The insurance industry is spending heavily on AI, analytics and cloud infrastructure, but Jay Sarzen argues many carriers are still underestimating the simpler layer that determines whether any of it works: the application programming interfaces that move data in and out of the core system.
Sarzen, an insurance analyst at Conning, does not describe APIs as a glamorous technology. He describes them as a hard stop. If a core system cannot connect to brokers, agents and third-party data sources, the rest of the transformation agenda becomes harder to deliver. Faster quotes, better underwriting and more intuitive workflows all depend on whether the carrier can ingest, interpret and act on outside data.
“I’m always going to default to API integration,” Sarzen said. “If you don’t have that, you can’t connect with your brokers and agents very well. You can’t connect with your third-party data sources.”
That makes APIs less a technical feature than a business capability. The C-suite question is not whether the system has a long list of functions. It is whether the architecture lets the carrier plug into the market around it.
Sarzen said the traditional approach to evaluating core systems often focused on feature and function. That still matters. But in a market where insurers increasingly need external property data, vehicle data, geospatial data, broker connectivity and claims documentation, the more important test is whether the platform is open enough to use those inputs without creating a new integration problem each time.
“If a core system did not have robust APIs, if they weren’t open, they weren’t able to bring in data from all types of third-party sources, then it really wasn’t going to be that effective of a core system,” he said.
The point aligns with the broader direction of insurance technology strategy. McKinsey argued in 2025 that P&C core systems built for a slower, paper-driven model are no longer fit for purpose for carriers trying to deliver real-time responsiveness, including instant quotes and faster claims payouts. Deloitte’s 2026 global insurance outlook makes the same plumbing argument in AI terms: insurers should prioritize data quality, integration and master data management to support a unified customer view and real-time data processing.
That is why API capability belongs in the boardroom discussion. It determines whether a carrier can connect to the ecosystem it now depends on.
Sarzen said insurers should think about two customer groups: the insured and the agent. Both increasingly expect speed, clarity and fewer workarounds.
For insureds, the expectation starts at the first quote. A customer seeking auto, homeowners or small commercial coverage does not want an approximate answer followed by manual follow-up. They want a clear quote, an efficient bind process and transparent service when a claim occurs.
“If you’re going to interact with a consumer at any point, it needs to be intuitive, it needs to be easy, it needs to be streamlined, it needs to be transparent,” Sarzen said.
For agents and brokers, the issue is whether the carrier can connect into the workflows where business is placed. If the core system cannot connect well with broker partners, Sarzen said, the carrier loses speed and ease of doing business. The harder it is to access, quote, bind or service a policy, the more friction the carrier creates for the people distributing it.
Sarzen connects the API question directly to cloud architecture. On-premise systems made sense when insurers largely worked with their own internal data. That is no longer the operating model. No insurer, he said, has all the data it needs inside its own walls to deliver accurate, customized quotes quickly.
At minimum, he said, systems need to be cloud-ready or SaaS-capable. Ideally, they are cloud-native because the work increasingly depends on third-party providers that sit outside the carrier’s walls.
“No insurer has the amount of data, they don’t have the variations of data that are going to be required to deliver the kinds of experiences where you’re going to be able to deliver a customized, accurate quote in a very quick period of time,” Sarzen said.
That is the quiet API test behind insurance transformation. AI may dominate the sales pitch, but the business value depends on whether the carrier can move data cleanly enough for the tool to act on it. APIs are not the headline technology. They are the connective tissue that lets the headline technology produce anything useful.
