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The positive effect of APIs on insurance technology

Insurance systems can be thoughtful.

We who work in IT or develop insurance systems have a lot in common with science fiction writers. We are always looking to imagine and achieve what has not yet been done. We look at systems that are very complex and we suggest ways to make them simpler. Once we reach some of our “impossible” goals, we strive for the next step and we push the external boundaries of technology to achieve what our companies, customers or clients need.

When it comes to APIs, however, there is something a little different going on.

Recently, APIs have been identified as “the building blocks for future applications.”[i] Majesco has a place on the front lines of this conversation, and we have first-hand knowledge of how APIs and the future fit together. But the idea that APIs are the building blocks of future systems may diminish what we actually find: APIs are like adding the future framework to today̵

7;s systems right now. When viewed correctly, APIs are a bit like traveling through time and seeing the future, with the ability to use future tools here and now.

Why would insurance companies want to discuss APIs more than they already have?

Insurance companies wrestle with their roles. How should they expand their roles to meet new needs and improve experiences? Do APIs have a role to play in improving what insurance companies are already doing? The answer is of course yes. Majesco’s strategic priority research and our Majesco CloudInsurer® environments have proven that APIs are crucial for digital activation. Let’s take a closer look at what APIs can do for systems and companies, then let’s consider why insurance should lead the way in the development and use of API platforms. First, it will help answer: “What do APIs do for organizations?”

APIs are the ultimate “value multiplier”.

Everything that an insurer does now, they can do again in a similar way. When it comes to systems, it means creating almost the same code, two or three times or a hundred times. However, APIs allow reuse. They avoid the need to rewrite the same code through multiple system connection paths.

If you can reuse code using connection APIs, you not only save code, you save time. You can increase the speed with which you can implement any new or versioned product or process. The value you have in your original idea and code is captured, exploited and easily accessible anywhere. This is what makes APIs the ultimate “value multiplier”.

APIs break down organizational silos.

Of course, if you have an efficient API-centric program, you reduce (and in an organized way) siled systems by breaking them down into smaller problem areas. This is a concept that has become popular in the technology world with the term “limited context. ” We put the guardrails around the context with smaller, more easily digestible application pieces. This is much better than having to deal with a monolithic, sifted approach, where each system is its own giant of system complexity.

APIs promote a consistent user experience.

APIs are designed to deliver results with customer experience in mind. There is a seamlessness in the purpose-driven journey from start to finish at the business function level, versus at the level of technical operation. APIs are seamless and useful by design. The way APIs are built and used in a platform environment provides a consistent user experience. You currently only get this level of usability in an API-centric environment. For those who work with systems, APIs are a lifesaver. Developers are currently spending a lot of their time adapting the software to the required experience. With APIs, however, the experience can be exactly what is needed the first time and each time.

When we realized that insurance companies needed a way to step into a cloud environment and gain experience with API gateways and platforms in the cloud, we designed Majesco CloudInsurer® with valuable insurance company content, easy-to-connect data points, plug-and-play partner technologies and advanced data management analysis tools. All of this is available in a secure, Microsoft® Azure-driven environment.

APIs are the ultimate IT do-over.

This is where we begin to bend the mind. Today’s API platforms can represent the company’s future license – and are used right now – even if the current license is not really where an insurer needs it.

Let’s say your organization has decided it’s time for a system transformation. You get two options for how to travel to the future. One is to uproot the architecture, get rid of old systems, recreate them and then reinvent a completely new architecture. This may need to happen.

The second option is a kind of time lag. It allows your future state to exist in tandem with your current state. Your organization is enjoying all the future benefits right now, even if your current state is not quite where you want it to be.

When an organization starts using APIs in a platform environment, they work within the future state of enterprise IT. Your company may have dozens of older monolithic systems and yet you can now hide all of these systems under one layer of APIs until they (themselves) are reconstructed as API-centric systems.

It’s the ultimate IT do over. You get future benefits while improving the present. It is by far the easiest, fastest way to move the organization to a workable, valuable and sustainable model. Even better, the idea is useful for insurance companies of all sizes / levels.

APIs can be a fast track to a new core system strategy.

Rebuild. Rehab. Reconstruct. These are common terms that insurance companies use when grappling with the reality of the transformation. The API method is different. It is more like conversion, re-certification or revival of the core strategy. When you start using APIs to transform, some things become very obvious in the process. Waste sticks out like neon signs. Layers that are hidden over time become more transparent. The complexity begins to unravel and develop. APIs allow you to re-evaluate core strategies to focus on everything that improves performance and improves the organization. APIs help both developers and business users to question the validity of system layers that lie beneath the API platform layer.

Insurance: a special use case for APIs.

If insurance companies could go back in time instead of forward, there would be three things they would deal with. These are insurance endemic issues:

  • High amounts of data
  • Complex data types
  • Too many rules

We can call the results of these three questions computer chaos. It is manifold complexity. We see the strains and strains of this complexity everywhere in the organization, from sales and marketing to complaints. Instead of going back and trying to fix these problems within our current system constraints, insurers can now customize their core strategies under an API platform umbrella that erases the problems instead of trying to fix them.

High amounts of data

If we compare industries, insurance has one of the highest levels of data volume, perhaps second only to banking. API cloud platforms are the solution to traffic and volume problems. For a greater in-depth look at this, read our blog on why APIs are better handled in the cloud.

Complex data types

Some insurance companies have been around for over 100 years, and most, if not all, have grown through acquisitions. From the beginning of the data collection and use, the insurance companies have housed and handled heterogeneous data. Their self-made systems have expanded with connected computer terriers designed as unique originals. The original data architects understood that there would be growth, but not like this. Silos are the norm. Complex data is made more complex by not matching.

APIs have the ability to break down these data silos. If APIs did nothing but break down insurance data silos, they would be worth it.

Too many rules

Compare insurance with many other industries and you will have a strange uniqueness. Insurance is an industry where there is no unifying technology platform. There are several platforms that then have several software applications on them. Each of these satisfies different aspects of an insurance value chain, whether it is a claims claim or insurance administration, or insurance or distribution management or brokerage. Insurance is the hub for precedents from hybrid platforms.

In order to build speed into these processes and systems, rules must be introduced. We multiply the number of rules by the number of applications and systems and we can see how system architectures remain so complex.

When insurance companies start using API-centric systems, they will reap many of the benefits of a universal industry standard, including better access to IT talent, which we will discuss in a moment.

Too many obstacles

There is a fourth question, but it is largely a mental one. Although APIs represent a better way, they are still perceived as difficult to design and use. In a recent report from Postman, common IT constraints come to the surface, such as lack of time, complexity, lack of knowledge, lack of people and lack of documentation, even though these may not be real issues at all. [See Fig. 1]

Insurers can overcome these barriers by using an API platform for cloud insurance. It reduces time and complexity because it is pre-designed for insurance use. Launching APIs requires very little specialist knowledge and every step is fully documented. This is further proof that when it comes to APIs, perceptions no longer correspond to reality. For a brief description of the API launch process, see our blog, An Eye on the APIs: A Cloud Platform’s Role in API Documentation, Administration and Governance.

From start to finish, the logic behind API use is that it is the best blend of forward-thinking technology and current IT course correction. Is your organization ready for the kind of mind-boggling innovation and technology that can throw it forward? Want to learn more about how APIs represent the new building blocks of insurance systems? Contact us today to learn more about APIs and Majesco’s cloud platforms that will take you into the future.

[i] Kerner, Sean Michael, Why APIs are the Foundation of Modern Software Development, IT Pro Today, March 29, 2022

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