Insurance API
 min read

Why Insurance Carriers are Adopting Connected Insurance

Published on
April 9, 2024
Tolga Tezel

Founder and CEO

It started in banking with Finicity, Plaid and Yodlee. Now it’s insurance’s turn. A new era of individual data rights driven by evolving consumer expectations and regulations. 

Savvy consumers quickly realized the value of their information to organize their financial lives. They played key roles in growing Venmo, TurboTax, and bank verifications.

Today, more than one in three adults in the U.S. use such products to pay rent, split bills, and more.

Consumers want the same value and convenience in all facets of their lives. These frictionless experiences are an expectation, not a luxury. Companies that invest in connected technologies will thrive as consumers flock to digital-first experiences. Those that don't will wither, shackled by the status quo.

Insurance agencies quickly embraced this technology. Consumers loved the convenience. Agents loved its impact on all aspects of their business.

Next came mortgage lenders and car dealerships. Verifying insurance more quickly allowed them to reduce acquisition costs and focus on the true value-add opportunities in their sales process.

Insurance carriers have an opportunity today. A wealth of benefits await that go beyond reducing operational and servicing costs.

Reduce Costs

American businesses waste millions of hours each year verifying insurance.

General contractors must track their subcontractors to meet contract demands. The larger the project, the more policies they need to track. All through manual processes.

Rideshare and delivery platforms verify insurance to build trust with their customers and to protect their drivers.

Mortgage lenders, car dealerships, financial planners, and personal injury attorneys all need insurance verification in their workflows. This burdens agents and call centers with hundreds of millions of phone calls each year—phone calls that take away from revenue-generating opportunities.

Consumer-permissioned technology empowers consumers to self-serve. They can securely transmit their policy details to whoever needs it. No call center or agent is required. 

Third-party verifiers can ‌keep policies compliant with ease. Automated workflows allow policyholders to make changes from the comfort of their home or on the go. These processes aren't only faster, but more accurate thanks to the power of APIs.

Imagine a world where employees spend most of their time selling. That’s the promise of consumer-permissioned technology.

Increase Policy Value

With consumer-permissioned data, carrier-appointed agents can position themselves as their clients' trusted insurance advisors. They can jump into value-driven sales conversations right away, backed by verified information.

Agents don't need to interrogate prospects with a back-and-forth call to gain visibility of their situation. Instead, the consumer authorizes sharing their information in less than 20 seconds. Complete and verified data is instantly available in the agent's dashboard. Agents can immediately discuss insurance coverage, cars, properties, and other insured assets in real-time. This allows agents to address coverage gaps during prospecting and renewal, and educate the prospect on how they could be better protected. 

Agencies leveraging this data-driven approach have witnessed boosts in bind rates (up to an 80% increase) and larger account sizes. This is attributed to the streamlined, secure process for insureds and the comprehensive, verified insurance data readily available to agents. 

Improve Retention

Nearly 76% of consumers shop online, and they expect every purchase journey, including insurance, to be a seamless, one-click experience. Today's consumers crave convenience and wouldn't dream of "corresponding" for simple tasks like bill payments or subscription updates.

While most insurance carriers offer online portals for managing policies, consumer-permissioned data takes it a step further by making online servicing capabilities available from within partner experiences. 

Carriers can incorporate their services into other businesses their customers use—paving the way for easy upsells. 

Consumer-permissioned data streamlines policy management for both parties. Carriers can easily reach policyholders for renewals or urgent payments (avoiding cancellations), while policyholders can manage their insurance with ease. This shift removes the friction previously associated with these tasks, making them painless for everyone involved.

This method of prioritizing customer experience has led to a significant increase in book retention, with some carriers reporting up to a 30% jump. Consumers simply won't tolerate outdated ways of doing business. They'll choose and remain loyal to companies that prioritize a hassle-free digital experience.

Generate Tailored Opportunities

Consumer-permissioned insurance data helps insurers capture opportunities to tailor existing insurance policies at the point of sale.

For example, a buyer at an auto dealership needs insurance to take their new vehicle off the lot. At the point of sale, the car buyer sees a preview of adding the new vehicle to their policy. They authorize the change, get the new vehicle covered in seconds, and drive off with their new car. 

When carriers work more closely with their partners, they can create better options for their customers—making it easier for customers to have tailored policies that match the changes in their lives. 

Prioritize Security

Security breaches can be devastating—years of goodwill destroyed in the blink of an eye. The more there are, the more onerous regulations become. Our technology helps secure your data—for free.

Downloaded PDF’s live everywhere. Their usage can’t be tracked across various systems. There’s simply no reliable way to trace and revoke access to that data. Data that, if it fell into the wrong hands, could lead to fraud.

Getting with the Times

Consumer-permissioned data is already mainstream in the banking and finance world—it's on pace to be fully embraced in insurance over the next few years.

The carriers that choose to embrace consumer-permissioned data will be rewarded with loyal policyholders and growth partners. Early movers unlock cost savings, retention, growth, and network effects that draw in and retain more customers.

Businesses that are slow to adopt these new technologies will find themselves desperately playing catch-up—in a time and generation that isn’t forgiving of any user inconvenience. 

Learn more about how Canopy Connect can open up possibilities for insurance carriers.