Introduction
The financial risks that insurance companies take on a policy holder start by looking at the applicant’s medical history to ensure that they are well-versed of the policies that they are underwriting. For this to be done right, attend physician statements are very crucial. Unfortunately, these doctor’s notes come at a cost and it may not always be affordable to the business. Here’s a piece that seeks to offer solutions for these firms and guide them on how to enhance the accuracy of their APS summaries without increasing financial strain. Through this, eskers will be able to improve their cost model.
Understanding APS Summaries
APS summaries come in handy and can be classified as short hand notes regarding or outlining an individual signee’s medical history with special focus on his diagnosed conditions, cures, or medications that they have undergone. These rubrics are critical for risk assessment within the orignator’s underwriting department of the insuring company while they defer policy acceptance internally and or claim fixtures.
Key Components of APS Summaries
- Medical History: These are all the past illnesses and medical treatments the applicant has undergone.
- Current Medications: These are drugs that the applicant is on which can have an effect on his or her health condition.
- Physician Insights: These are notes provided by the attending physician about the applicant’s overall health which includes comments and recommendations.
Why APS Summaries Can Be Costly
The process of obtaining and processing APS summaries can incur various costs, which can quickly add up. Here are some of the primary factors contributing to these expenses:
- Labor-Intensive Reviews: An APS may at times reach hundreds of pages and therefore requires a lot of time and skilled personnel to manually sift through all these records and provide a summary as well.
- Specialized Workforce: Employees who are to summarize these medical records are required to possess an understanding of the language used in them which increases the amount to theirpayroll.
- Page Based Pricing Models: Other vendors who charge their clients based on the pages of a medical record rather than on the basic history of the client further increase the cost plethoras in difficult cases.
- High Volume of Cases: When an insurance company is dealing with many cases at a time the inescapably, the processing cost increases too.
- Quality Control Problems: When quality summaries that are of low quality and are reviewed and require rework to be of good quality increase the price.
- Expedited Services: Underwriters in most cases have strict deadlines by which time a decision should be obtained hence the service has to be done quickly, unfortunately such services are charged a huge fee.
The Benefits of Cost-Effective APS Summaries
Implementing cost-effective strategies for APS summaries not only reduces expenses but also enhances the overall quality of the underwriting process. Here are some key benefits:
- Greater Precision: Technology and competent professionals involved in the APS summaries will ensure that AMSAPS are correct and complete and this will guarantee good decisions on underwriting the applicant risk.
- Shorter Processing Period: Efficient processing and effective working relationships with vendors make it possible to greatly reduce the length of time required to get an APS and summarise it which will allow the underwriter to reply to the applicant in a shorter period.
- Better Customer Satisfaction: In the case of both companies and agents, the task is made much easier with the timely and correct preparation of APS summaries.
- Improved Profitability: Insurers would be able to earn more profit by offsetting cost savings and better operational efficiencies in the delivery of service.
Case Studies
Case Study 1: Overview of the Case
- Background: Costs associated with APS summaries were on the rise for an insurance company due to an excessive inflow of applications combined with the slow processing of those applications.
- Challenges: The Company was at the mercy of extensive reviews and high vendor costs which reduced their profit margins significantly.
- Solutions: The Company implemented an automated system for the preliminary assessment of data and selected a vendor for membership which gave bulk discounts which led to a 30% reduction in processing time and a 25% reduction in costs.
- Compensation: With the increased efficiency and reduction in turnaround time the insurer was now able to write more business which increased revenues and improved the market share.
Case Study 2: Overview of the Case
- Background: A mid-tier insurance company was facing issues with the quality of APS summary produced which has resulted in a high number of corrections and delays.
- Challenges: Due to portrayal of inaccurate APS summary, the firm was exposed to reputational risks which highly dissatisfied customers.
- Solutions: The firm pored resources into staff capacity building and developed a single repository of data to make their operations more efficient. They clearly communicated with their vendor with regard to the quality level to be achieved.
- Compensation: Consequently, the error level at the firm decreased by 40% and their clients rated the firm positively more often, which improved further the firm’s image and its clients’ loyalty.
Conclusion
APS summaries, which are economically efficient, are ideal for insurance companies whose target is to beat the competition whilst continuing to make profits. If they pinpointed the elements that are responsible for raising the costs and come up with measures while defining the APS processes, insurance companies would be of higher standards with improved efficiency. Adopting modern technology, choosing the right vendors, and optimizing the internal processes are many such steps. As we know, the insurance markets are changing fast, it will be important to nip these in the bud for growth in the long run.
