Insurance has been evolving since it began, way back in the 2nd and 3rd millennia BCE. It wasn’t until the Age of Enlightenment that insurance became more sophisticated, and solidified the principle beliefs that:
- insurers see disruption as an opportunity
- transformation is essential to success
- customers will always be key
Fast forward to today and a lot of focus has been on the increasing digital demands and technical components that enable carriers to focus on delivering the experiences their customers expect. Digital has been defined and even redefined, according to the interpretations and expectations of everyone who has a stake in the game. Not many have looked to the true source needed to help determine what matters – the customer.
For the P&C industry, insurers struggle to maintain loyalty among their customers, especially now that big digital service companies like Amazon, Google and Apple have reshaped consumers’ expectations of convenience and experience. Delivering personalized interactions based upon each individual customer seems like a difficult, daunting and expensive challenge. There are some insurers who have become pioneers in this landscape, not merely surviving but thriving.
Was there a secret formula that enabled these trailblazers to pave their own path to innovation? How did they overcome the barriers caused by antiquated legacy systems, manual processes, complex workflows and the inability to adapt and react? There is a secret formula and it starts with a digital strategy and the vision to utilize APIs as part of their transformational initiatives.
The Application Programming Interfaces (APIs) ideology began in the late 1960s and today businesses in nearly every industry have incorporated them to transform their digital capabilities. APIs are improving customer engagement by enabling seamless integration and secure data transfer between various technology programs. This allows insurers to deliver meaningful and personalized service. These powerful technology enablers offer a myriad of benefits which help insurers rapidly respond to new challenges and opportunities; from improving processes and increasing efficiencies to reducing time to market and operational costs and innovating faster and more freely – essentially reshaping their overall strategies to be more customer centered.
Core systems were designed to optimize product and process efficiency, and customer-centricity became more of a by-product. Now, however, even some of those modern systems have become antiquated, due to their inability to support channel diversification, modular application stacks, and continually evolving customer expectations. It was nearly impossible for an insurer to deliver all the products and services necessary at an acceptable level of sophistication and speed for their consumers. By leveraging APIs, they can now focus on the age old idea that the customer is still the key to continued success.
The quick and steady adoption of consumer connected devices indicates that disruption will continue to impact the insurance industry. The direct impact on the development of new channels, new lines of business, acquisition and operational efficiency and the ability to deliver exceptional customer experiences will certainly add to the challenges. While there is no real standardized approach or linear path to future states, API technology can and will provide a welcome solution for insurers, especially as it relates to providing customers with comprehensive choices, efficiency, flexibility, and speed-of-delivery. The types of APIs will certainly be a differentiator, whether distributed or consumable, it’s almost certain the whatever the next “new normal” is, API platforms will be the only choice for insurers to stay competitive and offer a superior digital experience to their customers.