The API Tools Insurers Need in their Digital Suite
In the insurance industry, the growing desire to integrate core or legacy systems with distribution partners, 3rd party solution / data service providers and insurtech ecosystems, has created a demand for developing and maintaining these integrations easily and quickly. The valuable conductor role that API management tools provide in this new platform economy is one of the more essential tools that insurers must have in their toolkit to help them stack and incorporate business functionalities as part of a futureproof digital strategy.
By loosely coupling business capabilities in support of various lines of business, market segments, or distribution channels, insurers can interchange business and technology partners as it sees fit. Coupling ecosystem partners is just as important as decoupling. The ease of use of ‘plug and play’ with ecosystem partners and systems is quickly becoming the norm with insurers and a solid go-to concept in the 2020s.
The API management solution industry has responded to general industries and continues to evolve. First by way of horizontal-focused Enterprise Service Bus (ESB) solutions from current leaders MuleSoft and cloud providers like open-sourced Kong, Microsoft’s Azure API Management, Amazon’s API Gateway, and Google’s Apigee products. However, today, the development of API management tools within the vertical insurance software industry is starting to become impactful as they provide an alternative and cheaper solution to satisfy tactical needs and insurance digital strategies.
Enterprise Service Bus (ESB)
In the early to mid 2000s, the enterprise service bus (ESB) concept was created to provide companies with the ability to manage messages between services of different enterprise applications in lieu of building and maintaining complex and expensive point to point interfaces. The concept is simple – share data between systems via a central connector; the execution is complex – difficult and expensive (at the time) to implement and maintain due to lack of standards and intuitive developer interfaces.
Today the ESBs are easier to use and incorporate more integration support but still require specific skillsets. These skillsets are entirely different than those needed for core system UIs and portals that are frequently used where horizontal ESB solutions are utilized. One set of skills is needed for the core system and another set for the ESB. In some cases, ESB skills may be further divided depending on the role – API developer, integration developer, documentation or testing.
Insurance Digital Suites and API Management Tools
Enter vended insurance digital suites. These digital platforms are typically offered by a handful of insurance software vendors to core system clients. Insurance digital suites typically support of 3 pillars of duties: provide a low code/no code development platform, API and integration management tool, and a partner ecosystem of pre-integrated insurtechs, including 3rd party data service providers.
The digital suite API and integration management tools provide similar ESB features: the ability to create, define, and manage APIs; orchestrate the exchange and transformation of data between systems and other systems or 3rd party data sources; and provide tools to manage the integration.
Insurance Digital Suite Differentiators
Insurance digital suites typically offer three key differentiating features that insurers should consider when seeking digital tools for managing APIs.
- Does it provide a head start? The first differentiator is that if your core vendor (full suite or component) is also your digital vendor, core system knowledge and tested, pre-plugged interfaces are already there on day one. In addition, the vendor’s core system APIs include an ecosystem of partners which already licensed, developed, and tested APIs. This differentiator gives an insurer a headstart toward implementing their digital strategy.
- Single interface which requires similar toolsets – The second differentiator of a vended digital suite solution is that the staff required to support the low code/no code features, the API and integration management tool, and the coordination with partner ecosystem is the same. The skills required by the digital support team are not separated by the 3 pillars of duties. Thus, insurers will find themselves building and training a single team to handle those duties, increasing productivity, and speed to market.
- Optimized for insurance – The final differentiator is that insurance digital suites and their API and integration management tools are optimized for insurance business. For example, some insurer digital suites’ API and integration management tools include the automation of creating API data requirements based on insurance-defined metadata models that allow for quick development of APIs and web services.
Insurers have choices when it comes to building digital UIs, applications, APIs, and partner ecosystems. Best of breed offers solid, commercial and proven products. Insurance vended digital tools offer the opportunity for faster, lower cost and easier development efforts to bring digital strategies to fruition.