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WHITEPAPER
Outsourcing is Dead,
Long Live Insourcing to AI
For decades, outsourcing has been a popular strategy for re/insurers to cut costs and improve service. However, we fundamentally question if traditional BPO is still a valid model in the age of AI and more importantly, does it risk becoming a strategic drag on your business as others automate and enhance their business with AI?
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The trouble with traditional outsourcing
Race to the bottom
Intense competition means high SG&A cost and less margin to hire top talent and to train them well. Increased work pressure leads to low morale, high attrition, and poor accuracy / knowledge level.
Misaligned incentives
Outsourcers often lack top tech talent to build good AI and their commercial incentives and management KPI are to keep billed headcount high.
While outsourcing has been tactically effective in delivering cost savings and scaling the workforce, several macro and strategic challenges are making it less appealing:
Strategic limitations
Traditional BPO has inherent limitations in cost reduction, speed, and process improvement compared to AI-driven solutions.
Draining organizational knowledge
Over-reliance on BPOs can drain internal knowledge and create dependency on vendors.
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The case for insourcing to AI
The BPO industry's macro trends are unlikely to improve, with increasing geopolitical tensions and cybersecurity risks adding to the pressure. AI adoption in insurance is growing and AI-enabled processes will soon become essential for competitiveness.
Navigating the shift to AI
To successfully transition to AI-driven processes, insurers should consider the following:
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Take an AI-first approach: Reimagine processes for full autonomy, similar to how self-driving cars were developed.
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Take a platform approach: Build applications across the process chain to enable seamless integration and machine learning.
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Work with an insurance-native platform: Choose a platform designed for insurance-specific language, documents, and processes.
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Choose the right partners: Select partners who can design AI-first solutions, allow you to own your IP, and provide access to feedback and training systems.
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Plan the journey: Implement AI incrementally, starting with simple processes and gradually moving towards full automation.
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BluePond AI is your partner to insource complex operations to AI
BluePond AI is a game-changer for AI-driven P&C operations transformation.
Founded by insurance veterans with a passion for innovation and AI expertise, we understand the complexities and nuances of re/insurance.
Our P&C CoPilot is a GenAI-driven platform that is designed to automate complex insurance processes from distribution to underwriting and claims. It enables human-like understanding of insurance language, a high degree of automation and accuracy in data extraction from complex documents and comes with predefined commercial P&C workflows. It has successfully automated complex operations for insurance, underwriting, claims, and broking for leading firms in the industry.
We put real skin in the game to deliver transformative results. We work in partnership with you to automate your specific business processes, charge no implementation fees, and you only pay once you start to see results.
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