Insurance as an API

There are moments that transform industries. Inflection points in which the future is less certain, yet everything feels newer. Insurers are in an industry that is undergoing one of these shifts right now. As technology invades a historically slow-moving industry, new possibilities are opening up and new opportunities are being presented. I believe that insurance is going through an “AWS Moment” as insurance products themselves become API-enabled.

The most widely-known use of API’s within insurance is for quoting. Online quoting has been the obsession of the industry ever since the pandemic started, for obvious reasons. The pandemic accelerated a long-term trend of consumers preferring to purchase online and interact with humans less. Very few insurance companies were prepared for this and it has become the #1 focus for many.

But Insurance as an API is a relatively new concept. It is the idea that not just quoting but the entire policy lifecycle is available for external consumption. A handful of pioneering companies are just starting to roll it out, with remarkable results. The companies realize that in order to be dominant in the next phase of the insurance industry, they have to relinquish control of the customer to the companies that already have them. Vetting partners is certainly important, but if you connect with the right partners the opportunities are enormous.

If you can expose Insurance as an API, you are effectively making your entire product–and the business processes behind it–available to the outside world to use. It is a foreign concept to many insurance companies at this point, yet it is widely understood and used in many other industries. Because of it, you can start to embed insurance throughout all kinds of consumer touch points and sell through all kinds of new channels ranging from software applications to supply chain distribution partnerships.

Insurance as an API allows third parties to use their unique data to deliver quotes within their own customer experience, and even provide an integrated buying experience. (This is more commonly known as “embedded insurance”) It allows coverage choices to be tailored based on the unique knowledge of the customer, who they are, and their risks.

Insurance as an API allows the servicing of a policy–including claims and billing–to start to use modern customer service tools: conversational AI, advanced call center systems, and marketing automation tools. This results in lower expenses, happier customers, and higher retention.

Insurance as an API allows for adjacent types of products to be easily incorporated into the customer experience. From specialized risk improvement to premium financing, the insurance “package” becomes more useful, easier to consume, and becomes more accessible to a wider range of customers.

But perhaps most importantly of all, Insurance as an API provides exponential speed. By packaging the product within easy-to-use API’s, companies are able to lean on partners and not exclusively on their own internal ability to craft the best customer experience and reach the entire market. Again, this is perhaps a foreign concept to most insurance companies, yet history has generally proven this to be a smart approach, and the first movers are benefiting from many opportunities not available to others.

All of these things are not guesses–these are the same dynamics that have played out over and over in different areas. When Amazon launched AWS, for example, the entire hosting and development industries saw these benefits, and the entire industry had to react. We’re now in the process of experiencing an industry-wide shift to ensure that all business processes are supported by APIs, and easy to consume by whichever partners need to use them. The ability to play in this arena will determine who wins and loses for the next several decades.


3 Breakout Technologies for 2021

I spent some time thinking about broader trends over the new year, and came up with some predictions for breakout technology in 2021. Writing always helps me clarify my thoughts, so thanks for reading and please let me know what you think!

A little enterprise-y probably but you get what you pay for. And a little surprise in the middle!


Obviously cryptocurrencies are mooning right now, which is going to throw more focus on not just Bitcoin and Ethereum but on blockchain technology in general. And it has come a long way since the last bull cycle.

Since the last parabolic rise in cryptocurrency in 2017, and the subsequent crash, blockchains sort of faded from the mainstream zeitgeist. But the use cases have evolved and the technology matured. And to this day, most people still know blockchain mostly as the thing that Bitcoin sits on top of, but blockchains now support an exploding shadow world of completely digital financial products.

Besides Bitcoin, which recently crossed half a trillion dollars in market cap, blockchains also power Ethereum, and some other blockchains such as Decred and Polkadot. Ethereum in particular has flourished as a hotbed of innovation for #DeFi (Decentralized Finance) which automates many of the functions of a traditional financial system but on a blockchain. People are using blockchains to create powerful incentive alignment systems. Blockchains make money programmable. And that is leading to a shadow reinvention of many of the structures that we’re used to, but with incentive-laden twists. You can now farm yields automatically, deposit money into smart contracts that provide liquidity in various asset classes, own a fractional share of a virtual hedge fund, and securitize just about anything into a tradable, liquid asset.

Going forward there’s a good chance that blockchains will revolutionize the way we think of ownership and require a new type of economy. You can already see it happening, as people are now comfortable with the idea of owning a fraction of a bitcoin and a fraction of DeFi entities which exist merely as smart contracts. Most central banks have already announced exploratory projects (at minimum) with digital currencies. And this will allow central banks to become involved in not just monetary but fiscal policy, surgically injecting stimulus into very specific parts of the economy. If everyone has a digital wallet, central banks will finally be able to deliver money directly to individuals. Bitcoin will likely become the best collateral in the world and Ethereum most likely the engine that the transaction layer runs on.

Artificial Intelligence (Guest post)

Artificial intelligence is still in its infancy, but the rate of development is stunning. As the Internet became a thing, it took decades for it to evolve into the ubiquitous technology that it is today. But as soon as it became possible to create machines that could learn from experience, progress exploded. AI now exists in almost every consumer product, and even the most common chatbots are good enough to make them useful.

There are a few different ways to measure AI’s progress. There’s progress in the technology itself, which has gotten much better at specific tasks. There’s progress in the number of things that AI can do, which has expanded rapidly. And there’s progress in the quality of AI, which is measured by how well AI does things that we used to think only humans could do.

As AI technology gets better, we’ll see it in more and more places. The more that AI is involved in our lives, the more we’ll be able to trust it to do things for us. The Internet of things will get smarter, and we’ll get better data from our devices. The data we get from our devices will help us make better decisions, and this will lead to more automated decision-making. The first areas to be automated will be simple, repetitive tasks, like customer service.

Ready for the surprise? The above paragraphs (everything under artificial intelligence up to this paragraph) were actually written by artificial intelligence. You can see a video of it being written below. (OpenAI’s GTP3 Da Vinci engine if you’re curious.) Unedited, straight from the mind of the machine. This technology is shockingly good now, and it will make a lot of jobs obsolete.

That’s an AI algorithm writing an opinion about AI as technology

Company API’s

API’s have followed an adoption trajectory very much like Web sites. Initially they were incredibly expensive and only the biggest companies had them. After a while it became a requirement to be a respectable mid-sized company. Then smaller companies got on board, and now everyone has one.

API’s are very much the same way. The adoption curve of API’s provided by companies for consumption by the outside world is still nascent, but it enables everything else:

  • If your company has an API it can be used to build apps and share data with partners, its main use case today. But also…
  • If your company has an API it can support artificial intelligence “employees” for many if not most of the tasks that are staffed by cubicle farms of people today (zoom farms?)
  • If your company has an API it can participate in the blockchain economy through integrations with purpose-built blockchains and oracles (trusted data providers for blockchains)

And most importantly, API’s support cross-organization connected workflows, which are a necessity in the digitized post-COVID world. If you can’t talk to the outside world you cannot participate in the e-commerce and online economy, which may be the only economy functioning for the near future.

I already see a rush within the insurance industry to stand up API’s because the market is demanding flexibility and connectivity. From talking to folks in other industries it appears that the same thing is happening elsewhere as well.

That’s it, my guess for the tech that is set to break out this year. We’ll see how I do!