Underwriting is one of the most expensive, yet vital parts of any funding business. The problem is, if your underwriting process isn’t optimized, you’re not just wasting your underwriter’s time—you’re losing money.
The good news is that by refining your underwriting operations, you can improve efficiency, maximize profitability, and fully utilize your underwriters’ expertise. Here’s how to get started:
1. Shield Your Underwriters From Bad Cases
One of the biggest mistakes is treating underwriting as an isolated step in your process. Your underwriter should never have to look at cases that aren’t viable. Here are two ways to avoid that:
- Train Your Sales Reps as “Mini Underwriters”
Arm your sales team with a standardized checklist of questions tailored to different case types. This way, your sales reps can quickly filter out obvious bad cases right at the intake stage. Make sure your underwriters provide input on exactly what information they need upfront, so they aren’t wasting time reviewing unqualified cases. - Use an Intermediary for Case Submissions
Appoint a point person to manage the flow of cases to the underwriter. This person can prioritize time-sensitive cases, perform background checks on attorneys, and ensure that documents are labeled and complete before reaching the underwriter. This step alone can save your underwriters from wading through incomplete or low-priority cases.
2. Streamline the Underwriting Workflow
Your underwriters should be focused solely on underwriting. Any time they spend doing administrative work is time—and money—lost. Here’s how to keep them on track:
- Organize Documents Beforehand
Create a uniform system for organizing case files, separating key documents like police reports and medical records into clearly marked folders. Ideally, your intake and document collection process should end with a fully packaged file for your underwriter, so they don’t waste time hunting down information. - Prioritize Cases by Urgency
Not all cases are created equal. Use a checklist to pre-vet cases and organize your underwriter’s queue by priority, not just in the order cases arrive. This prevents them from switching between high-risk and high-value cases, keeping their focus on what matters most. - Keep Everything in One System
Use project management tools like Trello or Asana to centralize case information. This helps your underwriters access everything they need in one place and allows you to track their progress without interrupting their workflow. - Handle Incomplete Cases Efficiently
Designate an intermediary to deal with incomplete cases before they reach the underwriter. This person can follow up with sales reps or attorneys to track down missing information, ensuring your underwriter doesn’t get bogged down in avoidable delays. - Create Case Scorecards
Develop a standardized scorecard that underwriters can fill out for each case. This not only provides you with a clear assessment of the case but also helps in setting client rates. For instance, lower-scoring cases could be funded at higher rates to account for the additional risk.
3. Track Underwriter Performance with Analytics
It’s not enough to assume your underwriters are performing well based on experience or gut feeling. Use data to measure their performance and make improvements. Start with these basic and advanced metrics:
- Basic Metrics:
- Number of cases underwritten
- Number of cases approved per week
- Approval rate
- Funded rate
- Advanced Metrics:
- Approval rate by case type
- Funded rate by case type
- Return rate by case type
- Investment return rate
- Dollars returned per underwriter
By tracking these metrics, you can make informed decisions. For example, if your underwriter takes twice as long to evaluate premises liability cases compared to motor vehicle accidents but the funding rates are similar, consider sending more motor vehicle cases their way to maximize efficiency.
Key Takeaways
Your underwriters should focus on what they do best—underwriting. By offloading administrative tasks and managing case flow efficiently, you’ll free up your underwriter to do what only they can do. Tracking performance through analytics will also give you insight into where improvements can be made.
The bottom line? Don’t let inefficiency cap your potential profits. Streamlining your underwriting process will improve productivity, reduce wasted time, and ultimately boost your business’s bottom line.
