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In three short years, AI has fundamentally reshaped what’s possible in operations. So why are so many leaders still defaulting to BPO?
Outsourcing once made sense as a way to gain efficiencies without adding headcount. However, today, there’s a faster, more flexible and more cost-effective alternative.
Four Fundamental Truths About AI Today
- AI is here to stay. The rise of AI is akin to the technological revolution caused by the internet. Now that the genie is out of the bottle, there’s no going back. Hopefully by now we have all realized it is way more powerful than RPA, or some of the other technologies Operations leaders were excited about in the last decade.
- Today’s AI is the weakest it’s going to be– and it’s still pretty darn good! AI can already do a lot, and the exponential rate of progress means that it is getting better by the week!
- Any well-documented process that is offshored is a good candidate for automation with AI. It’s not a question of capability anymore. If a team in another country can replicate your process, AI can do it do. It’s just a matter of intent and execution.
- AI can drive significant efficiency, scale and consistency. For growing companies, it’s essential to nail all three.
When you put all of this together, it’s clear that AI is the path forward… but there’s still resistance among some operational leaders who cling to the use of BPOs.
Three Common Arguments
1. Why abandon BPOs when they’ve worked in the past?
It’s more like BPOs worked well enough in the past. When companies had no other options, BPOs worked in a pinch, but they were never without problems. As companies grew, BPO costs would increase, and distance could make consistency, supervision, and ownership difficult. AI solves these challenges.
2. Why don’t we outsource first and then automate?
This is essentially a way to delay the inevitable, but it makes things far more complicated than they should be. With this route, you have to break up a process, send parts of the process offshore, and then automate parts of it – that’s a lot more convoluted than just adopting AI from the get-go, aiming to automate the process end-to-end and enjoying the efficiency boost immediately.
3. Don’t we need humans in the loop?
This depends on what you’re automating and who you’re automating with. Right now, you can’t automate new business intake for a middle market policy with high confidence, but AI is advancing quickly, and it is a matter of time before it can handle this with high confidence. In the meantime, agentic AI can handle a lot of tasks, like handling a service request (e.g., Certificate of Insurance), or taking in a simple First Notice of Loss, with high accuracy and confidence.
The key to success is to work with a company that is on the forefront of automating insurance processes with AI and that is leveraging the latest updates, not just every year or quarter, but on a weekly basis. That’s how quickly AI is progressing.
Also work with a company where trust is built and wired into the system. Automating a process once is reasonably easy with AI, but maintaining production-grade quality consistently with no hallucinations or deviation from the guardrails requires a platform that is constantly investing in maintaining high standards with evals and audits.
Are You Missing Your Chance to Lead the Shift?
The BPO model had its moment, but the next era is already here.
COOs have a unique opportunity to lead the charge with AI deployment and adoption, but the window won’t stay open for long. AI adoption is happening fast, and those who don’t act quickly will miss out on the chance to act as a leader of change.
Any high-volume, offshored or resource-intensive process can now be automated with AI.
Start with your service volume, FNOL, claims status inquiries, and support for new business and renewals. Then, take the leap. If you’re still not sure, run a pilot to compare AI and your BPO side by side on the same workflow and let the performance speak for itself.
The results will quickly show when you can gain a meaningful competitive advantage, both in the market and within your organization, by leading the charge on AI.
Who Can You Trust?
Liberate is the most trusted and reliable AI system of action for insurance sales, service and claims. The Liberate platform is purpose-built for insurance and already trusted by 65+ operations and claims leaders across leading carriers, brokers, and TPAs.
