Sample API Use Cases for Insurance

Written by Alan Glickenhouse, Digital Transformation Business Strategist at IBM.

As IBMs Digital Transformation Business Strategist, I meet with clients to discuss their business’ digital journey.  Among other topics, this frequently becomes a discussion on Business API use case scenarios to support this journey.

To this end, I have developed a use case identification methodology to help with sample use case creation.  You can find the methodology described in this blog series: API Economy – 4 Business Drivers and 7 Use Case Categories – Series Overview.

Unfortunately, this is a general blog, not one personalized to your specific business.  So, instead I will apply the method to a broad view of the insurance industry.  Many companies focus on a subset of insurance offerings and not all forms of insurance (e.g. life, home, auto, travel, etc.)  Hopefully you will find some examples in this larger set that apply to you.  If not, try applying the method yourself and see what you can identify.

Let’s dive into the 7 use case categories and apply these to Insurance:

 

Mobile / User Interface

This category is for Mobile Apps or user interfaces such as web or tablets.  We can also envision different mobile apps for different roles - customers, partners/agents, or employees.   For user interface scenarios, I use the following categories:

• General information – information that is not tailored to the specific customer using the App. It could include general information about the insurance offerings – coverage types, office/agent locations, insurance calculators, tools.  For life insurance, insurance coverage options might be listed.
• Custom information and transactions – information and transactions that are tailored to the customer using the App. Obviously for these APIs, additional security is required to ensure appropriate access. APIs fitting into this category might include – pay your bill, view policy, review coverage and discounts, insurance ID cards, view/update profile, contact your agent, accident documentation and information collection, submitting claim, request assistance or road side service, check on claim status. For life insurance, policy, payments, beneficiary information, etc. could be viewed or transacted.
• Mobile advantages – Customers using the App on a mobile device can take advantage of functions of the phone or tablet in conjunction with APIs provided by the insurance company. Sample device functions that we can take advantage of are the camera, microphone, GPS services, and date/time functions. Relating this to the insurance company’s APIs we can use the camera to take a picture of any damages, use the GPS services with APIs to identify the location (in a car accident) and use the date/time to automatically time stamp the information. You could also use voice recording to capture information from witnesses. For homeowner’s insurance you could take pictures of belongings and catalog the items.
  

 

Social

Acting on company references in social media (both your company name and your competitor’s) and trends in social media can provide business advantages, allowing you to take advantage of opportunities or head off problems. For example, twitter feeds that reference your company may, combined with your own analytics, help determine if actions need to be taken to rectify customer satisfaction issues. Other references to consumer or business needs might allow you to act to offer insurance solutions.  You may be alerted to opportunities, such as individuals looking for travel related topics, maternity, wedding planning, etc. to offer advertisements for associated insurance products.

 

Data / Analytics

Frequently Insurance companies are organized in line of business silos focusing on one type of insurance product.  This makes treating your best customers – the ones who have many products – difficult.  A common API scenario is to share appropriate data within the company to a larger audience set, including the other insurance lines to treat the customer as one entity across the entire business and to upsell/cross-sell other policies to your existing clients.

In another scenario, Insurance companies gather large amounts of data about their clients which may make these clients attractive potential customers for companies in other industries. Providing access to data assets in aggregate can be valuable for advertising within the city where target customers might live. Or, clients may pay for access to send offers to your client base. For additional value (and with appropriate opt-in support) the ability to target specific insurance customers with offers from other industries could also be supplied.

 

Other internal scenarios

This category covers a variety of additional scenarios such as industry standards, regulatory requirements, audit, and security.

Both ACORD and NAIC have XML-based interfaces or other technologies that are commonly used across the insurance industry.  The technology is not the critical factor; it is about how easy it is to use the interface. Both organizations are discussing Business APIs to increase usability.  Many industries, including insurance, recognize the need for and value of API standards. No company wants to get similar but inconsistent APIs from all the other companies they work with. They want standard interfaces so that using multiple partners’ APIs will be easy.

API providers do not disagree. They understand that they are not going to differentiate themselves based on their API interface but rather on the quality of the products and services behind the API interface. Insurance companies, for example, can compete on value-add services integrated with their partner ecosystem, heightened digital engagement and personalized offerings to their clients.

If your region of the world has not issued regulatory requirements for APIs yet, industry standards for APIs are likely coming. Just as industries have found standards such as ACORD and NAIC to be useful, APIs are expected to help ease access to commonly used interfaces— with or without the need for regulatory requirements.

 

Partner

APIs can help make it easy to do business with you. Providing APIs to partners would allow these partners or agents to offer your insurance options to their customers.  The most common scenario is to make APIs available to insurance agents/brokers, who could offer your insurance to their customers thus extending your sales capability.  In addition, you can extend your reach to other industries that can send business to you.   Examples include automotive insurance for car purchases, homeowners’ insurance for real estate, vacation/travel insurance for travel companies, renters’ insurance, and life insurance for people who get married or have children. By providing APIs to these other industry participants the insurance company can obtain new customers focused on those areas who were not even thinking about the related insurance aspects.

Insurance companies might also create APIs for subcontractors who do work on behalf of you or your insured customers.  This includes auto repair shops, property inspectors, etc.

Thinking about each target consumer, identify what information and transactions they would require you to expose to automate their interactions with you.  Supplying these as self-service APIs expands your partner network far simpler and quicker than the one at a time approaches that have previously been used.  See Creating A Digital Ecosystem – Past, Present, and Future for additional thoughts.

 

Public

Many of the same APIs used internally and with partners can be used as public APIs to drive additional business and help obtain new customers. For example, rather than making the API available to only selected partners, the API could be public and used by any employer to sign up for your offerings. You may also choose to make an API available for a comparison App, so that your company can compete for new business.

Typically general information that is already public on your web site are good candidates for public APIs.

 

IoT / Devices

Auto insurance is already active with devices to monitor a driver’s behavior and driving habits. Safer driving is rewarded through lower premiums. Automobiles can also call for help in case of an accident and capture information about the accident that can be used in the claim process.  Home security monitoring, security cameras, fire / other sensors can be offered to customers who would then obtain reduced rates for reducing the chances of accidents/claims.  These devices use APIs to communicate the data to the insurance company. Other devices (e.g. Fitbit) could be used to monitor health activities and communicate the results back to the company for lower life insurance premiums.

 

To understand more about IBM’s thoughts on Digital Transformation and the API Economy visit the IBM API Economy website.  IBM API Connect is IBM’s complete foundation to Create, Secure, Manage, Test, and Monitor APIs.  You can find more information about IBM API Connect at the API Connect website.  And you can also experience a trial version of API Connect.