Open Insurance
11
min of reading
August 31, 2021

The importance of APIs in Open Insurance

Willian Pereira
Content and Communication Analyst
Journalist and content creator for websites, blogs, social media and other digital channels.
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A crucial element in open innovation strategies, APIs become even more important with Open Insurance.

In the concept of open business models, APIs are the means through which Open Insurance companies share their policyholder data and other information on products and services. With these open applications, insurtechs and major insurers can  combine their expertise to create new solutions, offering  something that would be impossible to achieve on their own.

It’s no exaggeration to say that APIs are as important to Open Insuranceas an engine is to a car: without it, the car simply don’t work.

This new concept take the insurance market and the consumer experience to a whole new level. This open innovation model has made its way into Brazil, to revolutionise the sector and definitively imprint the culture of digital transformation in companies.

And when we talk about an open innovation strategy, we automatically step into the field of APIs – more specifically open APIs –, which are a crucial tool for Open Insurance.

Just like in Open Banking, APIs are the means through which companies share their policyholder data and other information on products and services. Therefore, knowing how to manage them is as important as complying with the regulations of SUSEP, the agency responsible for implementing and regulating Open Insurance in Brazil.

The role of APIs in Open Insurance

As mentioned at the beginning, Open Insurance is only possible because of APIs. After all, they’re responsible for allowing data sharing, speeding up the creation of applications, and for creating ideal environments to experiment and create new business models, bringing startups and innovation ecosystems closer together.

That is the premise of this Open Insurance System: secure information sharing among different companies, in compliance with the Brazilian General Data Protection Act, in an efficient, accurate and convenient way.

With open APIs, for example, insurtechs and major insurance firms don’t necessarily have to compete amongst themselves. Together, through APIs available in the Open Insurance environment, they can create new offers that would take years to roll out – that is, if they ever became feasible in the first place.

A classic example is the U.S. insurtech Lemonade, which made its API public in 2017. Thanks to that company, several insurance companies were able to offer insurance via app, using an interface that had already been created.

What does that mean? It’s a win-win situation for everyone involved: for Lemonade, which expanded its brand through third parties; for insurance brokers, which were able to offer plans through an app that, without the API, would have taken years to develop; and for consumers, as it made it much easier for them to purchase insurance.

Open Insurance can literally mean the transformation of business for many companies in the industry. By developing a product’s API and making it public, other professionals can develop innovative services and solutions based on your service.

Open Insurance APIs in Brazil

As the agency regulating innovation in Brazil, SUSEP establishes which APIs are part of Open Insurance.

  • APIs for products and services: gives access to open data associated to products and services offered by companies.

  • APIS for service channels: gives access to open data associated to public service channels, such as APIs of social media, chats, email, etc.

  • APIs for environment status: gives access to data regarding the current availability of API deployments. They must also give access to data on scheduled downtime.

All APIs must follow the principles of offering a good user experience, the possibility of being consumed in different languages and platforms, offering security, among others, since countless developers will have access to these applications and will also be required to follow these standards.

All requirements, definitions and recommendations can be viewed in the Open Insurance API Manual, provided by SUSEP.

The importance of managing APIs in Open Insurance


These whole scenario leads us to another crucial point in Open Insurance: API management.

If all these APIs are to be made available in an environment, for any company/developer participating in Open Insurance to access, then they must follow a standard to facilitate the process as much as possible.

The SUSEP manual establishes the minimum requirements in terms of traffic, performance (response time), and availability by time that open APIs must support. Therefore, companies need to manage all this data volume, including monitoring and analysing the behaviour of each application.

In addition to ensuring compliance with SUSEP’s standards and each company’s internal policies, API management also enables all the controls of API-based strategies to be centralised: from usage metrics to the workflow of third-party developers. 

A solution that will surely assist insurance companies, insurtechs and other companies in the sector to adapt to Open Insurance is the API management platforms, which consolidate all this information in a single place.

Sensedia’s API Platform, for example, offers a portal where developers can easily access published APIs, features that enable communication with dev communities and innovation ecosystems, among many other add-ons.

Open Insurance is undoubtedly the future. Whoever learns to ride this wave will definitely capitalise on this concept that has already taken the financial market by storm.

Would you like to learn more about Sensedia’s offer to the insurance market and Open Insurance? Click here to find out more.



Thanks for reading!