Insurance API 101: Application Programming Interfaces and How They Benefit the Industry

This article is part of a series sponsored by AgentSync.

Insurance is full of interesting acronyms.So much so, in fact, that we’ve written multiple articles on it, e.g. this and this While those articles will give you more background on things like NPN, NAIC, or P&C, in this article we’ll discuss a new word in the insurance acronym block: API.

While not limited to the insurance industry, APIs are becoming increasingly popular among insurance and insurtech organizations, and for good reason! So, without further ado, let’s discuss APIs in depth, including what they are and their importance in insurance.

What is an API?

While it may feel like just the latest buzzword being thrown around by tech companies, APIs are more than just a trend. API stands for Application Programming Interface, which refers to the middle layer of software that enables two different systems to transfer data seamlessly between two different systems. them.

Simply put, APIs help applications communicate with each other. While there are different API structures (which we’ll cover shortly), the ultimate goal of each structure is to provide organizations with a more accessible and standardized way to share materials internally and externally.

How does the API work?

To understand how the API works without getting bogged down by a bunch of tech geek gibberish, let’s look at a scenario you’ve probably encountered before: calling an Uber.

When you request transportation using a ridesharing app, you are using the API. The Uber app connects to the Internet and sends data such as your current location and preferred destination to the server. The server retrieves the data, interprets it, and sends the relevant data back to the application. The app then interprets this new data and presents it to you in a way you can understand, such as giving you the cost of the ride and an estimated time of arrival.

Once you open a ride request, the API comes into play. Your last-minute Uber request to the airport is sent to the API, which retrieves data such as current traffic conditions, available drivers, and fastest route and returns it in a way that makes it clear you’re going to miss your flight.

What are the different types of APIs?

APIs can be divided into several different “types”, depending on how you classify them. A common way to differentiate APIs is by their target audience, in which case we can separate them like this:

  1. Public API: Public APIs, also known as external or open APIs, are available to developers and consumers with almost no restrictions. Consider the example of Uber.
  2. Private API: Private APIs, also known as internal APIs, are hidden from external users and are not shared by the organization that builds and maintains them for external use. Private APIs face more restrictions and only authorized individuals can access them.
  3. Partner API: Partner APIs are a happy medium that enterprises build and maintain for use by themselves and their strategic business partners. Users require specific authorization to access the partner API, which is not open to the public.

Another common way to classify APIs is by their structure. The two most common API structures you’ve probably heard of: SOAP and REST; don’t mistake them for oversimplified self-care routines.

What is SOAP API?

Simple Object Access Protocol, better known as SOAP, is a type of API structure that supports complex data exchange. The SOAP structure is like the originator of the API structure. It is older, more established, more clearly defined, and more tightly controlled than other structures. architecture.

One of the main differences between SOAP and REST is that the SOAP API only allows the exchange of data through XML format.

A quick note on data formats

Data formats are rules for structuring data so that it can be stored or shared across different networks and databases. Data formats specify preset specifications for how developers must organize data.

Two common messaging formats are JSON (or JavaScript Object Notation) and XML (or Extensible Markup Language). XML provides complex but free-form data structuring capabilities and is used in a variety of different technologies. JSON is a simpler format in comparison, but has become the common language for REST APIs.

SOAP was one of the first standardized API formats to emerge and has been successfully used for complex data exchange, but its stricter rules and lower flexibility have caused its popularity to decline compared to other API types.

What is a REST API?

American computer scientist Roy Fielding developed Representative state transfer architectureMore commonly known as REST or RESTful, it is another way of building an API. Its flexibility and ability to pass data through XML, JSON and other message formats solidifies REST architecture as an alternative to the limitations of SOAP.

REST API has a rich ecosystem of software tools that can be easily accessed through popular programming languages ​​(such as Java, C#, Javascript, etc.). The modern tools available with REST API make it a popular choice for low-cost, high-return software.

REST APIs are typically documented in the OpenAPI format, which means developers can easily determine how they work and what they are used for.For example, anyone (with technical knowledge) can view ProducerSync API documentation for AgentSync and determine how to use it.

Overall, the main attraction of REST APIs is their scalability and flexibility. Developers can quickly and easily integrate REST APIs with their existing software without significant additional work.

Why are APIs important for insurance?

You may have clicked on this article simply because you’re curious about the API, in which case I hope you’ll find it helpful. However, you’re more likely to learn here about the importance of APIs and, more specifically, their importance in the insurance industry.

Broadly speaking, every industry is leveraging APIs for digital transformation. Integrating APIs into business operations can:

  • Improve the customer experience by making the organization’s products and services more efficient and enabling greater personalization
  • Reduce physical labor and save employees valuable time and energy
  • Save costs and downtime by eliminating the need to develop and/or integrate applications from scratch

Insurance companies and agents have several great API use cases, ranging from compliance profiles to claims processing, payment processing, and background checks. In terms of insurance, Must have current manufacturer licensing and onboarding data at the time of actionBy leveraging APIs, operators, organizations and MGAs can access current data anytime, anywhere.

API integration is particularly beneficial for insurance organizations that already have a strong, highly integrated technology stack. For example, legacy operators with customized systems may be reluctant to add another layer of fully developed software to their technology, such as a standalone compliance solution. Instead, it may be more efficient to thread API data through existing systems. ,more economics.

Humanize your data with AgentSync’s ProducerSync API

AgentSync’s ProducerSync API is a REST API that provides access to over 200 data points, including producer licenses, operator reservations, and adjuster licenses. By delivering accurate, easy-to-understand data directly into your existing systems, your team can take time away from research and guesswork from their workflows.

Ready to start leveraging APIs to accelerate revenue generation, increase compliance team efficiency, and reduce business risk? Contact Agent Sync today.

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