The Open Insurance paradigm is becoming more and more prevalent as a way to simplify and streamline operations, providing greater access and sharing of insurance-related data and services with third‑party providers through standardized interfaces.
Federico Soncini Sessa, CEO & co‑founder of Mia‑Platform, talked about it during the online event organized by the Open & Embedded Insurance Observatory on May 11th, 2023. This article reviews his keynote speech on how to approach Open Insurance with APIs and modern technologies.
Open Insurance is now a reality
In June 2022, EIOPA unveiled the outcomes of its public consultation conducted in 2021, accompanied by a fresh discussion paper. The consultation findings indicate that a significant majority of stakeholders within the insurance industry express support for the implementation of a regulatory framework akin to PSD2 in the financial services sector, mandating systematic data sharing among all the different players in the market. Moreover, industry stakeholders anticipate the introduction of comprehensive regulations for Open Insurance in Europe by 2023. These proposals are expected to encompass legal guidelines governing access and systematic data sharing, as well as technical standards such as APIs, to facilitate the seamless operation of the ecosystem.
These regulatory changes are reshaping the insurance landscape, encouraging collaboration between insurers, insurtech startups, and other technology companies to deliver more personalized, transparent, and convenient insurance solutions to customers.
An enabling technology for Open Insurance: APIs
APIs are undoubtedly the crucial technologies that empower Open Insurance. They serve as the driving force behind digital business and are pivotal in facilitating seamless integration with strategic partners. This is primarily due to the fact that APIs are standardized and reusable IT components that significantly shorten the time‑to‑market of digital initiatives. Furthermore, APIs foster a seamless connection between the business and IT domains, forwarding a new dialogue that expedites application development. Ultimately, APIs play a fundamental role in forging partnerships and unlocking new sales channels effortlessly and independently.
Therefore, the first step in the Open Insurance implementation is a so‑called API Layer. This means making all company data and services available via APIs to the ecosystem of partners and company channels. A powerful tool in this scenario is the External API Portal or External Developer Portal, to enable a self‑service integration from key partners. With detailed technical documentation that clearly explains how to use an API and sandbox environment to perform tests, it facilitates independent external request access to company products and services. As a result, the overall governance process of building a shared value proposition with industry partners is centralized.
Many insurance companies have already invested in this kind of tool to exploit APIs’ capabilities. Mia‑Platform External Developer Portal is an example of a ready‑to‑use solution to build and customize your own portal starting from an insurance domain API catalog.
The struggles of managing APIs
However, relying solely on an API Layer is insufficient, as companies continue to face challenges in effectively managing and overseeing APIs. Firstly, it is important to recognize that the External API Portal represents just one aspect of a more complex API lifecycle. Companies not only need to catalog their APIs but also make modifications, enhancements, compose them, create different versions, and more. Therefore, companies also have to govern the evolution of these APIs.
Secondly, if the API layer is directly connected to the systems of record, the performance and availability of the data and services provided by these APIs become dependent on the performance and availability of the legacy data sources. This often leads to an inconsistent API user experience for partners and third‑party developers.
Lastly, it is evident that partners frequently demand customization of the APIs to align with their specific technical or business requirements. Hence companies need to be able to flexibly build the necessary components to provide a tailored experience to their partner ecosystem.
The Data Management Layer
To address these challenges, companies require two additional layers.
The first one is a Data Management layer, serving as a decoupling mechanism that collects data from the underlining systems and ensures its availability 24/7, regardless of the systems’ individual availability. The technology behind this Data Management layer is also known as data fabric. This enables the company to alleviate excessive workloads on legacy systems and to rely on real-time data for seamless integration through APIs.
This layer is at the core of the paradigm of Digital Integration Hub, which empowers companies to decouple the legacy systems from the external consumers and to create unified and customized views of data based on their specific business requirements. For example, a Customer Single View consolidates diverse pieces of information originating from disparate and non‑integrated IT systems, such as personal data, customer policies, claims, and more, into a single, user‑friendly perspective.
Mia‑Platform Fast Data enables you to build your Digital Integration Hub solution that allows you to integrate data from core legacy systems (e.g., Life System, Non‑life System, Claims Management System), aggregate it according to business needs in Single Views (e.g., Subject, Policy, Asset), and securely expose it to channels in milliseconds.
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The Business Logics Layer
As previously discussed, partners often need customized API experiences. Therefore, the business logic layer serves as the ultimate component of a modern way to approach Open Insurance. Here, companies develop, reuse, and enhance microservices, as well as potential frontend components, which can be combined to generate unique services for partners. The foundations of this layer are an Internal Developer Platform and Composable Architectures, coupled with an agile organizational structure that facilitates collaboration between business and IT areas. This structure empowers the swift deployment of new APIs, applications, and customizations.
The Internal Developer Platform (IDP) serves as a robust tool for organizing and cataloging all the microservices, APIs, and frontends within the company. It enables different developer teams or suppliers to collaborate effectively. The IDP empowers internal IT management to establish standardized rules across teams, ensuring consistency in terms of security, privacy, and quality. By leveraging the Internal Developer Platform, development teams and business teams can seamlessly collaborate to create new API solutions and customize them for partners, while significantly reducing the time it takes to bring these innovations to market.
Mia‑Platform Console is an example of Internal Development Platform that improves the entire software development experience (also referred to as Developer Experience), speeding up its delivery and facilitating its governance.
Composability encompasses the essence of reusing and combining APIs and microservices, much like assembling Lego bricks, to build innovative applications. Instead of starting development from scratch each time, the focus is on reusing and composing packaged business components such as electronic signature, claims management, price quotator, policy issuer, payment gateway, and more. This approach offers clear advantages in terms of speed, efficiency, and productivity, as it eliminates redundant efforts and maximizes the utilization of existing resources.
Mia‑Platform Marketplace is an example of a comprehensive Service Catalog that provides an ecosystem of ready‑to‑use components to tackle composable architectures.
The final element of this layer involves arranging individuals into cross‑functional teams that concentrate on a particular component, enabling them to oversee the entire API lifecycle associated with that component. It is crucial to ensure the visibility of all components and their respective team owners by exploiting the Service Catalog within the Internal Developer Platform. This fosters collaboration across teams and facilitates the swift composition, creation, and enhancement of APIs in accordance with the business requirements.
The Open API Platform Approach
This is referred to as the Open API Platform approach, which comprises an API layer responsible for exposing APIs, a business logic layer where packed business components are created and composed to address specific partner needs, and a data management layer for collecting necessary data from underlying core systems. These three layers are backed by the Internal Developer Platform, which enables easy implementation and comprehensive management of the entire process, and by a Service Catalog, which enables composability and reuse while reducing the time‑to‑market of new services and applications.
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