The evolution of the Insurance Industry is moving quickly from older, disconnected
systems to digitally connected ecosystems where the flow of information is
instantaneous, from core platforms through partners, all the way down through to
customer-facing channels. Insurers are increasingly turning toward specialized
insurance software development services that utilize API-first architecture, modular
design, and secure integration as part of their infrastructure to help them make this
transition. Insurers can use well-designed APIs to streamline processes, support real-
time decision making, and provide seamless digital experiences for policyholders,
agents, and partners alike.
What Are APIs in Insurance Software Development?
APIs in the health insurance software development industry provide a standardised
interface for one system, application or service to talk to or exchange data with another
in a secure and structured manner. Rather than hard code a point-to-point integration,
insurers instead use APIs as reusable building blocks to expose specific functionality
(i.e., quote generation, policy lookup, payment processing, claim submission) to other
internal and external partners.
Why API Integrations Matter in Insurance?
In order to achieve this in the traditional silo of an insurance company, API integration
will provide the connectivity needed to connect traditionally siloed departments as well
as previously non-connected departments.
● It used to be the case that each of the following departments – policy, claims,
billing and CRM – operated independently of each other. This created problems
with duplicate data entry and inconsistencies with data. By using APIs, these
departments can share information with one another in near real time, thereby
providing a complete view of all customers, policies and transactions without the
necessity of redesigning or rebuilding each department from the ground up.
● In addition, APIs provide the ability for insurers to exchange data with other
companies in real-time. For example, when an insurer needs a credit report,
telematics data or KYC information, they are able to retrieve the information from
their internal platform to an external service at lightning speed.
Key Use Cases of API Integrations in Insurance
- Policy Administration & Lifecycle Management
Insurance operation policy administration is vital to its operations, and Application
programming interfaces (API) allow the core policy administration system (PAS) to
interact successfully with surrounding applications.
● Policy Administration System and Customer Records Management (CRM),
including billing and underwriting tools – using APIs allows for easy data
exchange between PAS and customer records (CRM) for customer details, billing
system(s) with the status of premiums, and underwriting tools to manage risk
and make decisions. In addition, this reduces human editing; improving the
accuracy of the data provided to each team. All teams are able to operate off of
the same data.
● APIs also provide real-time policy updates and automate notifications. Upon
creating, endorsing, renewing, and/or canceling a policy, APIs send an update to
the app/system responsible for managing the customer, as well as notifying the
agent of any changes being made, or when they occur. This minimizes errors and
provides timely and accurate information to the customer and stakeholders
throughout the entire lifecycle of the policy. - Underwriting & Risk Assessment
Insurance operation policy administration is vital to its operations, and Application
programming interfaces (API) allow the core policy administration system (PAS) to
interact successfully with surrounding applications.
● Policy Administration System and Customer Records Management (CRM),
including billing and underwriting tools – using APIs allows for easy data
exchange between PAS and customer records (CRM) for customer details, billing
system(s) with the status of premiums, and underwriting tools to manage risk
and make decisions. In addition, this reduces human editing; improving the
accuracy of the data provided to each team. All teams are able to operate off of
the same data.
● APIs also provide real-time policy updates and automate notifications. Upon
creating, endorsing, renewing, and/or canceling a policy, APIs send an update to
the app/system responsible for managing the customer, as well as notifying the
agent of any changes being made, or when they occur. This minimizes errors and
provides timely and accurate information to the customer and stakeholders
throughout the entire lifecycle of the policy.
- Claims Management
The process of submitting claims is a data driven process that collects a significant
amount of data from external sources, so it is an ideal candidate for automation using
APIs.
● Submitting FNOL through APIs enables consumers to send a complete FNOL
through a number of channels including through mobile apps, partner portals,
third-party administrator systems (TPAs) and Internet of Things devices. Each of
these systems is connected to the FNOL database via standardised APIs
providing timely and efficient electronic intake of FNOLs and eliminating the need
for duplicate entries of the same FNOL into multiple FNOL databases.
● Image Recognition, Drone Data, and Inspection APIs: Claims platforms such as
FNOL can be integrated with third-party image recognition services, drone
inspection service providers and remote inspection tools. Claim images and
videos can be captured through these systems and analysed, generating
automated reports on the level of damage and triage recommendations.
● PI-based Automatic Claim Approvals and Payments: For a select group of simple
claims, the APIs connecting claims processing rules engines, payment gateways
and payment processing banks to FNOL systems to automate approvals and
payments to customers greatly enhances the customer experience and
decreases the overall costs associated with the processing of low-complexity
claims. - Billing, Payments & Finance
● Integration of Payment Gateway: APIs connect insurers with many payment
gateways, covering credit/debit cards, net banking, e-wallets, UPI, and other local
payment methods. The flexibility to select the payment method allows insurers
to meet varying customer needs and geographic requirements.
● Automatic Collection of Premiums: In addition, using APIs for automatic
premium billing allows insurers to set up routine premium payments via debits,
determine if a payment has been initiated, and confirm if payment was
transmitted to their financial system.
● Digital Payment & Wallets: Finally, APIs will allow insurers to create digital
payment experiences within mobile apps, enabling in-app and wallet payment
features, as well as subscription-style premium models.
- Customer Self-Service Portals & Mobile Apps
Using APIs to display core-system functions through an intuitive user interface is the
foundation for digital self-service.
● Real-time Policy Information Access: Customer portals and mobile applications
are able to access real-time updates to Policy Information (e.g. Policy Details,
Coverage Limits, Premium Status, Documents, Upcoming Renewal Dates, etc.)
via an API connection with our back office, providing customers with accurate
and up-to-date Policy Information.
● API-Driven Claims Tracking: Using APIs, customers are able to view their Claim
Status, Required Documents, Appointments, and Payment Timelines. - Fraud Detection & Compliance
External data is relied upon by Risk and Compliance functions through the use of
specialised applications through Application Programming Interfaces (API’s):
● API’s that support Identity Verification (KYC/AML) includes API’s that allow
Insurers to connect to Identity Verification Services and Anti-Money Laundering
(AML) screening services, validate a customer’s identity, check for existing or
potential risks on government watch lists and comply with all KYC/AML
regulations at the point of customer onboarding and any high-risk transactions.
● API’s that support Fraud Detection Engine(s) allow for the embedding of Fraud
Analytics (FA) platforms within claims and underwriting processes or workflows.
The relevant information is fed from a transactional event into the fraud engine
which returns a risk score or recommendation for an
approval/denial/flagging/routing for further investigation.
● APIs improve the process of submitting reports to Regulators, Data Repositories
and/or Supervisory Bodies by automatically preparing and sending the required
Data Sets in a compliant manner, significantly reducing the amount of human
dependency for those submissions as well as improving accuracy. - Partner & Distribution Integrations
Modern distribution strategies emphasise the connection between ecosystems and
embedded insurance (EI) as their most dominant form
● Quote & Bind Insurance Platform Application Programming Interfaces (APIs): It
allow the agents to quote, bind, and service policies through an integrated
insurance portal; alternatively, aggregator platforms can obtain multi-carrier
quotations from a single API access point using rating APIs to increase the
speed and accuracy of the quotation process.
● Embedded API technology also enables retailers, travel platforms, fintech
companies and mobility Apps to integrate their insurance offerings directly into
their customer journeys.
● Multiple distribution channels, including direct, agency, bancassurance,
embedded and InsurTech partners, can access the same embedded insurance
API layer; therefore, providing customers with consistent rules and pricing
regardless of where or how they purchase their insurance products.
Core Benefits of API Integrations for Insurers
By adopting a strategic approach to API integration, Organizations will experience both
operational and strategic benefits.
● Operational Efficiency: Automated Data Flows, through fewer manual touch
points, reduction of re-keying and faster turn-around times for processing
policies, claims, billings, and services, provide the operational efficiency of an
Organisation.
● Decreased Manual Work and Faster Processing: Automating processes reduces
the number of ad hoc imports, spreadsheets, and emails while allowing Teams
the ability to focus on exceptions and high value tasks rather than routine data
entry.
● Faster Product Development and Time-to-Market: An API-First approach enables
Insurers to quickly connect to new functionalities, partners, and data providers.
Building new products can be accomplished by combining existing services
instead of starting from scratch.
● Easier Co-Creation with Insurtech Partners: through open and properly
documented APIs Insurers can easily partner and work with Insurtech, MGAs,
TPAs and Solution Providers, accelerating innovation and experimentation while
maintaining governance.
Final Thoughts
Integrating APIs has become a key part of the changing model for developing insurance
software; it has enabled insurance carriers to utilize the full value of their information;
interact with the growing ecosystem of companies that are involved in the business;
and create the seamless, digitally-based experiences for today’s customer. Many
organizations that want to be able to implement this strategy will partner with a Custom
Software Development company that has experience in the complexity of the insurance
industry, the latest integration methods, as well as all the concerns surrounding security
and compliance. By developing a comprehensive strategy and selecting the right
technology partner, insurers will be able to turn their traditional systems into
interconnected platforms that drive agile, scalable, and future-ready business
operations.
