Driving API adoption in Insurance
The Insurance Perspective
The simple acronym API can be misunderstood in its value because it doesn’t provide any context. APIs are more and more spoken about in insurance but their uses remain unclear for many in the industry.
Effectively, APIs in insurance are the proverbial iceberg. There are many uses underneath the waterline and insurance as a sector is really adopting APIs in a very powerful and in depth way every day. They’re performing all sorts of functions, and delivering all sorts of capabilities, but is the insurance industry maximising the opportunity of APIs?
Whilst APIs are adopted, they’re very much behind the scenes and under the water, and this is about trying to bring them to become more publicly available to be consumed and understood by more within the industry, not outside of pure development. There are many APIs vendors in insurance, but there are arguably not enough API strategies and that’s part of the hindrance to driving greater adoption.
How do we drive adoption? How do we actually get the concepts or the capabilities of APIs passed from the developers to the business or even citizen developers?
- APIs are widely used
- Property characteristics data
- Vehicle data
- Weather alerts
- Geolocation services/asset tracking
- IOT driving greater adoption
- Data augmentation in UX journeys increasing
- Hard to compare APIs and API providers
- Limited value chain integrations
- Expensive model
- One API one vendor
- Few corporate API portals
How do we establish APIs to become these building blocks to drive some innovation?
New propositions are coming and if you take the lens of the insurtech, they are all built with API first in mind. The insurance industry has to start partnering with more organisations to get agility and flexibility, for which APIs are going to be critical. APIs will assist us to adopt new technologies in a business context. We are currently travelling in the right direction but we need to move from code to context and from programming to product.
What does that look like in reality? By changing the language from code to something the industry at large can understand, we can help increase API usage and make it available to more.
The API Perspective
4 key points to drive API adoption:
API Product Management
We need to lean upon the existing product management methodologies that are out there or look at, for example, the APIOps Cycles methodology, which is a product management methodology created specifically for APIs.
Who is your Customer?
When we talk about APIs, we all think developers. But the question really is, who is the customer for you? In the insurance industry, at this point in time, is the developer your customer?
“A customer is someone who pays for your product. A user does not.”
- Maurya, Ash. Running Lean: Iterate from Plan A to a Plan That Works
The app developer is probably not your target customer. The customer is probably one of your existing partners that you integrate with or, when we’re talking about embedded insurance, it could be Tesla or Uber or someone like that who could be a potential customer. Those guys are more on the business side of things than on the developer side of things.
Engage with your Stakeholders
Is there stakeholder alignment for your product? This can be tricky when some organisations are old and used to work in an offline, non-digital way. A lot of product management methodology is about understanding the different types of stakeholder, identifying the most important ones, and making sure that they understand what it is you’re trying to achieve and support you in doing so. If you don’t have the support, you won’t be successful. It’s about finding the people who understand what it means to be API-first, and will help you drive that within the organisation.
Give a great UX / DX
User / developer experience is very important. For a great developer experience, most people are used to Swagger, or open API specs for developers and Stripe offers one of the best DX.
They have like two different experiences if you delve into their product. They have one which is very developer focused and gives the developer what they want at front. But they also have more of a customer marketplace type experience for those guys who don’t have a degree in computer science, but still want to be able to use more of a marketplace approach to consume their resources.
Introducing www.Risk Junction.com
Trying to bring all this together, here is a destination that we launched that is trying to help bring insurers and APIs together. Risk Junction has been launched as a destination to support the adoption of APIs in insurance with those aims in mind:
- Education around APIs
- Driving API discovery within an insurance context
- Promotion of APIs and building upgrades to adoption
Q: There was one point where we said that we didn’t care about insurance as a service, or we didn’t care about insurance products, we should only talk about customer experiences. And then customer experiences can be enabled by an API that provides that capability into the topic. Do you agree with this customer-driven approach where nobody looks for APIs, searching instead for experiences to deliver, and then it happens that there can be an API for that?
Allan: From my perspective, absolutely. You don’t do anything in product management until you have identified a problem that needs solving and you have a value proposition for that. Even at Swisscom, we used to change the name from APIs to VPS, which is Value Proposition Interfaces. This kind of marketplace approach is finding the value in things, identifying problems and searching for solutions.
Q: What about open insurance and the adoption of an open standard interoperability for insurance companies?
Matt: The insurance industry is a broad sector that hasn’t yet suffered the sort of big bang approach that banking had to go through. Whilst the initiatives are worthy and actually the end destination is absolutely critical to get some standardisation across the industry, currently there are sadly too many competing and resistive factors in play. APIs in general and Risk Junction specifically will only benefit from standardisation and open insurance initiatives and the like. As an industry, we have to look left and right to other sectors, and we can see the value that open banking has provided, not only for the industry, but for the industry’s customers. Going back to the solution looking for problems, that’s what the industry needs to focus on, the open insurance presents itself and provides capabilities that APIs will fuel in providing better propositions, better experiences for our broad and varied customers.
Q: Do you have an update about the status of the Open Insurance Initiative?
Matt: The insurance industry is quite fragmented. Although we all talk about insurance, it covers very many genres, there are many actors and organisations. I think the Open Insurance Initiative is starting to speak with regulators, both in the UK and in Europe. That will be a key element to driving on its agenda, and arguably, its agenda is for the benefit of the industry. Whilst there is traction, there’s belief. Like-minded parties involved will move towards being the standard that the insurance industry is looking for. Now, standards do exist, but it doesn’t necessarily mean standards that are aligned to delivering a better customer proposition or customer experience. It has standards for data elements and transactional processing but the Open Insurance Initiative, and some others, work for different standards.
Q: When you talk about API and API products to insurance market companies, are they mature enough to understand?
Allan: Some teams are. We’re starting to get an awakening, starting with one or two people and growing from there. It takes time and it’s about stakeholder management, education and evangelism. We’ve seen from the financial industry that they’re starting to really get some momentum going now and even if insurance is a little behind, it will catch up and Risk Junction is definitely a really good starting point.
“Driving API adoption in Insurance” by Allan Knabe and Matt Carter. Allen Knabe is CEO and cofounder of apiable.io and Matt Carter is founder and CEO of Cognitive Risk.