Bad Underwriting Operations is Losing You Money

The Mighty Team

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The Mighty Team

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October 2, 2023

Published On

October 2, 2023

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Originally Published August 2, 2016

Underwriters are likely one of the most expensive parts of your business, and definitely one of the most important.

Finding an underwriter you trust is only the first step. Top funders build efficient underwriting operations protocols in order to ensure that their underwriters are fully utilized and managed well.

You are wasting their time, and your money, if your underwriters are doing anything that does not take advantage of their expertise, such as organizing case files, setting up calls with attorneys, and tracking down missing documents.

By reading this post, you will learn how to keep your underwriters at peak efficiency by:

  1. Shielding them from bad cases
  2. Structuring underwriter workflow
  3. Tracking underwriting performance

Underwriting is a major cost that can make or break a funding business. Read on for simple tips that can help you optimize and understand your underwriting process to maximize profitability.

Shield Your Underwriter From Bad Cases

One of the biggest mistakes you can make is treating underwriting as a siloed step in your funding process. From the very outset, you can offload front-line qualifying to your intake and document collection teams. Your underwriter should never look at a case that doesn't stand a chance of being funded, and oftentimes a simple checklist can disqualify a good chunk of incoming leads.  

Use the following two tips to make sure your underwriter only looks at cases with a reasonable likelihood of funding.

1. Turn your sales reps into mini underwriters

Arm your sales reps with the right questions by creating standardized checklists and questionnaires based on case type.

This allows your sales reps to use their initial point of contact to gather facts that can filter out the obvious duds.

Here's a basic chart with some common case types and questions that your team can use as a springboard to improve your process. However, you should have your underwriters list out the EXACT questions they want answered so that they don't waste their time underwriting a bad case that shouldn't have made it past your intake team.

You don't have to stop at case type. For funders who receive cases directly from law offices, you may have additional screening criteria based on the quality of the attorney, his or her track record, and the strength of your relationship.

2. Create a Process and Intermediary for Submissions to Underwriters

Controlling the flow of cases to your underwriter is crucial for efficient underwriting. Consider designating a point-person who can manage the incoming cases and underwriting queue.

Leverage this intermediary to:

  • prioritize time-sensitive cases and large requests 
  • perform attorney-standing background checks
  • uniformly label documents to ensure incomplete cases don't make it to the underwriter
  • manage underwriting workflow

Here's a checklist your intermediary point-person can use before submitting cases to your underwriter:

Prior to Underwriting Checklist


  1. Ensure key information gets to Underwriter.
  2. Save underwriter's time by organizing information.

Case Strength:

(  ) Liability: e.g. Police Report, Expert's Report, Photos, Witness Statements/Dispositions.

(  ) Damages: Sense of treatment types, duration for each type, and diagnostic reports.

(  ) Collectability: Make note with evidence that underlying policy is not state minimum. 

(  ) Liens: Identify if liens exist. If so, assess the risk involved. 

Case Info:

(  ) Payoff: Update amount and expiration date, or note "no prior funding."

(  ) Label Documents: Make clear what each uploaded document is.

(  ) Check for Sufficient Documents: Be sure to note what is not available.

(  ) Confirm Case Type: Select relevant type or enter "Other" with description. 

(  ) Case Source: Make sure appropriate source is on file. 

(  ) Key Dates: Make sure Date of Loss and Date of Birth are on file.

Streamline Underwriting Workflow

This goes without saying but bears repeating: Your underwriter should be underwriting. Period.

Sloppy workflow management leads to underwriters performing administrative tasks that can be handled by someone without a law degree. When your underwriter is tracking down documents, you're losing money.

You might trust your underwriters to churn through unorganized funding applications, but letting them sort through jumbled case documents is a surefire way to waste your underwriters' valuable time, increase task switching, and kill productivity.

Here are 5 ways to turn your underwriting department into a machine:

1. Organize in advance

At minimum, you should implement a uniform system for organizing case documents.

For example, police and medical reports should go in separate folders that are clearly marked and easily accessible for your underwriter. Better yet, the last step in your intake and document collection process should be packaging all the case information and resources you've collected into a single file.

Organized files will allow your underwriter to stop thinking about where a file is or even who to ask.

2. Prioritize, prioritize, prioritize

Loads of incoming leads are good for business, but without proper sorting and prioritization early on, your underwriter will spend just as much time reviewing risky cases as slam dunks. Without even realizing it, you will have exposed your underwriter to productivity-draining task switching. Instead, use simple checklists like the one above to pre-vet cases and organize your underwriter's queue by priority rather than chronological order.

3. Keep all of their work in a single system 

Allow your intermediary to centralize cases by using a free project management tool like Trello or Asana. These tools streamline the process for your underwriter and allow you to check in on their progress without having to interrupt their flow.     


4. Incomplete cases

Another great task for that intermediary is dealing with incomplete cases that are returned by your underwriter, as well as funding requests that need more case information. You should have a set process for helping your underwriters efficiently deal with incomplete cases. These incomplete cases should be removed from the underwriter's queue with a note that specifies the omissions with precision so your sales rep can get the answer ASAP.

This will allow your sales rep to track down the missing pieces, rather than forcing your underwriter to interrupt their process.

Consider also blocking off "on-call" hours for your sales reps to set up calls between your underwriter and plaintiffs' attorneys to address incomplete cases. This will help both your sales reps and underwriter coordinate, without wasting time sorting out schedules.     

5. Create case scorecards

Create a standard scorecard that your underwriter fills out for every case.

Using a quantitative filing system will allow you to quickly assess your underwriter's insights without having to dig into the nitty gritty of each case.

An added benefit is the ability to peg specific scores to client rates.

For instance, a low score would indicate that a case should be funded at a higher rate.

Here's an example of a basic scoring system and actionable insights:

Pro-tip: Google forms makes it easy for underwriters to write their insights, while also structuring their insights in a standardized fashion.

Track Underwriter Analytics

When we ask funders about how they know whether or not their underwriter is performing, we typically hear something vague like, “He’s been doing this for 10 years and knows his stuff.”

For funders that are looking to grow their businesses, a gut feeling that your underwriters, likely your most expensive and important team members, are performing is not enough.

Use analytics to understand the high-level stats and granular data in order to better understand and optimize your underwriters’ performance.

Basic Metrics

  1. Number of cases underwritten
  2. Number of cases approved per week
  3. Approval rate
  4. Funded rate

Advanced Metrics

  1. Approval rate by case type
  2. Funded rate by case type
  3. Return rate by case type
  4. Investment return rate
  5. Dollars returned per underwriter

Here’s a very simple example of leveraging analytics to improve efficiency.

If your underwriter takes twice as much time on average to evaluate premises liability versus motor vehicle accidents, but the funding rates are equal, consider sending more motor vehicle accident cases their way to maximize their time.

Key Takeaways 

The bottom line is that your underwriter should be 100% focused on the task of underwriting and underwriting alone.

Offloading distracting tasks to other team members and prioritizing underwriter queues will allow your underwriter to devote all of their expensive, scarce expertise to the task that only they can perform.

Similarly, even tracking basic analytics can lead to sizeable bumps in productivity. At the end of the day, your success as a funder depends on your underwriter, so don't let inefficiency put a ceiling on your profit potential.

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