Regure vs Claims BPO: Automate in-house vs outsource offshore
Claims BPO (Business Process Outsourcing) means sending your operations offshore to lower-cost labor markets. You lose control, quality varies, data security risk increases, and you're still paying per-claim fees that scale linearly with volume. Regure automates instead of outsourcing — you keep control, quality is consistent, data stays secure, and costs flatten as volume grows.
Understanding the difference: outsourcing labor vs automating workflows
Claims BPO providers (Sedgwick, Gallagher Bassett, Crawford, Broadspire, plus offshore vendors in India, Philippines, Eastern Europe) handle claims processing tasks on behalf of insurance organizations — document intake, data entry, first notice of loss (FNOL) processing, routine adjuster tasks. The value proposition: lower per-hour labor costs by moving work offshore where wages are 30-60% lower than US/UK/Australia. You pay per claim or per hour processed.
The hidden trade-offs: you lose direct control over claims operations (BPO staff report to BPO management, not yours), quality varies with BPO staff turnover (industry average 25-40% annually offshore), data security risk increases (sensitive claim information processed outside your direct oversight), and costs scale linearly — every additional claim costs the same per-claim fee. BPO reduces labor cost per claim but doesn't eliminate it.
Regure takes the opposite approach: automate workflows instead of outsourcing them. AI handles document classification (eliminating manual labor), workflow engines route claims automatically (eliminating manual triage), claim-linked collaboration keeps your team coordinated (eliminating communication overhead). You pay per-user monthly subscription regardless of claim volume — costs flatten as volume grows. You maintain control, data stays in-house, and quality is consistently algorithmic rather than variable human performance.
Feature-by-feature: outsourcing vs automation
BPO and automation both reduce in-house labor requirements, but through fundamentally different approaches with different trade-offs.
| Capability | Claims BPO (Outsourcing) | Regure (Automation) |
|---|---|---|
| Cost Model | Per-claim or per-hour fees: $50-150 per claim for routine processing, $25-60/hour for FTE-equivalent offshore staffing. Costs scale linearly with claim volume. | Per-user subscription: $75-225/user/month flat rate regardless of claim volume. Costs independent of volume — same price for 100 or 1,000 claims/month. |
| Cost Scalability | Linear: 2x claims = 2x costs. No economies of scale — every additional claim costs the same per-claim fee. Volume growth means proportional cost growth. | Non-linear: same monthly cost whether processing 100 or 10,000 claims. Marginal cost per additional claim approaches zero. Volume growth = efficiency gain, not cost increase. |
| Break-Even Analysis | Cost-effective at low volumes: under 200 claims/month, $50/claim BPO ($10K monthly) may be cheaper than building in-house team. Above that threshold, costs compound. | Cost-effective at scale: 5-person team ($4.5K-13.5K monthly) handles 500+ claims/month. At 500 claims, per-claim cost = $9-27 vs BPO $50-150. Savings grow with volume. |
| Operational Control | Low: BPO staff work for BPO company, not yours. You set SLAs and review quality metrics, but don't directly manage daily work. Process changes require BPO contract amendments. | High: your team uses Regure tools directly. You configure workflows, modify processes, adjust priorities in real-time without external approval or contract renegotiation. |
| Data Security & Compliance | Higher risk: claim data (including PHI, PII, financial information) transmitted to BPO third-party, processed on their systems, accessed by their offshore staff. Compliance responsibility shared. | Lower risk: data stays within your tenant, processed on your infrastructure, accessed only by your authorized users. Full compliance control — no third-party data sharing. |
| Quality Consistency | Variable: depends on BPO staff training, experience, motivation. Offshore turnover 25-40% annually means constant retraining. Quality metrics average 85-95% accuracy with human processing. | Consistent: AI classification delivers 99%+ accuracy without variation. Algorithmic automation doesn't have bad days, doesn't need retraining after turnover, performs identically at 8am and 8pm. |
| Processing Speed | Batch processing: claims sent to BPO in batches, processed during BPO business hours (often different timezone), returned 8-24 hours later. Urgent claims require expedite fees. | Real-time: document classification in under 2 seconds, workflow routing instant, status updates immediate. No batch delays, no timezone dependencies, no expedite fees. |
| Business Hours Coverage | 24/7 possible with offshore BPO (timezone arbitrage advantage) — but requires paying for continuous staffing coverage, often with premium pricing for night/weekend shifts. | 24/7 automated: AI and workflow engines operate continuously without staffing costs. Same flat monthly fee regardless of when claims arrive or when processing occurs. |
| Transparency & Visibility | Limited: BPO provides SLA reports and quality metrics, but you don't see real-time processing status. Claims enter "black box" at BPO, emerge when complete. Limited visibility into workflow. | Complete: real-time dashboard showing exactly where every claim is in workflow, which documents are being processed, which rules triggered routing, which SLAs are at risk. |
| Institutional Knowledge | Lost: BPO staff build expertise in your claims, then leave (25-40% annual turnover). Knowledge walks out door. You depend on BPO training new staff repeatedly. | Retained: your team develops expertise using Regure tools. When staff turn over, replacement inherits complete claim history in system — no knowledge loss. Workflows documented in configuration, not human memory. |
| Process Customization | Rigid: BPO offers standard processes optimized for their efficiency across multiple clients. Custom workflows require contract amendments, change orders, setup fees, ongoing premium pricing. | Flexible: visual workflow builder lets you configure processes specific to your organization. Changes deploy in hours without contract negotiation or change fees. |
| Customer Experience Impact | Indirect: claimants interact with BPO staff who may lack deep company/product knowledge. Brand experience diluted — "I called my insurance company and got routed to a call center offshore." | Direct: your staff interact with claimants using Regure tools to work faster. Brand experience maintained — customers work with your team, elevated by automation, not outsourced to third-party. |
| Contract Lock-In | High: BPO contracts typically 2-3 year terms with minimum volume commitments, early termination penalties, transition-out fees. Switching costs significant. | Low: monthly subscription with no long-term contracts, no minimum commitments, no termination penalties. Cancel anytime (though you'd need alternative for operations). |
| Scope Expansion | Linear cost: expanding BPO scope (add document types, cover new claim lines, increase SLA speed) requires renegotiating per-claim fees upward. Each expansion costs more. | Included: adding document types, configuring new workflows, expanding coverage lines — all included in flat subscription. Scope expansion doesn't increase per-user cost. |
| Team Collaboration | Fragmented: your internal team collaborates separately from BPO team. Coordination happens via email, status calls, shared spreadsheets. Information silos between in-house and outsourced staff. | Unified: your team collaborates in Regure with claim-linked messaging, shared workflows, unified visibility. No internal/external divide — all authorized users have consistent tooling and context. |
| Audit Trails | BPO-provided: you receive reports showing what BPO processed, but audit trail is in BPO systems. For regulatory audit, you request reports from BPO — you don't control audit data directly. | Direct control: immutable Merkle tree audit trails in your tenant. For regulatory examination, you export audit data directly without BPO intermediary. Full compliance ownership. |
| Implementation Timeline | 2-4 months: BPO sales process, contract negotiation, process documentation, BPO staff training on your workflows, pilot batches, ramp-up to full volume. | 14 days: standard deployment with insurance workflows pre-configured. Your team trains on Regure tools, workflows configured to your processes, go-live with active claims. |
| Best For | Organizations with unpredictable claim volume spikes (CAT events) needing temporary surge capacity, or very low base volume (under 100 claims/month) where building in-house capability isn't justified | Organizations with steady claim volume (200+ claims/month) wanting to build in-house automation capability, maintain data control, reduce per-claim costs at scale |
Who should choose what — an honest assessment
BPO and automation serve different needs. BPO reduces labor cost per claim. Automation eliminates labor entirely for routine tasks.
Choose Claims BPO if:
- Your claim volume is low and unpredictable (under 100 claims/month) — building in-house capability isn't economically justified
- You experience catastrophic event surges requiring temporary 10x capacity increases that you can't staff internally
- You need 24/7 human phone coverage for FNOL intake and don't have budget for round-the-clock in-house staffing
- Your organization explicitly wants to minimize headcount and is comfortable outsourcing claims operations to third-party
- You have simple, high-volume, low-complexity claims (warranty processing, retail product claims) where cost per claim is primary metric
- You already outsource other operations (customer service, IT support) and have mature vendor management processes
- Your data security requirements are minimal — no PHI, no highly sensitive PII, no regulatory restrictions on offshore processing
BPO makes sense when labor arbitrage (paying offshore rates) delivers lower per-claim costs than building in-house capability. For low-volume, surge-capacity, or cost-minimization priorities, BPO provides flexibility.
Choose Regure if:
- Your claim volume justifies in-house operations (200+ claims/month) and you want to build automation capability
- You need to maintain direct control over claims operations — processes, quality, customer interactions
- Your data security/compliance requirements restrict offshore processing (HIPAA PHI, enterprise security standards, state data residency laws)
- You want per-claim costs to decrease as volume scales — not stay flat at $50-150/claim regardless of efficiency gains
- You need real-time processing (sub-2-second classification) rather than 8-24 hour batch turnaround
- You want your team to develop institutional knowledge and expertise — not lose it to BPO turnover
- You need flexible workflow customization that you control directly without contract amendments
- Your brand experience requires customers to interact with your staff — not offshore call centers
- You want to eliminate per-claim fees entirely — flat monthly costs regardless of volume
Regure automates what BPO outsources. If you process 200+ claims monthly, automation delivers lower per-claim costs while maintaining control. Calculate your break-even.
Can you use BPO and Regure together?
Yes, and many organizations use hybrid models — BPO for surge capacity during CAT events, Regure for steady-state operations.
Common architecture: Regure handles 80% of routine claims with in-house team using automation. BPO provides overflow capacity for the remaining 20% during volume spikes (hurricane, wildfire, major storm events). During steady-state operations, your team processes claims in Regure at low per-claim cost. During CAT events, overflow claims route to BPO for temporary surge processing at higher per-claim cost — but only for the duration of the event.
This hybrid approach optimizes cost: you don't pay BPO per-claim fees during normal operations (Regure's flat monthly cost is lower), but you don't need to staff for 3x surge capacity internally (BPO provides elastic scaling when needed). The key: Regure automation reduces your steady-state BPO dependency from 100% of claims to 0%, reserving BPO only for genuine surge scenarios where temporary labor is economically justified.
Migration pattern: many organizations currently using BPO for all claims adopt Regure and gradually reduce BPO volume. Start by processing simplest 20% of claims in-house with Regure automation (immediate cost savings). As team builds expertise and workflows mature, expand to 40%, then 60%, then 80% in-house processing. BPO contracts reduce from primary provider to backup surge capacity — dramatically lower annual BPO spend while maintaining flexibility.
What buyers ask when evaluating BPO vs in-house automation
At what claim volume does automation become cheaper than BPO?
Break-even typically 150-250 claims/month depending on complexity. Example: 200 claims/month at $75/claim BPO cost = $15K monthly. Regure 5-user team at $150/user = $7.5K monthly = $7.5K savings. At 500 claims/month: BPO = $37.5K monthly, Regure = $7.5K monthly = $30K savings. Rule of thumb: if current BPO spend exceeds $10K/month, automation ROI is compelling. Calculate your specific break-even.
What about quality? Don't humans catch nuances AI misses?
Nuance argument cuts both ways. Humans catch context AI might miss (unusual claim circumstances requiring judgment) — but humans also make mistakes AI doesn't (tired at end of shift, distracted, inconsistent between adjusters, undertrained after high turnover). Industry data: human BPO classification accuracy 85-95%, Regure AI 99%+ for standard documents. For edge cases requiring judgment, Regure flags uncertain classifications for human review — best of both worlds. Hybrid human-AI outperforms either alone.
Can we reduce BPO costs by bringing claims in-house with Regure?
Yes, this is the most common ROI driver. Organizations currently paying $20K-50K monthly to BPO bring operations in-house with Regure automation at $5K-15K monthly total cost. Savings: $15K-35K monthly = $180K-420K annually. Payback period: immediate (monthly subscription, no upfront implementation fees). Transition timeline: 4-8 weeks (overlap BPO during Regure deployment, shift volume gradually, terminate BPO contract after full transition).
What if we need surge capacity during CAT events?
Three options: (1) Keep BPO relationship for CAT surge only — use Regure for steady-state, activate BPO for temporary 3-10x volume spikes. (2) Staff internal flex capacity — hire temporary claims staff during CAT events, they use Regure tools (faster onboarding than training on multiple systems). (3) Accept longer cycle times during surge — Regure automation increases per-adjuster throughput 40-60%, reducing need for surge staffing. Most organizations choose option 1: automation for base load, BPO for genuine surge.
How do data security risks compare between BPO and in-house automation?
BPO higher risk profile: claim data transmitted to third-party, processed on BPO systems, accessed by offshore staff you don't directly manage. BPO staff turnover (25-40% annually) means constant new users accessing sensitive data. Compliance responsibility shared — if BPO has breach, you're still liable to regulators/customers. Regure lower risk: data stays in your tenant, accessed only by your authorized employees, processed on infrastructure you control. Enterprise security standards, ISO 27001, regional data residency available. For PHI/PII-sensitive claims, in-house automation reduces third-party exposure.
Calculate your savings from in-house automation vs BPO
Use our ROI calculator with your current BPO costs or potential BPO quotes. See break-even analysis, annual savings, and control/quality benefits from bringing claims operations in-house with Regure automation.