Application programming interface technology — software that allows different computer systems to "talk" to each other and share data — may be one of the hottest trends in the voluntary benefits industry. Less than two-thirds of carriers surveyed for Eastbridge's new "Application Programming Interface & Artificial Intelligence Carrier Practices" Frontline™" report are using APIs now, but nearly all respondents expect to in the near future.
If the carriers you partner with aren't already on board with this emerging technology — or actively planning to incorporate it into their operations — they could be setting themselves up for a competitive disadvantage. Here's what you need to know about APIs in the voluntary market.
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Where carriers are using APIs
The majority of carriers using this technology do so to facilitate enrollment and verify evidence of insurability. A significant number also find it useful for making demographic changes and applying the appropriate product rules and rates. Relatively few are using it for billing, policy set-up, or rating and quoting — so far. But it's reasonable to assume that as the capabilities of and comfort with APIs grows, so will its applications. In fact, most carriers already using this technology say they've added one or more new APIs in the last year, and some have also expanded the capabilities of existing APIs.
Source: Eastbridge's 2024 "Application Programming Interface & Artificial Intelligence Carrier Practices Frontline™ Report
How APIs help carriers succeed
Most carriers say using APIs has improved the efficiency of their operational processes. These improvements include fewer data errors, more efficient enrollments, faster account set-up, and reduced client onboarding time. Carriers also cite increased speed in many other areas, such as underwriting, proposal generation and billing. In short, your clients are likely to find it's easier to do businesses with carriers using APIs.
Why some carriers aren't using APIs yet
Despite these advantages, more than a third of carriers surveyed aren't yet supporting API data exchange. Most often, these carriers say they don't have the funding to invest in it, the technical resources to support it, or are focusing on other priorities. However, most of these late-adopters say they're now building these capabilities or modernizing their systems to enable API functionality.
API challenges and trends
As with any relatively new technology, there are still a few bumps in this virtual road. Carriers say a lack of consistent standards for data and formatting across the industry is a challenge, along with connecting APIs to their internal legacy systems and processes. Some carriers say simply educating clients about the advantages of APIs is a pain point. And as noted above, many struggle to find the technical resources and funding needed to develop and implement this technology.
However, a strong majority of carriers using APIs say it's a market differentiator for their company, allowing them to offer increased speed, more efficient processes, and broader connections and integrations. That can only benefit the employers and employees they serve — and ultimately your business, too.
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