumers who expect immersive and contextualized digital interactions with all the businesses they patronize.

The third wave, in its infancy, focuses on ecosystems, that is the embedding of insurance within the value chains of other industries. An online world, dedicated to selling us cars, homes, travel experiences and financial services is now discovering the opportunity to bundle insurance with the goods and services they provide. Such bundling addresses customers at the moment of need, at the life event – a new home or car purchase, for example – which triggers the need for insurance protection. Insurance in such a model is, as the title and summary of this article suggest, like French fries, a digital side dish suggested as an add-on to the main course. In the years ahead, we will increasingly see more and more businesses ask the question, “Do you want insurance with that?”

Whose brand is it anyway?

Big Tech has done the spade work for this third wave of transformation. Well before COVID-19, customers were becoming increasingly receptive to the idea of buying insurance from Big Tech firms. And around 44% of the consumers we interviewed as part of Capgemini’s World Insurtech Report 2020 said they would consider coverage offered by Big Tech.

Policyholder willingness to purchase Big Tech coverage is on the rise

Sources: Capgemini Financial Services Analysis, 2020; Capgemini Voice of the Customer Survey ‒ 2016, 2018, and 2020; Capgemini Research Institute, Consumer Behavior Survey 2020.

The fact that Big Tech has earned and retained customers’ trust during various lifestyle interactions is the catalyst behind their increasing willingness to buy insurance, too. Customers say they can count on tech giants for stellar digital experience, intuitive services and real-time response. 

So far, Big Tech has been making slow, yet deliberate, inroads into the insurance space. Google subsidiary Verily announced plans in August 2020 for its own insurance company (backed by the commercial insurance unit of Swiss Re Group) to provide tech-driven employer health insurance plans. Verily has also made a health-tracking smartwatch for research use. Amazon invested in Acko Insurance to offer auto coverage via the India-based startup’s platform. Big Tech firms are also integrating existing products (Apple Watch or Amazon Alexa) into the insurance value chain or developing convenient and time- and money-saving offerings that appeal to a broad range of policyholders.

These findings with respect to Big Tech are consistent, of course, across industries. The erosion of traditional brands in favor of new digital ones has occurred in every sector.

See also: Pioneering Use Cases for IoT in Insurance

Equally important is the extent to which the willingness to buy from Big Tech extends to a broader ecosystem of digital-first businesses. Disruptive industry-specific players, most notably in automotive, are as big a change agent as Big Tech. Buying car insurance from Carvana, home insurance from Zillow or small business insurance from Quickbooks makes all the sense in the world, particularly when these digital behemoths demonstrate the power to use data to make the right offer at the right time at the right price. 

The challenge to the industry to adapt is profound.

What’s an insurer to do?

As Big Tech and other online powerhouses look to turn insurance into the new French fry, insurers must consider the implications of this digital third wave and choose strategies through which they both embrace and differentiate in the new world of embedded insurance.

Most obvious and relevant is the ability to embrace the new channels. Insurers have always relied on third parties for distribution. A shift in mindset to see e-businesses as the agents of the future requires cultural change and paradigm realignment but is not revolutionary from a business model perspective.

The bigger challenge in many respects is on the technology-side. The constraints of legacy systems and brittle enterprise architectures, which shockingly persist 25 years after Negroponte, limit the ability of insurers to plug and play seamlessly in the new ecosystem. Developing an API framework that enables insurers to connect safely and securely with a broad array of distribution partners – what we at Capgemini call Open Insurance – is a prerequisite to being part of the coming disruption and not a victim of it.

Along with the API-ification of insurance technology comes significant requirements to up the game with respect to data. Succeeding in the new ecosystem, as noted above, requires being there at the right time with the right product at the right price. Doing so requires real-time customer insight, which comes from data mastery. We have been slow to get there. Less than 40% of insurers say they have access to IoT devices and natural language processing (NLP) support systems to enable real-time insights. Producing and leveraging analytics at scale will be the battlefield for this third wave of digital.

Not all French fries are created equal

It will, of course, take more to succeed in the new ecosystem than technological advances. 

Competitive differentiation among insurers will need to come from the insurance product itself. In a world where traditional brands have ever-diminishing salience, product and price are the only bases for competition. The standardized products the industry currently offers will force an inexorable race to the bottom, where the cheapest wins. Look for product innovation to be the true benefit of the third digital wave.

See also: Do You Know What You Don’t Know?

The demand is already there. Only some insurers see it.

Incumbent insurance executives interviewed as part of the World Insurance Report 2020 were behind customer expectations regarding new products. Only half of the executives we talked with said they had rolled out usage-based insurance (UBI), such as pay-as-you-drive (PAYD) offerings. Conversely, customers’ year-over-year interest in UBI climbed from 35% in 2019 to more than 50% in 2020. Less than half of the insurers we interviewed said they effectively target promotions at critical life-phase moments, and fewer than 25% said they use artificial intelligence systems to track external data.

The challenges to insurance product innovation are not trivial. Complex regulatory regimes create significant hurdles, making almost impossible the “fail fast” mindset that drives innovation in other sectors. But the challenge for insurers is indeed existential. As the aficionados of one or another fast-food empire will attest, the fries may be a side dish, but they are often the best part of the meal. Insurance should learn from this example.

The Word of the Year Is…’Ecosystems’

I hesitate to make predictions about 2021. Those for 2020 didn’t work out so well for any of us, right? And 2021 is already off to a rocky start, with the pandemic still killing thousands a day (just in the U.S.), with the ever-so-promising vaccines being rolled out ham-handedly and with political dysfunction in Washington, DC, reaching fever pitch.

But I’ll still hazard a guess and say that one of the biggest, if not the biggest, themes of 2021 in insurance will be ecosystems. We may be well into the year before we see the effects. The pandemic — and perhaps the nutty politics in the U.S. — won’t release its grip for a good while yet. But ecosystems should produce key changes in two areas: how we touch customers and how we organize internal processes.

A friend wrote a book years ago that included a line that has stuck with me: “Nobody is as smart as everybody.” That ethic explains a lot of the power of ecosystems: Nobody individually is as powerful as everybody working together.

We’ve already published quite a bit on ecosystems, including the two articles at the top of the six I highlight below, and will publish much more, but I’ll summarize here what I see as the two biggest opportunities.

The first relates to sales. Traditionally, insurers have sold products through expert sales forces. But that has typically meant that a customer has to walk into that Allstate office in a strip mall and speak to an agent or that that Allstate agent sponsors a local kids soccer team, becomes known in the community and gradually meets and grooms prospects. But digitization — accelerated greatly because the pandemic has forced us all to deal with each other remotely — allows for serving customers in a more natural way, by meeting them in their moment of need.

Digitization allows for bundling car insurance with the purchase of a car, or home insurance with the purchase of a home. A home buyer is already dealing with a mortgage broker or banker, who can digitally provide options for insurance at the moment when someone is actually motivated to buy it. You don’t have to fill out any more forms — the bank has already done a colonoscopy on your finances and can auto-fill whatever the insurer needs on you or on the home. You don’t have to drive to an office, and the agent doesn’t have to spend weekends schmoozing soccer moms and dads.

Life insurance, usually such a tough sell, can become a routine part of interactions with financial advisers, even being initiated by the growing assortment of robo-advisers. Shipping insurance can be bundled with shipping contracts. And so on.

Plenty of effort will be required for an insurer to bring banks, car dealers, financial advisers, etc. into their ecosystems. Lots of coordination will be required, too, to make sure that everyone’s IT systems play nice with each other. Regulators will also have their say, to make sure no one is tilting the playing field unfairly, especially if customers are somehow being put at a disadvantage.

But it’s inevitable that digitization will push the initial contact with customers well beyond the walls of individual insurers and their agents and will require building an ecosystem. Some years ago, when a colleague and I wrote a book based on a massive research project into what can be learned from corporate failures (called “Billion Dollar Lessons,” if you must know), we decided that the only successful synergy strategy for sales was, “Do you want fries with that?” Well, I think there will soon be a whole lot of folks in non-insurance fields asking, “Do you want some insurance with that?”

The second opportunity for ecosystems is even more fundamental, because it allows for rethinking the whole organizing principle of major parts of a business and, eventually, the entire business.

Historically, big insurers have been closed systems. They have their sales force, their underwriting teams, their actuaries, their claims organization, etc., all down the line, all operating within one set of walls. But what if an organization were more like a piece of software and could be organized as an open ecosystem, so the organization didn’t have to do everything itself and could incorporate a continual stream of innovations, whether from inside or outside the organization?

That ecosystem sort of approach is how apps work on your phone. There’s some core piece that a team has written, but the team incorporates bits of software, called “objects,” that handle the rest. Why write your own calculator when someone has already done one? Why write all that code that expresses your app on the phone’s screen when someone has already written code you can rent?

The key is what’s called the application programming interface (API) — you and the others in the ecosystem have to specify exactly how your piece will accept data and will export data. (The coordination piece is so key that Plaid, a startup that lets apps connect to users’ bank accounts, has an agreement to be acquired for $5.3 billion by Visa.) Once you’ve specified the API, you can do anything you want as long as you don’t change it. You can improve your piece. You can decide, say, to swap out the calculator you were using and swap in a better one. Whatever.

Now imagine being able to apply that sort of model to an organization. What if your business were so modular that, finding out that your adjusters were best-in-class, you could sell their services to others, connecting easily and instantly through an API? What if the reverse were true, and you wanted to draw on some other company’s adjuster module?

Something that fundamental is unlikely to happen soon, if only because companies see a skill like underwriting as a core competitive advantage and won’t want to share. But I suspect we’ll start to see more processes conceived as modular, to great effect.

Jamie Yoder, an old colleague of mine who is now president of Snapsheet, which provides claims automation services, offered an interesting way of thinking about ecosystems. He said the claim has to be “the captain of the process.” In other words, rather than thinking about a traditional flow, in terms of how information comes in, how it gets passed from person to person, how approvals are done and how payment is made, you use artificial intelligence to give authority to the claim. It “knows” what needs to be done and can send out queries, whether to information systems or to humans (the client involved in a car accident, an adjuster, whomever), to move things along much faster and more efficiently than happens with today’s games of phone tag and all those files sitting in in-boxes until a case reaches the top of a to-do list.

The key is the APIs: That claim needs the information in exactly the form it can handle. So there will need to be a lot of initial coordination, requiring considerable human intervention early on. But once all parties agree, for instance, on how the details on a crash and on insurance coverage will be presented and agree on how authorizations for payment will be exported, then the process becomes an ecosystem. Any piece can be swapped out if a better option comes along, with no disruption to the other pieces, creating the opportunity for what Jamie calls a “flywheel” of innovation. (If you want more, Jamie and his fellow panelists at the International Insurance Society’s annual meeting said a lot of other smart things about modularity and innovation in a Six Things I wrote on Dec. 14.)

As I say, reconceiving even processes based on a modular, API sort of view of the world will take time. But I do think we’ll see considerable progress this year, and I expect to hear a lot of the insurance version of, “Do you want fries with that?”

Here’s hoping we get through these next several rough months and can make some real progress on ecosystems in 2021.

Happy New Year!

Stay safe.

Paul

P.S. Here are the six articles I’d like to highlight from over the holidays:

Big Opportunities in Insurance Ecosystems

Today, insurers succeed by offering products. In the future, insurers will win by providing access to risk prevention and assistance services.

Designing a Digital Insurance Ecosystem

Insurers should emulate Uber, which has an ecosystem of 2,200 microservices. Here are three ways ecosystems provide a competitive edge.

Who Will Buy Direct and Why?

The question for insurers is how they want to address a growing desire by small businesses to purchase online.

Telematics Consumers Are Ready to Roll

Telematics solutions let customers leverage their driving data’s potential to enable discounts and operational savings.

Banishing Busywork: Recruit the Robots

Bots help combat productivity drains that deplete resources and allow employees to focus their time on higher-priority tasks.

How to Leverage Behavioral Science

Coupled with tech advances that improve risk assessment, behavioral science could be the silver bullet in a period of strain from the pandemic.

Lasting Impact of Plaid’s Innovation

Six months ago, Visa acquired Plaid for a cool $5.5 billion, instantly making the fintech company a legend among technology startups – and its founders, investors and early employees very rich.

While the money is fun to consider, it’s not my key takeaway about Plaid, whose software provides the plumbing that lets startups connect to users’ bank accounts and has been employed by peer-to-peer payment app Venmo, mobile investing app Robinhood and many others.

As the CTO of a startup – one developing a technology platform for insurance carriers – I’m finding the real topic of conversation among my peers, as well as among my company’s investors, partners and prospects, is Plaid’s technology approach and its ramifications.

Plaid’s decision to focus on application programming interface (API) development vs. application development is a natural starting point for such a discussion. (The main point being that Plaid didn’t set out to build all the financial apps itself; instead, it provided a key interface that others, like Venmo and Robinhood, could exploit.) But there’s more to the story. And while it has already become fashionable to describe certain companies as “the Plaid of (fill in the industry),” I don’t think Plaid will be remembered as the face that launched a thousand API ships.

Not to say that the “API-ification” of the enterprise isn’t upon us. We’re seeing it in insurance and more broadly across financial services, as more processes within and across companies plug into each other via these software interfaces. But that trend started before, and is bigger than, Plaid. Conversely, Plaid’s significance extends beyond its APIs.

So what then can Plaid teach us? What can startups, and the technologists helping build them, learn from this early 2020 success story and carry forward into the young decade?

Here are four key takeaways:

1. Empower Builders

Any time a company develops a technology that makes it possible for others to do something they couldn’t do before, that company has the makings of a hit. Many companies succumb to the temptation of trying to own too much of that innovation’s value rather than putting some of that value creation into the hands of others.

Consider Google Maps. Prior to Google Maps, it wasn’t easy for a company to build a dynamic map into its customer experiences. Yet with the Google release, retailers could put all their locations into their web experience so consumers could find them without having to go to a specialized third party service. Now dynamic maps are an integral part of an array of experiences from retail and restaurants to real estate and travel.

If Google Maps had insisted on being the destination of all things maps, i.e., “Find My Retailer,” “Find My ATM,” “Find My Restaurant,” etc., and owning the entire value proposition, the proliferation of map-enhanced experiences across the internet would not have been as quick or as pervasive.

Even a company of Google’s size recognized that that approach would have put the burden of application-layer innovation on one company, one set of developers and one team of product managers. Instead, Google famously developed dynamic maps to be an embeddable component that can fit into any other application, enabling a variety of developers to innovate for their particular markets and end-users.

That’s something Plaid got right. In developing its APIs, Plaid unlocked banking data that had never been available and usable before, but the company was smart enough to keep the focus there and let others – Venmo, for instance – innovate at the application layer. Plaid’s approach brings so many more companies into the innovation mix, which in turn spurs more A/B testing, ultimately yielding more robust and varied applications – the true benefit of best of breed.

2. Love Your Hacks

Plaid did a lot of things that business school won’t teach you. One of them was embracing the hack. Experience has shown that many of the most successful tech companies have used hacks to get their businesses off the ground and deliver their first positive results. Airbnb and Uber come immediately to mind, and so does Plaid.

This is important, because banks were never in the business of exposing their data in a clean way – they didn’t have nice open APIs with clean documentation. That meant that Plaid had to crack the code on its own, figuring it out for itself every step of the way. How do we get access to Bank of America data? to Chase? to the next big bank?….

The moral of the story is they did it. Sure, initially they did it with workarounds and solutions that were laughed at on forums and dismissed as insecure. But they stuck with it and built big enough engineering and data teams to make the company, its approach and its solutions sustainable over time.

But first came the hack. Before becoming sustainable, before scalability even enters the equation, Plaid was getting its hands dirty showing the value of its work, no matter how unsustainable the approach. In this regard, I see Plaid as embodying Paul Graham’s famous admonition to startups: “Do things that don’t scale.” I would just add: “until they do.”

3. Trust the Size of Your Market (and the Defensibility of Your Solution)

Technologists and entrepreneurs have to develop thick skins. We hear “no” more than “yes,” and often find ourselves answering the same questions: What is the size of your market? How are you going to monetize your innovation? How defensible is your solution?

Here, I have to tip my hat to Plaid. As a trailblazer, the company had to argue for a big market that didn’t exist yet, because no one else was monetizing access to financial data – and the generation of apps that would use that data so successfully had yet to be created.

Of course, Plaid was right. Other companies would use its APIs and multiply their value many times over. But before Plaid was right, it believed. The size of its conviction ultimately enabled it to create and fuel a multibillion-dollar market. And while it believed, it minded its knitting, focusing intently on innovating and letting great software speak for itself.

Did that answer investors’ initial questions about defensibility? At first, probably not, but as the number of successful hacks mounted, and as it became clear that the problem it was trying to solve was sufficiently complex and the competitive landscape it inhabited sparsely populated,  the company earned enough breathing room to deliver each successive, successful result. By 2018, Visa and Mastercard were in on the company’s $250 million raise, and the rest is history.

See also: Insurance Innovation — Alive and Kicking

Getting there took some swagger, perhaps even a little arrogance, that Plaid could solve something no one else had dared attempt. That attitude may have been its best line of defense.

4. Guillotine Your Platform!

As I mentioned, the temptation to try to do too much, to own all the value and innovation at every layer of a solution, can be fatal, and is something Plaid brilliantly avoided. Plaid will be remembered for focusing on APIs and powerful administrative functionality, leaving the user interface (UI) and user experience (UX) layers for others to perfect and deploy.

In this case, Plaid serves as a powerful example for the many “platform” developers across the startup landscape, mine included. Platform developers want to solve it all, but Plaid is helping us not to. They deliberately chose not to provide the full vertical experience of their service, leaving it up to developers outside their company to figure things out for themselves and provide their customers their own distinct experiences.

This “headless” platform model is quickly gaining traction among startups and other solution providers, as well as among big companies hoping to accelerate or complete their digital transformations. These companies don’t want their tech providers to own any portion of the customer’s journey and experience; they just want the value, and they want it expressed natively within their own digital footprint.

That shift, and tech startups’ ability to deliver on it, may be Plaid’s most lasting legacy.

5 Reasons to Stress API Integration

Historically, most independent insurance agencies have been slow to adopt new technologies, instead relying on their personal service to clients to differentiate themselves in the market. While it’s true that trusting an agent who has your security, protection and best interests at heart is a huge part of what makes the independent agent extremely valuable, customer expectations are shifting.

Modern consumers embrace a digital-first environment. They expect high-end technology and automation to support their shopping, entertainment and banking needs, and insurance quickly joined that list. About five years ago, buoyed by strong capital investment and a surge in insurtech startups, direct-to-consumer personal lines disrupted the industry by bypassing the advisory and guidance upon which the independent agent model was built. Now, it’s the commercial industry’s turn, as we begin to see similar evolution in distribution models on that side.

To remain relevant, independent agents must keep pace with the changing landscape of consumer behavior and the technological demand. Customer experience is more important than ever. When it comes to attracting and retaining clients, and delivering on expectations for speed, it’s critical to be efficient and digital.

API solution integration has become one of the most crucial components of digitization, enabling smoother workflows and increased efficiency and allowing agents to meet customer expectations for real-time, personalized service. By providing a framework for connectivity, application programming interface (API) protocols allow various pieces of software to interact, to share data, and to move data and tasks from one step of a process to the next. For independent agents and the entire value chain that supports them, APIs are game-changing. They give agents the combination of the digital-first approach customers expect, with personal attention and dependable service.

Here’s why APIs are transforming the industry for agencies, customers and insurtech providers.

APIs improve office workflow. As in every business, productivity and efficiency are critical in any agency. The ability to complete tasks faster, to save time and effort, not only means less work but also frees up more time for agents and customer service reps to spend collaborating with clients to better understand their needs. With something as simple as writing an auto policy, an agent may start and end the process in two pieces of software — first in the agency management system (AMS) and then in the underwriting system. This requires the agent to toggle back and forth, rekey data and perhaps even hand off the process to another individual. With API integration, the data is entered once, moves through the entire process with an electronic handoff from one system to the next, and can even be picked up by a second individual seamlessly. By cutting down on time and frustration, employees can spend their time on more productive, revenue-generating efforts.

See also: AI Still Needs Business Expertise  

APIs reduce data entry burden. The problem with lack of integration in most agencies is that it requires redundant data entry. And, each time customer data is entered increases the risk of error and inconsistency. For example, if a CSR enters client Amy Smith Jones’ name into the AMS with no hyphen, but the agent enters it into another system with a hyphen, there are two separate records for the same customer. Now, it’s impossible to see the client’s entire account, and there may be duplicate mailings and other communication breakdowns. With API integration, data is entered once — eliminating the time wasted in redundancy, reducing the risk of data entry errors and ensuring data consistency.

APIs improve customer relations and retention. Insurance customers expect personalized service and attention. So, when they call the agency for help, they expect that their agent is familiar with their policies and situation. But, in many agencies, simply handling an incoming call is a lengthy process. An operator answers the phone and determines how to route the call, and then the agent must ask some questions to find out how he or she can be of service. With an API integration between the phone system and the AMS, the handoff happens seamlessly. When the customer dials in, the system uses reverse phone number lookup to identify the caller and pops up the customer’s policies on the operator’s computer screen and which agent handles them. Now, the operator can greet the client personally and transfer the call quickly. When the agent answers, they already have information about the client’s account and can immediately ask whether the call is regarding the homeowners or auto policy. This is just one example of how an API-enabled, streamlined system not only eliminates extra steps but also provides the personalized customer experience that clients expect from their agency.

APIs demonstrate your digital prowess. As we’ve already established, consumers expect a certain level of modern, digital automation in practically every aspect of their lives. Using APIs to connect digital technologies gives your agency the forward-thinking image that attracts customers who value that quality. For example, even something as simple as mobile document signing technology that integrates directly with your agency management and underwriting solutions can streamline the process for clients. They can log in from wherever and whenever on their mobile device, sign as required and keep the process moving. Even with the personal service an independent agency strives to provide, there will still be clients who prefer less human interaction and a more digital approach, and APIs allow agencies to retain those clients while still addressing their automation expectations.

APIs allow tech providers to remain relevant. There are many solutions in the insurtech industry that solve a niche problem — fillable forms for commercial line submissions, for example, or digital signature solutions. Even some of the larger AMS platforms don’t address every aspect of agency workflow, and many depend on complementary software to fill those gaps. API integrations allow the entire insurtech industry, especially point solutions, to thrive by continuing to provide value in the larger scheme. For the larger platform providers, this saves time and money in developing those features and allows the smaller niche players to remain relevant.

See also: Growing Import of ‘Edge Computing’  

API integrations clearly benefit the entire insurance value chain, from carriers, underwriters and agencies to insurtech providers and consumers. The alternative — continuing to operate with proprietary systems that don’t adhere to industry standards, perpetuating inefficiencies and detracting from the customer experience — will keep the industry stuck in the dark ages and ripe for disruption by new solutions that radically transform the process and the customer experience.

Programs such as Vertafore’s Orange Partner Program are just one example of API programs creating a new model for the industry, enabling rich integrations that empower independent agencies to leverage a broad spectrum of solutions, not only within the platform’s ecosystem but also with a wide range of third-party providers. This type of open API approach ensures both technological consistency through integration standards and allows the entire industry to evolve and grow, while providing a more satisfactory experience for customers.