There are several factors to consider in determining the cost of underwriting. Certainly, underwriting expenses of a company go far beyond just salary. Considerations include incentives and mandatory withholdings such as Medicare, Workers Comp and Social Security. Benefits, including Health, Dental, Disability, Life Insurance, 401K and Profit Sharing, must all be encompassed within the process. In addition, we need to factor in non-productive time such as vacation, holidays, sick time, breaks, etc. Do you know that, with the advent of the Internet, the average employee wastes 8.3 hours every week?
On the average, an underwriter is supported by two underwriting assistants. The reality of the situation is that the underwriter and the two assistants together constitute a true revenue-generating unit. Therefore, any discussion of the actual cost of underwriting should include the compensation of these three personnel as one unit.
In determining these costs, we calculated the average salary of underwriters and assistants from three states, which have the largest concentration of companies, i.e., Connecticut, Illinois and Texas. You will notice the initial salary of $69,500 for an underwriter inflates to $83, 530 when taking into account all of the added costs. In addition, when you consider this amount is paid for 902 hours (not 2080), then the effective hourly rate becomes $92.61 (approx. 3 times the original rate).
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If you apply the same computations to the two assistants, and add the result to the underwriter, the total hourly rate of the revenue-generating unit becomes $186.29. Of course, this result will vary based on your individual circumstances.
If we assume an underwriter reviews 4 cases an hour, then multiplying that by the actual 902 productive hours per year, gives us 3,608 cases per year. Therefore, if your actual labor burden per hour is $186.29, it costs you $47 for an underwriter to review one case.
However, this is not the full story since an underwriter reviews one case an average of 2.5 times before final action. Consequently, a case costs $47 x 2.5 or $117.50.
How BIUS, Inc. Saves You Money
BIUS, Inc. charges a fixed fee per case, not per review. There are no hidden costs or long-term contracts, and you only pay for work actually done. There is no downtime, vacation, etc., to consider.
We invite you to receive a free quote from us. You will be astounded when you see what we charge per case compared to your in-house underwriting costs. We are convinced, that given the opportunity, we can improve your time service, provide a seamless interface, enhance your relationship with your producers and bring you significant cost savings.
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