APIs: the New Game Changer - for Commercial Auto Carriers
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APIs: the New Game Changer for Commercial Auto Carriers
Insurance Industry Overview
The insurance industry has traditionally been very apprehensive
of technological innovation. For centuries, insurance providers
have been rooting their customer relationship stability and con-
sistency in cultivating a sustained trust. The practice of
curating long-term relationships has traditionally been the
customer acquisition and retention model within the insurance
industry. The time needed to grow a trusting customer base
has been always treated as the safety factor that allowed
carriers to keep innovation in status quo. In terms of market
competitive-ness, the industry has always been known for its
high barriers to enter and strict government regulations
therefore limiting com-petition from the new entrants.
Insurtech is a term applied to various disruptive
technological innovations within the insurance industry that
help improve op-erational efficiency and achieve additional
operational savings within the current insurance model. With
the rise of Insurtech, the wind of technological change has
been inevitable with agility and acceptance of change being the
main new rules of engage-ment. Big data, IoT (Internet of
Things), mobile technology, artifi-cial intelligence (AI), wearable
devices, and blockchain are trans-forming insurance into a
more vibrant and dynamic playing field built on fast pace,
recognition of consumer needs, and a keen awareness of the
competition. In the face of these technological developments,
insurers are rightfully concerned with their ability to effectively
compete in the market place.
1Market Dynamics Shift
The Millennial generation, the main tech- The need to enhance digital experi-
nology users who now outnumber the ence spreads to the business technolo-
baby boomers, demands simpler products, gy consumers in the insurance industry.
streamlined customer experiences, as well Instant data access, reduction of infor-
as personalization and a holistic omni- mation asymmetry, accuracy, compre-
channel experience. These users demand hensiveness and new reach-extending
communication whenever, wherever, and capabilities paired with a friendly UX and
however they want. They value speed and enhanced digital experience are now
convenience over the cumbersome com- the key elements of success for any in-
plexity and previous coding knowledge surance-focused third-party integrated
requirements. Such trends present a chal- technology. While insurance is still about
lenging environment for the insurance statistics and risk mitigation, the quali-
carriers who face a declining customer ty of input data has a direct relationship
satisfaction levels, as reported by IBM In- with the reliability of the output and mar-
stitute for Business Value, low-interest gins of error. This is where the need for
rates, stagnating premiums, and a high cost-collapsing technology — such as di-
pressure to deliver measurable ROI for rect API integrations of 3rd party data is
their policy administration systems (PAS). evident.
Customer Communication Preference Website Insurer
Varies by Psychographic Segment
Demanding Support-seeker
Support-seeking Skeptic Peers Aggregator
Informed Optimizer
Q: Please select the 3 channels most
important to you when searching for
INFO about your insurance coverage.
Source: IBM Institue for Business Value survey data 2014, n-6,211. Tied Agent Telephone
2APIs
WHAT ARE THEY &
WHY DO WE NEED THEM?
We live and work in an era of increasing
connectivity, where data is becoming a big-
ger part of our everyday lives. Application
program interfaces (APIs), the snippets of
code that allow software applications to
interact in a common language, are ever
more present in the everyday consum-
er and business environments alike. Web
APIs are an especially useful variant that
allow businesses to access data produced
by other 3rd party companies and seam-
lessly integrate it anywhere and anytime
it’s required. APIs have transformed the
way businesses interact with each other
and the way they provide value to their
customers.
3The Benefits of Using APIs
APIs grant access to a wide variety of or manipulation.
resources and allow for cross-plat-
form communication within a busi- Efficiency
ness. For example, APIs power the Consuming an API created and
connection between the insurance hosted by a 3rd party can also
PAS and a database with vehicle substantially reduce the labor
values and specs necessary to un- requirements for IT departments.
derwrite a policy for a commercial By handling many background
truck or a passenger auto. tasks and running continuous
maintenance, the use of third-
Alternatively, let’s consider the pro- party API providers can reduce the
cess of signing policy documents. number of employees needed to
While twenty years ago, all policy perform web-centric information
documents were sent through the gathering and compu-tation tasks.
mail with a longer turn-around Integrating APIs allows a company
time; today signing a document to outsource parts of the
only takes a few clicks thanks to the business process for a fraction of
introduction of e-signature prod- the cost of building the same in-
ucts powered by APIs. house capabilities.
Simplicity Efficiency goes together with
APIs allow for a single instance of the benefit of workflow
data creation to be automatically optimization and system and
distributed externally to customers process automation. Within the
and internally to coworkers, rather property and casualty insurance
than reproducing work when and segment, the need to access a
as needed. Simplicity is the keyword large asset database can be
here. Rather than struggling to for- streamlined through integrating
mat a large file in a spreadsheet pro- asset data through APIs. In
gram to extract a marginal many cases, coupling a well-
amount of information, an API designed API with batch
can provide the data needed processing analytical methods
without requiring extra research can even open
4new channels for business devel- Amongst other API integration
opment and financial growth, such benefits are the options for mo-
as creating a data-driven business bile development, partnering and
product or producing market intel- partner onboarding opportuni-
ligence or consulting work. Such ties, decrease in time to market
methods are especially favorable for new products, addressing
for older and well-established com- competitive pressures to keep
panies with a significant amount of up with the market trends, com-
historical data that provides valu- pliance with regulatory require-
able intelligence. ments, and business positioning
for the future through a focus on
Customization innovation.
Enterprise applications have also
greatly benefited from the in-
creased capacity for APIs. While
their software was once produced
individually and formatted to fit
each customer’s needs, web APIs
have allowed enterprise develop-
ers to deploy their central platform
alongside APIs for customers’ use.
Additionally, while consumer prod-
ucts may need to have offline capa-
bilities, enterprise software is rarely
disconnected from a network. This
eliminates the risk of losing data
transfer during periods of low con-
nectivity. These advances have re-
sulted in more efficient enterprise
software and reduced costs for
customers.
5Key Business Drivers
for API Initiatives
Speed is usually the first API driver to
foster an efficiency improvement with-
in an organization. It allows business to
react quickly to new opportunities and
competitive threats while preserving
the core enterprise systems from out-
ages or security exposures. Instead,
APIs prepackage core system assets for
business consumption while simultane-
ously creating new systems of engage-
ment.
Extended Reach is another benefit
of API adoption. It can offer new, pre-
viously unavailable, opportunities for a
carrier who is looking to venture into
new markets or go after new custom-
er groups. For example, a commercial
fleet insurer may partner with a fleet
financing entity that might offer vehicle
loans to the current insurance custom-
ers through referrals.
3rd party integrations determine how
easy, or complication API implementa-
tion can be. Price Digests offers multi-
ple 3rd party integrations with the ma-
jor leading insurtech platforms.
6API Provider Selection Criteria for
Policy Administration System (PAS)
Workflow Optimization
Since the insurance eco-system is vibrant with multiple suppliers and service providers,
applying a set of success criteria to their selection helps standardize the best business
practices of API provider selection.
Product Maturity Vendor Stability
Mature product with Established industry
a steady or growing presence, sound
market share and financials and long-
client base. term support
for carriers.
Tech Innovation, External Data Quality
Security, Compliance & Comprehensiveness
rkflow
Wo
Vendor’s track record of Clean taxonomy, API docs are avail-
innovation, market leader- able, data offered is comprehensive,
ship, and resources for a complete and covers all asset types
long-term strategy. for IMMEDIATE value creation.
Key Business Drivers
User Interface
for Superior Functionality Op
• Extended Reach (new markets, t i m i za t ion Intuitive, convenient and easy to use.
new customers) User Interface with flexible options.
• Risk Mitigation (data accuracy, Complete turnkey solution
timely valuation)
• 3rd Party Integrations
• High Speed
Support Workflow
Superior support API solution in-
during and after creases efficiency
implmenetation, and grows produc-
minimized down tivity, streamlines
time, continuous underwriting and
maintenance. rating process.
71. Vendor Stability
Suppliers with an established indus- for monetization purposes, such
try presence, sound financials and as a mobile market place or, for a
a forward-thinking API economy commercial fleet insurer, the op-
strategy can offer the best partner- portunity reach could be extended
ship opportunities. It includes their to underwriting new, not previously
ability to consolidate and standard- covered, commercial vehicle cate-
ize common APIs within an organi- gories.
zation, increase carrier’s efficiency
and lower the cost of operations Price Digests has been providing
through providing accurate and quality vehicle data and specs since
reliable data and thus mitigating 1911. Our long-term trust-driven re-
uncertainty risk. Well-established lationships within the commercial
third-party API and vehicle data auto and inland marine insurance
providers can also help the carri- make us the preferred vehicle data
er to define a new business model API provider.
2. External Data Quality
API solutions providers that can prehensively the vehicle specs get
offer a clean taxonomy and a full populated into the carrier’s busi-
set of developer documentation ness system during quoting and un-
should be valued over other less derwriting process — is an example
transparent competitors. Exten- of a time-saving and cost collaps-
siveness of the asset database and ing external data quality variable.
high match rates, as well as com-
prehensive all-vehicle type cov- Price Digests supplies VIN data for
erage, can offer immediate value 99.5% of all commercial trucks
creation. In commercial auto insur- including those with custom truck
ance, the comprehensiveness and bodies. It is especially valuable in
accuracy of the VIN prefill data— cases when a VIN lookup returns
namely how accurately and com- the value of an incomplete truck
8comprised of the cab and the chassis only. *Data Quality as a Factor in Building Trust
However, once the custom truck body is and Fairness Perception
added to the valuation, it may increase the
incomplete vehicle “Cost New”, or its mar- The reliability and continuous updating
ket value, by over 60%. With a large custom of the third-party vehicle data supplied
bodies database available, Price Digests of- through direct API integrations is also im-
fers carriers the ability to operate with this portant. It has a direct bearing on cultivat-
high-degree of data granularity that keeps ing customer trust. Since online quotes
insurance providers from underinsuring are the preferred quote delivery vehicle,
commercial fleets — a dangerous practice the accuracy of such quotes from the first
that may leave risk on the table. customer touch point with the insurance
A price that is too low is just as bad for loyalty as a too-high price.
Do you think the premium of your insurance is...
4.3
4.2
Loyalty Index
4.1
4.0
3.9
3.8
3.7
Too High Fair Too Low
Source: IBM Institue for Business Value survey data 2014, n-12,210.
9provider’s brand forms the percep- That brings us to the question of a
tion of the provider’s solution fair- sustainable business environment
ness. The concept of “what is fair” in the insurance industry and ways
is the most important insurance to boost its stability while account-
brand perception element that af- ing for growth.
fects insurance customer loyalty,
according to the IBM’s survey. A APIs offer modern insurance com-
too-low valuation that does not ac- panies a mechanism to become a
count for the custom elements of transformational power in the in-
a vehicle has the same negative dustry able to rapidly respond to
impact on a prospective customer any market segment disruptions.
that the too-high of a price may They also offer significant value to
have. any insurance business.
3. Workflow Optimization
The main ROI driver of any API in- cial fleet insurers, the answer to
tegration is the answer to the ques- this question lies in the speed of in-
tion of “How much can an API formation transmission, the accu-
solution improve my operational racy of the returned vehicle values,
efficiency and productivity?”. For high VIN match rate (up to 99.5%),
Price Digests, a premier workflow and the proven ability to complete-
optimization solution for commer- ly automate the prefill process.
4. Support
The key factor to look for here man technical support to minimize
is API provider’s ability to closely system downtime while continu-
work with the carriers’ IT during ously maintaining it. API creation,
the development, test, QA, imple- runtime, management, and secu-
mentation and deployment stages, rity should be the focus areas for
as well as provide a superior hu- both — the service provider and the
10carrier implementing the solution. of customer support during the
entire API solution implementa-
The Price Digests API integration tion process as well as continuous
team ensures the highest degree post-integration assistance.
5. Product Maturity
Going with an API provider that of- Price Digests is amongst the most
fers a mature product while main- mature vehicle data API providers.
taining a steady or growing market The company was first to introduce
share is a good practice to align the first VIN-driven database deliv-
business values between the pro- ered via flat files in 1988. Our first
vider and the carrier. Since the in- API solution rolled out in 2005.
surance industry has been known Since then, our continuous product
for its high regard to stability and improvement rooted in agility and
consistency, forming a partnership technological innovation has been
rooted in these two principles could the organization’s core focus.
guarantee long-term success.
6. Tech Innovation, Security and Compliance
The maturity of the providers’ viders opt to implement the latest
product does not mean disregard API technologies into their prod-
for innovation. On the opposite, a ucts. Representational State Trans-
stable product that increases its fer (REST) and Simple Object Ac-
robustness through technological cess Protocol (SOAP) are the most
agility, continuous improvement common ones with the latter be-
while embracing the latest techno- coming more outdated. Provider’s
logical trends is a sure way for the use of JavaScript Object Notation
carrier’s competitive operational (JSON) language indicates techno-
advantage over other industry in- logical agility and forward-thinking.
cumbents. Innovation-minded pro- Both JSON and REST are the most
11modern API practices that are sim- forward-thinking and future-ori-
pler to understand and consume ented insurers should align them-
than their more outdated counter- selves with the API providers that
parts. Furthermore, the provider’s offer the latest technology.
use of HTTPS, the secure proto-
col, is also preferable to HTTP, the The API provider’s track record
non-secure version that lacks the of innovation, market leadership
communications encryption. While and a long-term strategic orienta-
both protocols are presently used tion present an insurance policy in
by various VIN API providers, the themselves.
7. Technical governance
Since operational ROI is deter- consideration multiple current
mined by a holistic implementation business processes and methodol-
of the API best practices while con- ogies that enable carriers to align
sidering a wide range of stakehold- business strategy and goals with IT
ers — from the solution business services and its infrastructure. We
consumers to the IT and business provide all API documentation and
leaders, it is worth mentioning the work with the carrier’s develop-
technical considerations as well. ment team to ensure a streamlined
Price Digests holistic approach to integration process.
its API implementation takes into
12Conclusion
API solutions have contributed to a major insurance
industry transformation by offering insurance indus-
try a way into the digital revolution that has spread
across consumers’ lives while maximizing operational
efficiency and productivity. On the policy side, the right
VIN API solution provider could help foster a guaran-
teed reduction in the underwriting times through an
accurate and fast VIN prefill. On the other side, im-
plementing an API solution allows boosting the en-
tire organization’s partnership eco-system for related
service providers that can help generate new revenue
streams and elevated partner engagement.
Industry Overview and Analysis by:
Nadia Davis, MBA Brand Marketing Manager
Sam Giffin, MSE Director of Data & AnalyticsAt Price Digests we believe in the power of information and
data-driven decisions. We believe in business solutions that
are efficient, comprehensive in scope, intuitive and easy to
use. Since our inception in 1911, we have learnt from experi-
ence that one size does not fit all. So, we tailor our products to
our customer needs with flexible delivery formats from web
application, API, flat files to custom reports, data cleansing,
and consulting. Our VIN-driven API solutions for the Com-
mercial Auto insurance carriers allow users to standardize
their book of business, improve policy and claims process ef-
ficiency with a VIN return rate up to 99.5% for model years
1981 to current. Our APIs integrate with multiple third party In-
surtech platforms while offering coverage for all vehicle types.
On the technological side, the Price Digests APIs are RESTful
JSON-based with continuous updates and improvements to
deliver technological agility. Focused on data security, the
Price Digests APIs provide secure communications protocols
on the AWS platform. With a dedicated integration team and a
continuous live support, Price Digests has been known as the
VIN API market leader for insurance, finance, government,
and dealer industries.
6190 Power Ferry Rd NW, Suite 312 Atlanta, GA 30339 Phone: (888)-488-2062
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