APIs: What They Are and Their Role in Insurance Business Systems

With insurance technology daily advancements, APIs are becoming the central topic of future-proofing policy administration system (PAS) processes while driving system efficiency for insurance carriers. While we have all heard now painfully-familiar API acronym, some of us are still not quite clear on what it actually is. While the developers might scoff at the notion that the concept of APIs needs further explanation, we believe that the API users – underwriters, business leaders, actuaries, claims processors, and adjustors – might benefit from learning more on how APIs empower policy administration systems. A better understanding of what APIs are and how they work can also open new   conversations   between   business stakeholders looking for new opportunities and operational efficiencies and   the technical staff tasked with optimizing and improving legacy systems and overall organizational compute infrastructure to make it future-ready.

In debating what metaphors might be applicable to better describe the concept of an API, we realized that none were perfect and completely accurate to reflect the highly unique value proposition delivered by APIs. However, we decided to allow ourselves the liberty to use the simplest concepts to make this an easy read. To start with the simplest metaphor, think about the web and the plethora of websites that we all use daily. There is a vast technical infrastructure behind these websites that connects what we see on the screen with the technical back-end that supplies the data flow between the remote data depository and the user. So, if one were to input a search term into any web browser, APIs would be the highways that such query would travel through to the central database that has an answer to any specific question. Once such an answer has been retrieved from the information depository, it would travel back to the user through the same highway and show up on one’s computer screen as a search result (or results). This entire process happens in the matter of seconds, making APIs the fastest highways in the world. The speed limits on these highways are determined by the technological and agile capacities of the provider.

Another way to think about APIs is how humans have traditionally consumed digital data output. For decades, most computer data programs – image editing software, data processing software, etc. – were focused around delivering a certain output to a human user. These humans didn’t need to know what was happening behind the scenes of the software as long as the final product sufficed the needs of the user who consumed it.  The software experience had to be easy, convenient, expedient, and enjoyable.

In the age of APIs, the focus from the human consumer at the end of the chain got shifted to another piece of data-consuming software that would receive the data to be further processed and used for organizational IT infrastructure needs. In this case, the experience doesn’t need to be enjoyable, as it had to be with a human consumer, but it is still required to be easy, functional, and, most importantly, fast.

Enter, application programming interfaces, or APIs.

Programmable Web described APIs as follows: “An API is very much the same thing as a UI, except that it is geared for consumption by software instead of humans. This is why APIs are often explained in the mainstream media as a technology that allows applications (software programs) to talk to one another. In this context, the terms “software,” “applications,” “machines” and “computers” are virtually interchangeable. For example, APIs are often discussed as being machine-readable interfaces (versus human-readable)”.

We live and work in an era of increasing connectivity, where data is becoming a big­ger part of our everyday lives. Application program interfaces (APIs), the snippets of code that allow software applications to interact in a common language, are ever more present in the everyday consum­er and business environments alike. Web APIs are an especially useful variant that allows businesses to access data produced by other 3rd party companies and seam­lessly integrate it anywhere and anytime it’s required. APIs have transformed the way businesses interact with each other and the way they provide value to their customers. APIs power today’s technological world, as well as the  multiple business systems that data lives in. An IT infrastructure of any data-consuming business would be impossible without APIs, therefore their significance should not be underestimated.

Starting in about 2005, (the same year that Price Digests launched its first vehicle data API), the profound interest   in APIs laid the foundation to the phenomena known as the API economy. APIs grant access to a wide variety of resources and allow for cross-platform communication within a business. For example, APIs power the connection between the insurance PAS and a database with vehicle values and specs necessary to un-derwrite a policy for a commercial truck or a passenger auto. Alternatively, let’s consider the pro-cess of signing policy documents. While twenty years ago, all policy documents were sent through the mail with a longer turn-around time; today signing a document only takes a few clicks thanks to the introduction of e-signature products powered by APIs.

Simplicity:

APIs allow for a single instance of data creation to be automatically distributed externally to customers and internally to coworkers, rather than reproducing work when and as needed. Simplicity is the keyword here. Rather than struggling to format a large file in a spreadsheet pro-gram to extract a marginal amount of information, an API can provide the data needed without requiring extra research or manipulation.

Efficiency:

Consuming an API maintained by a 3rd party can also substantially reduce the labor requirements for IT departments. By handling many background tasks and running continuous maintenance, the use of third-party API providers can reduce the number of employees needed to perform web-centric information gathering and compu-tation tasks. Integrating APIs allows a company to outsource parts of the business process for a fraction of the cost of building the same in-house capabilities. Efficiency goes together with the benefit of workflow optimization and system and process automation. Within the property and casualty insurance segment, the need to access a large asset database can be streamlined through integrating asset data through APIs. In many cases, coupling a well-designed API with batch processing analytical methods can even open new channels for business devel­opment and financial growth, such as creating a data-driven business product or producing market intel­ligence or consulting work. Such methods are especially favorable for older and well-established com­panies with a significant amount of historical data that provides valu­able intelligence.

Customization

Enterprise applications have also greatly benefited from the in­creased capacity for APIs. While their software was once produced individually and formatted to fit each customer’s needs, web APIs have allowed enterprise develop­ers to deploy their central platform alongside APIs for customers’ use.

Additionally, while consumer prod­ucts may need to have offline capa­bilities, enterprise software is rarely disconnected from a network. This eliminates the risk of losing data transfer during periods of low con­nectivity. These advances have re­sulted in more efficient enterprise software and reduced costs for customers.

Amongst other API integration benefits are the options for mo­bile development, partnering and partner onboarding opportuni­ties, decrease in time to market for new products, addressing competitive pressures to keep up with the market trends, com­pliance with regulatory require­ments, and business positioning for the future through a focus on innovation.

At Price Digests we believe in the power of information and data-driven decisions. We believe in business solutions that are efficient, comprehensive in scope, intuitive and easy to use. Since our inception in 1911, we have learnt from experi­ence that one size does not fit all. So, we tailor our products to our customer needs with flexible delivery formats from web application, API, flat files to custom reports, data cleansing, and consulting. Our VIN-driven API solutions for the Com­mercial Auto insurance carriers allow users to standardize their book of business, improve policy and claims process ef­ficiency with a VIN return rate up to 99.5% for model years 1981 to current. Our APIs integrate with multiple third party In­surtech platforms while offering coverage for all vehicle types. On the technological side, the Price Digests APIs are RESTful JSON-based with continuous updates and improvements to deliver technological agility. Focused on data security, the Price Digests APIs provide secure communications protocols on the AWS platform. With a dedicated integration team and a continuous live support, Price Digests has been known as the VIN API market leader for insurance, finance, government, and dealer industries. party companies and seam­lessly integrate it anywhere and anytime it’s required. APIs have transformed the way businesses interact with each other and the way they provide value to their customers.

Nadia Davis
Brand Marketing Manager

Price Digests
Asset Intelligence
Infrastructure intelligence | informa