Insuranceciooutlook

Why is the Insurance Industry Adopting APIs?

By Insurance CIO Outlook | Wednesday, November 27, 2019

APIs are increasingly being touted as the best way for insurance companies to scale the heights of digitalization.

FREMONT, CA: The emergence of new technologies and innovative competitors has made the insurance sector highly competitive. To survive these transformational times, traditional insurance firms have to adapt to evolving markets quickly. Business models, products, and services, as well as customer expectations,  are changing. Application Programming Interfaces (APIs) have come to the rescue of many insurance companies looking to build relevant capabilities on top of the ongoing disruptions. The potential of API in helping insurers navigate the complicated landscape of advanced technologies has received a lot of attention lately, making APIs impactful.

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• Modernization of Legacy Models

APIs have granted insurance companies the chance to leverage third-party offerings that can add value to digitalization easily. Open API ecosystems are increasingly finding favors among insurance companies. Open APIs allow third-party developers to play a significant role in making technological applications scalable and affordable. As a result, insurance products and services evolve, creating new streams of revenue. Thus, the insurance sector is able to leverage third-party expertise to innovate and overcome legacy operations.

• Better Utilization of Operational Data

APIs can improve access to underlying data sources. Without tampering with the integrity of traditionally established systems, insurance companies can generate new streams of data. Integrated data help insurers develop tailor-made products and services for customers. Personalization of insurance offerings is essential for a competitive advantage in today's insurance ecosystem. A wide variety of APIs is helping global firms retrieve customer information so as to make insurance services satisfactory for customers and profitable for providers.

• Integration of Disparate Channels and Solutions

The modern insurance industry leverages a variety of technology-backed offerings to conduct day-to-day business. However, impactful, unless these technologies are not compatible and integrated, it is difficult for insurance companies to achieve efficiency or better ROIs. Here as well, APIs have given insurers a chance to integrate business ecosystems and power seamless back and front-end operations.

For insurance companies, APIs have become the most preferred medium for incorporating digital capabilities and discovering new business opportunities.

 

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