When a growth-stage fintech company I was working with decided to expand into SMB lending, underwriting was the first role they flagged as mission-critical. They knew this wasn’t just about compliance or checking boxes. The underwriter would be shaping the company’s appetite for risk and determining how aggressively it could grow without compromising stability.
I remember the COO being unusually blunt: “This person is going to be the spine of our risk function. If we get it wrong, we’ll either bleed money or leave too much of the market untouched.”
That pressure wasn’t overstated. In the months that followed, the underwriter they hired helped design the entire credit decisioning framework — everything from how financials were evaluated to how edge cases were escalated. They didn’t just assess deals; they helped set the risk appetite of the business and created clarity across sales, product, and compliance.
I’ve often seen the underwriter role get lumped in as a technical or back-office hire. But the reality is: if you’re in lending, insurance, or any form of financial risk, your underwriter is your last line of defense and your best tool for growing without regret.
What a Great Underwriter Brings to Your Business
Every underwriter you hire becomes part of your risk posture, whether intentionally or not. With the right person on board, you’ll unlock more deals with less exposure. Meanwhile, a misjudged hire will result in either taking on risks you shouldn’t or missing out on the ones you should’ve closed.
Here’s what a high-performing underwriter brings to the table:
- Stronger risk modeling: They interpret financials and qualitative data with precision, giving you clearer, faster decisions.
- Tighter compliance: They keep your organization aligned with regulatory standards and internal policies, reducing audit risk.
- Cross-functional clarity: They communicate clearly with sales, product, and finance, making risk thresholds understood and respected.
- Pattern recognition: They spot inconsistencies, fraud signals, and emerging risk patterns that tools alone can’t catch.
- Strategic flexibility: They help shape policies that evolve with the business, supporting both risk mitigation and growth.
This isn’t a role you fill lightly. Along with preventing bad decisions, a great underwriter makes it possible to scale with confidence. Let’s break down exactly how.
How Underwriters Protect Your Business at Every Step
Review and Assess Financial Data for Loan or Insurance Applications
A skilled underwriter knows that financial data is more than just numbers; it’s a narrative about the health, behavior, and risk of a business or individual. Whether they’re reviewing balance sheets, cash flow statements, or tax returns, underwriters use this data to determine the creditworthiness or insurability of an applicant.
Key financial indicators an underwriter may review include:
- Revenue consistency and growth trends
- Debt-to-income or debt-service coverage ratios
- Liquidity and available working capital
- Profit margins and expense breakdowns
- Historical defaults, delinquencies, or bankruptcies
- Unusual financial activity or seasonal fluctuations
Evaluate Risk Profiles to Approve or Decline Submissions
Once the financials are reviewed, the underwriter’s next step is to evaluate the full risk profile. This includes not just quantitative data, but qualitative context, such as business model viability, market conditions, leadership stability, or collateral quality. Great underwriters assess risk holistically, balancing the facts with industry-specific knowledge and internal risk tolerance guidelines.
They use structured decision frameworks, but they’re also trusted to exercise judgment in ambiguous or edge cases. That ability to weigh risk against opportunity, rather than automatically defaulting to safe or conservative choices, is what separates strategic underwriters from mechanical ones. When risk is calibrated correctly, the business is able to say “yes” to more of the right opportunities and “no” when it truly counts.
Ensure All Underwriting Decisions Comply with Regulations and Company Policies
A strong underwriter stays up to date on both industry regulations and your company’s internal policies, ensuring that every decision holds up to scrutiny. They’re not just aware of the rules; they know how to apply them consistently and document their rationale when exceptions arise.
In highly regulated industries like insurance and financial services, regulatory compliance can be a moving target. Laws evolve, risk thresholds shift, and underwriters need to be proactive in adapting.
Communicate Underwriting Decisions Clearly to Relevant Teams
An underwriting decision is only as useful as the clarity with which it’s communicated. Underwriters are often the bridge between complex assessments and frontline teams like sales, brokers, or account managers. They need to deliver decisions that are not only accurate but also actionable and explain the “why” behind each one without burying the audience in technical jargon.
Clear communication minimizes friction, builds internal trust, and reduces back-and-forth delays. When underwriters articulate their reasoning well, it helps sales teams position offers more effectively, helps operations implement policies efficiently, and prevents costly misinterpretations.
Document Risk Assessments and Maintain Detailed Records
Documenting every risk assessment, rationale, and final decision ensures that the business has an audit trail for future reference. This is critical not only for compliance and legal protection but also for internal consistency across the team.
Effective underwriters maintain detailed records that often include:
- The financial and qualitative data reviewed
- The decision made and the reasoning behind it
- Any risk factors noted or mitigated
- Supporting documentation provided by the applicant
- Communication history with internal teams or external stakeholders
- Relevant policy or guideline references used in decision-making
Collaborate with Finance or Risk Departments for Complex Cases
Some deals sit in a gray area (too complex for automated systems, too nuanced for simple checklists). In these cases, strong underwriters don’t operate in isolation. They know when to loop in the finance or risk team for a second opinion or more advanced analysis. Whether it’s a high-value loan, a unique insurance exposure, or an emerging business model, collaboration leads to more defensible decisions.
This ability to bring in the right voices at the right time is what helps a business balance risk with opportunity. Instead of delaying approvals or overcorrecting toward conservatism, cross-functional underwriting ensures that decisions are informed, timely, and aligned with company-wide strategy.
Identify Patterns in Approvals or Declines to Refine Risk Criteria
Great underwriters don’t just process applications; they analyze outcomes. Over time, patterns begin to emerge: certain industries default more often, specific financial thresholds correlate with lower loss rates, or particular risk flags consistently signal trouble. A sharp underwriter pays attention to these patterns and uses them to tighten or adjust internal criteria.
This kind of analysis feeds directly into more accurate, predictive underwriting. By surfacing these trends, underwriters help your business evolve from reactive to proactive. Refining what qualifies as a “safe bet” and reducing noise in the pipeline. The result is faster decisions and lower risk exposure.
Recommend Policy or Procedure Updates Based on Analysis
Underwriters sit at the intersection of policy and practice. They’re often the first to spot when existing procedures aren’t keeping up with market realities. Whether it’s a rigid rule that’s disqualifying otherwise strong applicants or a policy that’s being interpreted inconsistently across teams, underwriters are uniquely positioned to flag what’s not working and recommend meaningful changes.
Their suggestions can include:
- Adjusting credit scoring thresholds based on recent trends
- Revising documentation requirements that slow down low-risk deals
- Creating exception pathways for edge cases
- Updating approval authority levels based on deal complexity
- Refining what “acceptable risk” looks like for specific segments
By giving your underwriters a voice in policy refinement, you turn them into proactive risk managers rather than just decision processors.
Monitor Industry Trends to Adjust Risk Assessment Strategies
Markets shift. Industries evolve. What was considered a stable, low-risk profile a year ago might carry serious red flags today. That’s why strong underwriters don’t operate in a vacuum; they actively monitor macroeconomic indicators, emerging threats, regulatory updates, and sector-specific developments. Staying informed helps them keep your business one step ahead of risk.
When underwriters incorporate external insights into internal decision-making, your criteria stay sharp and relevant. For example, rising default rates in a specific industry, changing regulations around insurance coverage, or economic signals like interest rate hikes can all trigger smarter adjustments to how you evaluate deals.
Support Business Growth by Enabling Profitable, Low‑Risk Deals
Ultimately, the best underwriters don’t just prevent losses. They help you say “yes” more often and more confidently. By accurately identifying which deals are both profitable and sustainable, underwriters clear a path for growth that doesn’t compromise stability.
This is where underwriting becomes a competitive advantage. When your team can move quickly on strong opportunities and walk away from dangerous ones (without second-guessing), you unlock a powerful rhythm. It’s the difference between cautiously treading water and scaling with purpose.
How to Avoid Risky Hires When Building Your Underwriting Function
Hiring an underwriter is a high-leverage decision. Get it right, and you build a foundation for confident, compliant, and scalable decision-making. Get it wrong, and the consequences can ripple through your entire operation: poor approvals, internal friction, compliance exposure, and stalled growth.
To mitigate this hiring risk, you need a structured, informed approach that goes beyond just resumes and interviews. Here’s how to protect your process:
- Align on what “good” looks like: Define success metrics clearly. Are you solving for speed? Accuracy? Regulatory strength? Growth enablement? Get internal alignment before writing the job description.
- Vet for contextual judgment, not just credentials: The best underwriters thrive in ambiguity. Use real-world scenarios in the interview process to assess how they make calls with limited data.
- Dig into documentation habits: Ask how they structure case notes, flag exceptions, or justify edge-case decisions. Poor documentation is one of the most common risks in underwriting.
- Include cross-functional stakeholders early: Have them meet with finance, risk, or even sales. You’re hiring someone who needs to build trust across the business, not just in their own silo.
- Partner with recruiters who understand the role deeply: Underwriting is often misunderstood by generalist recruiters. Working with someone who knows how to screen for sharp, strategic risk thinkers can save months of misfires.
Hiring an underwriter isn’t just about filling a seat; it’s about selecting a strategic operator who will shape your business’s approach to risk. The right process keeps you from gambling on the wrong fit.
Get Expert Underwriting Support to De-Risk and Scale Smarter
Hiring an underwriter isn’t a routine ops decision; it’s a critical move that shapes your business’s approach to risk, growth, and compliance. The wrong hire can lead to inconsistent approvals, poor documentation, internal friction, or worse, exposure to risks your team didn’t even see coming. But the right underwriter? They become the backbone of your risk function, helping you move faster, stay compliant, and close more of the right deals with confidence.
That’s where we come in. At Somewhere, we specialize in connecting high-growth companies with underwriting professionals who think strategically, act decisively, and communicate clearly. We don’t just send resumes. We help you define what success looks like for your unique business model, then match you with candidates who can deliver exactly that.
If you’re ready to de-risk the hiring process and bring on an underwriter who can actually move the needle, get in touch. Fill out the form below, and let’s find you the right fit.
