Insurance as a Service (IaaS): Would Open APIs replace E-Commerce strategies in Insurance? The case of Lemonade API

Lemonade_Open_API

In the last years the insurance industry is facing major challenges and digital transformations where startups are playing theirs roles on facilitating such a process.

Lemonade, one of the most famous Insurtech, with the launch of Lemonade API it has just made another step beyond its ambition to rethink the entire insurance industry.

What Lemonade wants to achieve with its Lemonade API is re-designing insurances into an Insurance as a Service (IaaS) business model.

In practice, an API (Application Programming Interface) is an interface where any other business, mobile APP or website, can access to get a specific service. In the case of Lemonade API, the service provided is an insurance.

Lemonade Widget

With Lemonade Widget, any website can thus provide to users the service of issuing a home insurance. For example, from a Real Estate Comparison website, once the user has chosen its house to buy or to rent, then it can buy a coverage directly by clicking the button Add_Insurance.

Similarly, imagine to buy a new brand TV, notebook or furniture for your home from an E-Commerce website. Maybe you want also to insure them from damages or theft. With such an API that can be done just when purchasing.

Widget

Lemonade Rest API

And what about adding insurance services to mobile APPs users? That can be done with Lemonade Rest API. After adding the interface to the code, the insurance service it will be available within the mobile APP.

For example, a user who is accessing to its Smart Security Mobile APP to check if everything is ok at its home, maybe it wants its stuff covered to feel more secure.

Similarly, there are many APPs helping people to manage personal finances and expenses. An insurance that cover with a fair price a valuable item just purchased could be the case, especially if it has been asked a loan.

Rest_API

Also Big Tech Giant Oracle is on the way of Open APIs

Open APIs is not only about insurance. Oracle one month ago has launched its API Banking solution aimed to support financial institution to deliver digital customer experiences, secure payments and an effective identity management against frauds.

Interesting to noticed that, as far as the API Baking service is charged according to the volume of the transactions, who can benefit of such a service are not only big financial institutions but also emerging fintech startup.

Insurance as it is: a service

Technology apart, Lemonade Open API is going to put insurance at the end of the value chain.

Life Insurance apart, the P&C segment is pulled by the numbers and the worth of the items owned. Whenever a consumer buy a house, TV or a new car, a need for a coverage exists. Putting an API just at the moment of purchasing is simply providing a more linear customer journey experience: why customers should buy an insurance by themselves after purchasing? Or why customers should rely on the insurance provided by lenders or car dealers?

Many big insurance companies have already established an E-Commerce channel within a digital strategy aimed to be more close to customers. But is really E-Commerce in insurance the right path towards a customer centricity?

Open APIs would thus enable open business ecosystems.

I’m very curious to see how Open APIs will transform (or not) insurance and financial industries in the next years.

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