APIs and InsurTech: Simplifying complex connections

APIs are at the heart of our industry’s technology evolution—and at the heart of Vertafore’s overall solutions strategy.

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For years, many insurance technologies operated as closed systems—like containment bubbles where nothing could (easily) get in or out. Adding or extracting information usually required manual data entry or clunky, labor-intensive downloads and uploads.

In the early days of InsurTech, closed systems made sense. For starters, there just weren’t that many technology options available in the industry, so moving data between systems within an organization was a rare occasion. When information was largely transmitted across the distribution channel by paper, tapes, or disks, manually entering information was accepted as business as usual. And closed systems were also seen as a clear way to secure sensitive data.

But InsurTech innovation has skyrocketed during the past decade. Even with a significant drop-off from its peak in 2021, global funding for insurance technology still reached $4.5 billion last year. And independent agencies and insurers alike now rely on more tech to run and grow their businesses. A survey from Catalyit found that the average agency owns six solutions. Carriers, with their complex business needs, rely on many times more systems.

At Vertafore, we recognized years ago the limitations of closed systems and platforms that claimed to handle every aspect of an agency or carrier’s business. In response, we’ve invested deeply in an open architecture strategy for our technology.

This strategy—which fuels everything from the Vertafore Orange Partner Program to our vision for AgencyOne—is backed by APIs that can share data across our solutions and enable us to integrate with other tools you count on. APIs are at the heart of our industry’s technology evolution—and at the heart of Vertafore’s overall strategy.

So let’s talk about how APIs are accelerating innovation in insurance and where they are supporting your work every day.

Modernizing tech connections in insurance

Application Programming Interfaces, or APIs, are a set of rules and protocols that define the methods, rules, and data formats that software components can use to communicate with each other. Simply put, APIs allow software platforms to exchange and use data seamlessly.

Outside of insurance, APIs are so foundational to our everyday technology that most of us don’t even think twice about how information is shared and integrated. APIs power the alerts that appear on your weather app in your phone. They are essential to payment platforms like PayPal, Stripe, and Square. And services like Google Maps use APIs to surface everything from real-time traffic data to nearby restaurants.

When it comes to insurance distribution, here are just a few of the ways APIs facilitate how InsurTech and business solutions work with each other:

  • Simplification: Insurance processes are complex, involving multiple layers of data and functionality. APIs simplify this complexity by abstracting away the technical details, providing a simple way for different systems to interact. This means that even without diving into the nitty-gritty of coding, teams can leverage the power of interconnected software solutions.
  • Communication protocols: Much like insurance policies follow standardized formats and procedures, APIs rely on established communication protocols such SOAP or REST. These protocols ensure smooth communication between systems, both within single organizations and across different players in the insurance ecosystem.
  • Data formats: APIs define the structure and format of the data that flows between systems. That means vital information, like client records, is exchanged accurately and without the variations that happen when humans enter data. APIs ensure that everyone speaks the same language and tasks are repeatable when it comes to data exchange.
  • Security: Protecting sensitive client information is table-stakes in insurance. APIs often come equipped with robust security measures, including authentication and encryption, to safeguard data as it travels between systems and ensure compliance with regulatory requirements.

Making insurance systems work better, together

In short, APIs are the backbone of modern insurance operations, enabling seamless integration, efficient data exchange, and enhanced collaboration across systems and partners. With APIs, InsurTechs can unlock new opportunities for innovation, and agencies and carriers are better equipped with the right information to improve their client experience. And as technology works better together, the industry is seeing benefits like:

Robust data analysis: Agencies and carriers know their systems are data gold mines. The challenge has been extracting and analyzing that data. But with robust APIs, data owners can more easily integrate with solutions and vendors that can turn data into powerful business insights. The ability to transform and transfer data can give the smallest agency access to machine learning and other analysis tools, equipping them with actionable information to grow their business and serve their clients.

Better data quality: APIs enable us to reduce the variations that come with manual data entry by quickly validating information as it is entered. I'll give you an example. Right now our team is working on an API that connects an agency management system to an address verification system. So as a user adds an address in the AMS, the API can reach out to a third-party source and immediately check whether the address is correct. That’s just one example of how real-time validation ensures cleaner data, and that quality continues as other APIs access that same data point within the AMS.

More efficient workflows: APIs are also making it more feasible for users to work in fewer systems and reduce the need to change platforms to execute core tasks. For example, last year at Accelerate, we announced that we are developing the ability to bind coverage directly in PL Rating. When that feature is available, users can generate a quote for personal lines coverage as they do today—and then bind and issue that coverage without ever leaving PL Rating.

Faster, easier systems conversions: APIs reduce a lot of the pain that can come with firing up a new system or changing solutions after a merger or acquisition. From validating the quality of existing data to facilitating the transfer of information between systems, APIs can cut out a lot of time and frustration from the conversion process—and set your new system up for success.

Vertafore’s API strategy

Those are just a few of the benefits that come with an API-backed architecture. And over the years we’ve created more than 1,500 API connection points, both within our systems and with other solutions, like our Orange Partners and tools like Salesforce.

But not all of these APIs talk the same language, and some do the same in different ways. Our team is working to address that challenge in a couple of ways.

First, we’re looking at all the API capabilities that we have across systems and how we can create a master source of truth. For example, we’re saying, “Hey, every AMS should have these baseline APIs for things like accounting and client records, and the APIs need to be able to read, to write, to update, and delete that data in a consistent way.”

That standardization of functionality is going to go a long way toward more single points of data entry. For example, think about creating a client record in one system—like Salesforce, a billing system, or PL Rating—and having it seamlessly appear in your agency’s management system. Streamlining our APIs is about accelerating our journey of simplifying and automating essential workflows by reducing duplicate entry, making things more efficient, and helping our customers systems’ talk better to each other.

Second, our long-term goal is to create a centralized place—an API portal, if you will—where our customers can access the connections they need, with one security model and centralized reporting. APIs housed through this portal will be vetted and standardized, allowing our customers to quickly get access to a lot more functionality. And in addition to pre-built connections, this API portal will give our customers the building blocks to transform connections to meet their own endpoints and needs. 

At the end of the day, our API strategy is driven by our core purpose: to simplify and automate the insurance distribution process so that our customers can focus on what matters most to them.

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Jace Hopper
VP, Product Management

Jace brings tremendous experience leading product management for complex software solutions, specifically focused on modernizing existing technology. Having managed new and existing product development for large public and startup companies, Jace’s knowledge of simplifying and integrating the platform experience while meeting the needs of customers and deliver promises and commitments. He's leading the strategy for Sagitta as well as BenefitPoint and WorkSmart/ImageRight as a Vice President of Product Management.