Outsourcing has made sense for insurance businesses for a long time. When the only way to deal with more operational work was to add more people, BPOs gave companies a way to access that capacity at a lower cost. But that isn’t the only option anymore.
Automation can now take on many of the repetitive, process-led workflows that have traditionally been outsourced — without requiring you to rip out systems, redesign your processes or switch off your existing BPO before you know it works. That changes the economics quite significantly.
At Unitary, we typically see customers reduce the cost of delivering a workflow by around 50%, with the first process live in weeks rather than months. More importantly, you can prove those numbers on your own operation before making a bigger change.
Why insurance companies outsourced this work in the first place
Insurance operations involve a huge amount of repetitive work. Submission intake, policy servicing, claims intake, loss runs, bordereaux, reporting — individually, these tasks can seem fairly straightforward. At scale, they consume thousands of hours.
And historically, there were only really two options: hire more people internally or outsource the work. For many firms, outsourcing was the obvious choice. A BPO could provide trained people at a lower cost than building the same team internally. That model still works.
The more useful question today is whether it is still the most efficient way to get the work done.
4 signs your BPO relationship has peaked
There tends to be a point where outsourcing stops delivering the same gains it did at the beginning.
You usually start to see a few things happening.
1. Your costs keep rising with your volume
A BPO is ultimately a people model. If your workload increases significantly, the number of people needed to process it generally increases too. That means growth in the business usually means growth in the BPO bill. There is only so far labour arbitrage can take you.
2. Your own team is still spending time checking the work
Outsourcing the processing doesn’t always remove the work entirely. Someone internally may still need to sample outputs, deal with exceptions, correct mistakes, answer questions and manage the provider.
Those costs don’t always appear on the BPO invoice, but they are still costs.
3. Staff turnover affects quality
Insurance processes contain a surprising amount of context. There are different products, carriers, wordings, systems and exceptions to learn. When experienced people leave the outsourced team, some of that knowledge leaves with them and new people need to be trained.
4. Your busiest periods are when performance is hardest to maintain
The moments when you need the most capacity are often the hardest ones to staff. Renewal season, catastrophe events or unexpected spikes in volume can quickly create queues because there are still only so many people available to process the work.
None of this means BPOs are bad. It is simply a consequence of using people as the unit of capacity.
Automation gives you another option.
What actually replaces the BPO work?
When I talk about automation here, I don’t mean giving your team another piece of software to configure or an AI assistant that helps them complete individual tasks.
At Unitary, we build Virtual Agents: software workers that carry out workflows from beginning to end. They log into the same systems your team already uses — your policy administration system, CRM, carrier portals, email and other tools — using standard user credentials. They can open documents, extract information, check it against your rules, move data between systems, complete actions and produce the required output.
Most of that execution is handled by deterministic software because, wherever possible, we want the same input to produce the same reliable result. We use AI where it is genuinely useful: for example, understanding an unstructured document, interpreting language or dealing with variation that traditional rules struggle with. And when something falls outside the parameters we have agreed, it goes to a human.
So you aren’t replacing every person with AI. You are automating the repeatable execution and keeping people focused on the exceptions, decisions and relationships where their judgement actually matters.
BPO vs Virtual Agents: an honest comparison
The biggest difference is what you are paying for.
With a BPO, you are generally buying capacity. With automation, you are buying the completed work.
There are also plenty of things I would not automate. Negotiation, relationship management, highly subjective decision-making and genuinely expert work should continue to sit with people. The opportunity is in everything surrounding that work.
You don’t need to replace your BPO overnight
This is probably the biggest misconception I hear. Moving from outsourcing to automation does not need to be a big-bang transformation. In fact, I wouldn’t recommend doing it that way.
Start with one workflow, and keep your existing arrangement running and automate the same process alongside it.
Now you can compare the two using your own numbers:
- How much does each transaction cost?
- How quickly is the work completed?
- What proportion requires human intervention?
- How accurate is it?
- What happens when volumes increase?
If the automation doesn’t perform, you haven’t disrupted the existing operation. If it does perform, you have real evidence to support expanding it.
That is a much easier decision to make than signing a multi-year transformation programme based on a business case.
What the transition can look like
A typical first 90 days might look something like this.
First: choose one workflow
Don’t try to automate a whole department. Find a process that is high-volume, repetitive and expensive today.
For an insurer, broker or MGA, that could be submission intake, loss runs, COIs and endorsements, FNOL intake, bordereaux or another operational process. Work out what it really costs today, including any internal QA and exception handling. That gives you a baseline.
Then: build and test it
We map how the workflow actually operates, build the Virtual Agent and test it using the same systems and data your team works with today. There is no separate integration programme and no requirement to redesign the process first.
Run both approaches alongside each other
Once the automation is working, compare it with the existing operation. This is where the conversation stops being theoretical.
You can see the actual cost, turnaround time, accuracy and exception rate on your own workflow.
Expand when the numbers make sense
If the first workflow performs well, you can gradually reduce the amount of work being sent to the BPO and move onto the next use case.
You don’t need to commit to replacing everything at once. You earn the right to automate more by proving that the previous workflow works.
What happens to your internal team?
One concern I sometimes hear is that bringing work back from a BPO sounds like bringing all of the admin back too. It shouldn’t. The point is to bring the ownership of the process back, not the manual processing.
The repetitive work is handled by the Virtual Agent. Your team deals with the cases that actually require expertise.
For brokers, for example, that means less time re-keying information or chasing routine administrative tasks and more time advising clients, building relationships and placing complex risks. That can affect the customer experience as much as the cost base.
One of our customers, Attune, saw a 19% increase in broker satisfaction after automating operational work, alongside a reduction in processing costs.
As their Director of Operations Program Management, Niccos Andrade-Cordova, put it:
“With Unitary, we're building the foundations we need to set the company up for growth.”
When automation isn't the answer
There are situations where I would recommend sticking with a BPO. If the work genuinely relies on judgement, negotiation or relationships, there may be relatively little benefit in automating it.
There can also be additional technical work involved where processes depend entirely on legacy, on-premise systems that cannot be accessed through a browser or VPN.
Those aren't reasons to avoid automation entirely, they're reasons to choose the right processes.
The best candidates tend to be the workflows that are repetitive, high-volume, rules-led and currently require people to move information between documents and systems.
Start with the numbers
If you're considering changing your BPO model, I wouldn't start by asking whether you should replace the whole thing.
Start much smaller: Pick one workflow, work out what it costs you today, then see whether automation can deliver that same workflow faster, more accurately and at a lower cost.
If it can't, don't expand it. If it can, you've got a much stronger case for what to do next.
That's ultimately how I think companies should approach automation generally: prove it works first, then scale it.
Frequently asked questions
Can AI replace a BPO for insurance back-office work?
For process-led work, yes. Submissions intake, policy servicing, COIs and endorsements, loss runs, claims intake, bordereaux and compliance reporting can all be executed end-to-end by Virtual Agents inside your existing systems, with automation rates of 70–99% on complex multi-step processes. Judgement-led and relationship-led work stays with people.
How much does replacing a BPO with automation cost?
With Unitary there is no upfront cost — no implementation or setup fees. Pricing is outcome-based and you pay only once a workflow is live and delivering. Customers typically see around a 50% cost reduction from day one against their existing cost of delivery.
How long does it take to switch?
The first workflow goes live in four weeks, with roughly one day of involvement from your team. Most firms then run Virtual Agents in parallel with their existing provider for a period before stepping down outsourced volume.
Do we need to integrate our systems?
No. Virtual Agents log into your existing web-based and VPN-accessible systems with standard user credentials — PAS, CRM, carrier portals, email — so there's no API integration, no migration and no IT project. On-premise thick-client environments need additional setup.
How is this different from RPA?
RPA follows fixed scripts and breaks when a portal, template or form changes, and it can't interpret unstructured documents. Virtual Agents execute deterministically like software but use AI, within a pre-approved set of actions, to handle document interpretation, variation and edge cases — so they run whole workflows rather than isolated steps.
How do you guarantee accuracy if AI is involved?
Execution is deterministic software; AI only assists on decisions you've approved in advance. When confidence is low the work escalates to Unitary specialists, every action is logged in a full audit trail, and human-level accuracy is contractually guaranteed across the entire workload. Unitary is SOC 2 Type II and ISO 27001 certified.
What happens to our existing BPO contract?
Nothing, until you decide otherwise. The recommended sequence is to run one workflow in parallel, compare on your own numbers, and only then reduce outsourced scope in line with your contract terms.
Sasha Haco is CEO and co-founder of Unitary, which builds Virtual Agents that automate complex back-office workflows for insurance brokers, MGAs and carriers. Unitary is SOC 2 Type II and ISO 27001 certified, a BIBA associate member, and backed by a $15M Series A from Creandum, Paladin Capital Group and Plural.
