Commercial insurance, at long last, is moving online.
Today’s business owners expect streamlined digital insurance purchasing options. Brokers, too, have long been in need of a more cost-effective way to sell small business policies - many of which become loss-makers after the hands-on effort that goes into quoting, binding and administration. But businesses and brokers alike have been stuck in outdated, offline processes for years.1
Meanwhile, small business insurance has grown into a $130B market in the United States. Insurance incumbents along with new Investors and entrepreneurs recognize this: InsurTech funding sky-rocketed to more than $15 billion in investments in 2021 to help fund the industry’s increasing digital transformation.
While this transition is underway, insurance carriers are still figuring out how to position themselves for a digital future. Many carriers have traditionally been resistant to digitization due to fear that easier price comparison may drive commoditization, making it harder to differentiate on their products and services. Still, you can’t stop innovation forever. Personal lines have gone digital. Now, commercial insurance is changing, too. Savvy carriers understand they can (and must!) turn digitization into an opportunity, not an existential threat.
At Herald, we’ve worked with many influential carriers that are embracing this change. One theme that unites our partners is that they are dedicated to finding ways to “meet their brokers wherever they do business.” They are establishing themselves as the go-to carriers for both traditional brokers and new distributors that are experimenting with creative, digital ways of working. There are plenty of differences to how these carriers operate and how they build and use their APIs, but the bottom line is these Insurance API Innovators are leading the charge.
We’ve created the Insurance API Index to recognize and track cutting-edge commercial carriers. We believe this list can also serve as a resource for other insurance ecosystem players: the Insurance API Index can tell brokers and technology providers which carriers are ready and willing to be collaborative partners in innovation.
A few observations on this first iteration of the index as it goes live today:
The five largest commercial insurers in the US, and 7 of the top 102 have made at least one commercial insurance product available via API.
As you move down the list, 12 of the country’s top 25 carriers are API-enabled. This is a major evolution from just a few years ago, and many carriers still have work to do!
All in all, the Index features 98 commercial products available from 37 different carriers. Included among those are well-known incumbents like CNA and Markel. InsurTechs also make a strong showing on the list. Rotem Iram, CEO of At-Bay, shares:
“We’ve invested heavily in our API, which has come to drive a meaningful portion of our business and allowed us to quickly build partnerships that we otherwise simply wouldn’t have.”
These innovative carriers recognize that online distribution is not just a marketable edge case - it can drive significant premium volume. A number of these insurers have already made substantial investment in digitization as a core growth strategy. EMPLOYERS, for example, already generates over 50% of its submission and quote volume via API.3 “We continue to see innovation in how insurance is distributed,” says Basilios Manousogiannakis, Director of Digital & Direct Channels at EMPLOYERS:
“It’s our mission to always be at the forefront of making insurance products more available to businesses and making our broker partners even more efficient.”
Simply put, there are a number of ways to succeed in small business insurance’s digital future, and a growing list of innovative players are hard at work creating and updating new models for the 21st century commercial carrier.
As this growth continues, we are committed to continually evolving and updating the Insurance API Index, to make it the best possible resource for everyone in the industry. If you are a carrier or MGA enabling connectivity via API, please contact us to be included in this list. We’d love to hear from you and we’d love for others in the industry to know what you’re building.
At Herald, we’re building a new infrastructure for commercial insurance. We are empowering carriers to deliver on their vision of becoming digital innovators. Our API platform provides a single point of connectivity from which carriers seamlessly and cost-effectively reach their full distribution ecosystem. We’re integration experts with a laser-focus on building API infrastructure and expanding the digital reach of carriers we support.
If you are a broker or technology provider looking to engage with your carrier partners via API, contact us to learn how we can help you connect to carriers that matter to you and dramatically accelerate your product development timelines.
If you’re just interested in learning more about Herald, visit our website or feel free to email us at hello@heraldapi.com. Follow us on Twitter and LinkedIn to stay up to date. And to join us on our journey, visit our Careers page.
Finally, if you haven’t already gone to see the thing this whole blog is about, check out the Insurance API Index itself.
1 For more detail on the current insurance purchasing process and our vision for its future, read this from our seed funding announcement
2 Via NAIC’s 2020 Market Share Report
3 “The Future of Insurance: From Disruption to Evolution: Volume I. The Incumbents”, Bryan Falchuk