A column by Pierre Fruchard, Co-founder of Coover
Three years after the creation of Coover, a digital broker in professional insurance, I note that the openness of insurers’ information systems remains very limited.
However, open insurance presents considerable opportunities for insurers, distributors and customers.
I am campaigning today for a rapid movement towards APIsation of the sector’s information systems. This will serve Coover but also the whole ecosystem, that’s my conviction!
APIsation and open-insurance: what are we talking about?
An API is an interface allowing 2 applications to be connected together and therefore to exchange information.
In the world of insurance, APIsation allows third-party players to access data (tariffs, underwriting process, etc.) and then return it to their systems.
Open-insurance refers more broadly to the opening of insurers’ data. This movement is notably made possible by the use of APIs.
A serious delay in the insurance sector
Unlike the banking sector which was forced to open up with the PSD2 Directive, the world of insurance remains very closed.
Projects have been set up with most wholesale brokers and insurers, but the projects are struggling to see the light of day.
The opening has started in B2C, in particular on health insurance and borrower insurance, but for B2B insurance, an available and functional API remains an exception.
3 years ago, when Coover was launched, insurers or wholesalers made great promises to us and indicated that web services were coming. Yet today, few of them have an API available. Worse, some projects have even been abandoned.
In the absence of an API, alternative solutions that are more do-it-yourself (widgets, Excel files, iframes, internal electronic signature, etc.) are used. However, they are imperfect and only solve the pricing step.
On the Insurtech side, it’s a totally different approach since the APIs are systematically used internally and accessible to third parties. And this both in France (Seyna, Luko, +Simple, etc.) and internationally (Lemonade, Zhong An etc.). We therefore have a 2-speed system with very agile Insurtechs but which cannot interface with traditional players. One exception deserves to be underlined: Wakam (formerly La Parisienne Assurances) which has taken the digital turn.
Bad reasons hold back open insurance
One of the reasons given by insurers to justify the absence of an API: distrust and the desire to keep control over their offers. How can trust be restored between insurers and policyholders without the transparency that the latter are looking for?
The other arguments unfortunately reveal a short-term vision: financial cost, internal resistance to change, technical barriers, computer security and the need for a total overhaul of the information system to APIser it.
APIsation certainly represents an effort, but switching to more modern infrastructures can only be beneficial.
Why APIsation of insurance will be virtuous for all
The opening of data promotes transparency and promotes comparison, which is increasingly sought after by the latter. The personalization of offers will allow access to better rates. In addition, the user experience is improved since all acts (payment, endorsement, etc.) can be carried out on the same platform. Finally, the addition of new bricks in API will add a service dimension to the offer.
The integration and construction of new offers will be easier and less costly. API pricing and subscription will be accelerated, therefore the human and financial resources freed up will make it possible to provide a better service. In addition, the risk of error and lack of advice will be reduced.
Today, digital distribution is only possible for players with a significant strike force, able to directly negotiate delegations or tailor-made contracts with insurers.
From now on, traditional insurance distributors (general agents for example) will also be able to use the web and digital marketing to acquire customers and market their offers.
Finally, players not specialized in insurance will also be able to offer offers more easily in their interfaces.
The data collected can be used to build offers adapted to current challenges (cyber, climate change, aging population).
With open insurance, many technologies can be integrated without being developed by insurers.
Contract updates (prices, guarantees, etc.) will no longer need to be sent to all stakeholders.
Finally, APIsation, which streamlines exchanges between stakeholders, makes it possible to better meet compliance obligations.
At a time of GAFAM omnipotence and when Tesla has just announced the launch of its car insurance offer, it is urgent to preserve our sovereignty not to let new trains pass. And that of open insurance is one.
APIsation and open insurance are inevitable, so why drag?