This post is part of a series sponsored by AgentSync.
Insurance is full of funny acronyms. So extensive, in fact, that we’ve written several pieces like this and this one to try and cover as many as possible. While these articles give you more context on things like NPNs, NAIC, or P&C, in this article we’ll discuss a newer kid on the insurance acronym block: APIs.
Although APIs are not limited to the insurance sector, they are becoming increasingly popular among insurance and insurtech organizations – and for good reason! So without further ado, let’s dive into a discussion about APIs, including what they are and why they’re important for insurance.
What is an API?
While it may feel like the latest buzzword from tech companies, APIs are more than a passing trend. API, which stands for Application Programming Interface, refers to an intermediary software layer that allows two different systems to seamlessly transfer data between them.
For convenience, APIs help applications communicate with each other. Although there are different API structures (which we’ll discuss in more detail in a moment), the end goal of each is to provide organizations with a more accessible and standardized way to share data both internally and externally.
How do APIs work?
To understand how an API works without getting bogged down in technical nonsense, let’s walk through a scenario you’ve probably found yourself in: an Uber call.
When you use a ride-sharing app to request a ride, you interact with an API. The Uber app connects to the internet and sends data such as your current location and preferred destination to a server. This server retrieves the data, interprets it, and then sends relevant data back to the app. The app then interprets this new data and presents it to you in a way you can understand, for example by telling you the cost and estimated arrival time of your trip.
The API comes into play as soon as you open the request for a ride. Your request for a last-minute Uber ride to the airport is sent to the API, which pulls data like current traffic conditions, available drivers, and fastest routes and sends it back to you in a way that makes it clear to you that you are driving your flight miss.
What different types of APIs are there?
APIs can be divided into different “types” depending on how you categorize them. A common way to differentiate APIs is their audience. In this case we can separate them like this:
- Public APIs: Public APIs, also called external or open APIs, are available to developers and users with little or no restrictions. Think about the Uber example.
- Private APIs: Private APIs, also called internal APIs, are hidden from external users and are not shared for external use by the organizations that create and maintain them. Private APIs have more restrictions and only authorized people can access them.
- Partner APIs: Partner APIs are a middle ground that a company builds and manages for its own use and that of its strategic business partners. Users require special authorization to access partner APIS and these are not available to the public.
Another common way to categorize APIs is their structure. You may have heard of two of the most common API structures: SOAP and REST; Not to be confused with an extremely simplified self-care routine.
What are SOAP APIs?
The Simple Object Access Protocol, better known as SOAP, is an API structure type that supports complex data exchange. The SOAP structure is, so to speak, the forefather of API structures. It is older, more established, more clearly defined and more tightly controlled than other architectures.
One of the main differences between SOAP and REST is that SOAP APIs only allow data exchange via an 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. The data format provides preset specifications for how developers must organize data.
Two common message formats are JSON (JavaScript Object Notation) and XML (Extensible Markup Language). XML offers a complex but form-free way to structure your data and is used in a wide variety of technologies. JSON is a simpler format in comparison, but has become the lingua franca of REST APIs.
SOAP was one of the first standardized API formats and was successfully used in complex data exchange. However, the stricter rules and less flexibility have caused its popularity to decrease compared to other API types.
What are REST APIs?
American computer scientist Roy Fielding developed the Representational State Transfer Architecture, better known as REST or RESTful, as another approach to building APIs. Its flexibility and ability to deliver data via XML, JSON, and other message formats has solidified the REST structure as an alternative to the limitations of SOAP.
REST APIs have a rich ecosystem of software tools that provide easy access via common programming languages such as Java, C#, Javascript, and more. The modern tools available for REST APIs make them a popular choice for low-cost, worthwhile software.
REST APIs are typically documented in OpenAPI format so developers can easily determine exactly how they work and what they do. For example, anyone (with technical know-how) can take a look at AgentSync’s ProducerSync API documentation and find out how to use it.
Overall, the main advantage of REST APIs is their scalability and flexibility. Developers can quickly and easily integrate REST APIs into their existing software without much additional effort.
Why are APIs important in insurance?
You may have clicked on this article because you were simply curious about APIs. In that case, I hope you find it helpful. However, it’s more likely that you’re here to learn why APIs are important, and especially why they’re important in the insurance industry.
Broadly speaking, industries across all industries are using APIs for digital transformation. Integrating APIs into business operations can:
- Improve the customer experience by increasing efficiency and enabling greater personalization of a company’s products and services
- Reduce manual work and save employees valuable time and effort
- Save costs and downtime by eliminating the need to develop and/or integrate applications from scratch
Insurance carriers and agencies have several good use cases for APIs, from compliance data to claims processing, payment processing, and background checks. When it comes to insurance, having up-to-date manufacturer licensing and onboarding data at the point of use is a must. By leveraging APIs, network operators, agencies and MGAs can access up-to-date data when and where they need it.
API integrations are particularly beneficial for insurance companies that already have a robust, highly integrated technology stack. For example, legacy carriers with customized systems may be reluctant to add another layer of fully developed software, such as a standalone compliance solution, to their technology stack. Instead, it may be more efficient and cost-effective to push API data over existing systems.
Humanize your data with AgentSync’s ProducerSync API
AgentSync’s ProducerSync API is a REST API that provides access to more than 200 data points, including producer licenses, carrier appointments, and agent licenses. By delivering accurate, easy-to-understand data directly into your existing systems, your teams can eliminate hours of research and guesswork from their workflows.
Ready to leverage APIs for faster revenue, more efficient compliance teams, and reduced business risk? Contact AgentSync today.
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2024-03-21 04:43:14
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