How APIs are reshaping the insurance business
Insurance companies can now integrate applications and create new services more easily than was possible before.
Today, it is almost certainly an understatement to say that application programming interfaces (APIs) are transforming the way business software is used in the insurance industry and beyond.
Making new or additional functionality available via APIs changes the way software and information is delivered, while also creating efficiencies, increasing productivity and reducing the cost of system or solution integrations.
The business benefits of APIs
The evergreen argument about whether it was better to invest in suite or best-of-breed solutions was once primarily driven by the size of the company doing the buying. Smaller companies typically lacked the budget and internal expertise to properly integrate solutions from third-party vendors or to have an enterprise service bus (ESB) created to do the job through custom development. APIs have levelled the playing field by making complex integrations accessible to insurance organizations of any size.
There are obvious benefits to exposing APIs as business building blocks for third-party applications and services. APIs are the way modern software is securely integrating cloud and on-premise (on-prem) systems to share data, authenticate information, enable transactions, access algorithms, and create new products, services, and business models.
Apart from integrating on-prem software to the cloud, employing APIs in modern software development, makes it easier to maintain smaller, function-based software components or microservices with developers or teams assuming responsibility for a specific component and tapping into domain-specific expertise. For smaller companies, this is a game-changing capability which enables scale that was never possible before.
APIs enable developers to build products and services more quickly and easily and focus on business issues rather than getting overwhelmed by technical ones. Using APIs allows businesses to unify data across multiple communication platforms, and in so doing, bring products and features to market faster, without having to commit large amounts of time and resources.
Insurance is a data-driven industry, and competitiveness in the 21st century is driven by getting the right data, to the right person at the right time. By using APIs, a company can make its ability to integrate applications and data a competitive advantage.
APIs are transforming coding
With access to APIs, programmers can now deliver new applications using existing resources. Programmers can use APIs to create integrations that enable applications to share data more quickly and easily. The use of APIs reducing some of the burden of that once fell on internal IT teams. In the process, however, another potential problem can arise.
Consider the rising popularity of APIs and how many potential integrations exist within a single insurance organization’s technology infrastructure. The now prolific nature of APIs means there is a management issue in play that must be handled from inception to use and from revision through to retirement.
Gartner recommends that API governance is given serious attention, and insurance organizations should immediately take steps to:
- Inventory and document all published APIs;
- Use available tools to protect APIs;
- Make security a part of the API development lifecycle, including policies to eliminate the most common API problems; and
- Control how APIs are accessed within the business, not just at the edge.
Improving API management
To ensure proper management over the way APIs integrate applications, share data, and data is accessed via said APIs, a cloud-based, hybrid integration platform (HIP) provides a distinct advantage over manual API management. A HIP delivers a development environment that includes a centralized place to create, maintain, and manage APIs and performance.
And, instead of the traditional hub-and-spoke model, a cloud-based integration platform, such as a HIP, allows integration processes to be distributed, close to where the integrations are required. At the same time, development and administrative functions are centralized on the platform, providing the ability to develop, deploy, manage, and monitor all the APIs.
The future of APIs
Yes, APIs enable companies to integrate applications and create new products or services more easily than was possible before. APIs also help streamline how applications are integrated internally, with partners, and deliver composite data sources that empower people – staff and customers — to make the most of the data.
As the number of endpoints in the cloud and on mobile devices increases, the proliferation and expansion of use of APIs will continue. This will add to the complexity of managing APIs, so a Hybrid Integration Platform that simplifies and centralizes API development and control will become even more necessary.
Jamie Peers is a vice president for Synatic. He can be reached via email for further information or comment at jpeers@synatic.com. These opinions are the author’s own.
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