3 key insights from Federato’s 2025 State of Underwriting Report

Here’s our top 3 takeaways from the report, and what they signal for forward-looking underwriting leaders.

1. Unwinnable submissions drain underwriting resources

Across the board, underwriters are spending too much time on deals that are unlikely to bind, reporting an average of 26% of time wasted on unwinnable submissions. The problem only grew with insurer size - three-quarters of organizations with premiums over $250M reported wasting at least 20% of their efforts, while over a third of organizations over $1B reported wasting up to 50%. 

That’s a lot of time and attention going to work that doesn’t support the organization's goals or risk strategy. But the problems don’t end there - the data also showed a strong correlation between the percentage of wasted underwriting effort and higher reinsurance cost.

2. Underwriters lack the right tools - but leadership underestimates the challenge

The report highlights a major gap between leadership’s perception of effectiveness and the reality on the ground. While nearly half of executives (47%) believe their teams prioritize high-value opportunities well, only 28% of underwriters agree. 

This prioritization issue is a day-to-day underwriting challenge, with 32% of underwriters reporting that their organizations regularly spend time on submissions that don’t match portfolio goals. Only 34% of underwriters believed that their current tools effectively align underwriting decisions with portfolio strategy. 58% of executives, however, believed the current tools were effective.

This misalignment even extended to the number of systems used in the underwriting process, with half of executives reporting 4-6 systems used, while 60% of underwriters juggled 7 or more.

3. Insurers want to adopt modern technology, but the reality hasn’t caught up

According to respondents, a major contributor to underwriting challenges is the lack of usable, real-time data. 73% of underwriters report struggling with portfolio visibility, and 56% still rely on static guidelines like PDFs and spreadsheets to assess fit. That kind of manual, disconnected process makes it hard to focus on the most valuable opportunities, no matter how experienced the team is. 

It’s no surprise that over half of respondents cited failure to adopt advanced technology as the most significant missed opportunity for their underwriting organization. While many respondents believed that AI could help improve submission prioritization and accuracy in risk evaluation, only a little more than a third were using AI for those applications today. 

Transforming underwriting operations into a strategic advantage

The findings in this year’s report tell a clear story: underwriting inefficiency is no longer just a workflow problem; it is a strategic one. When underwriters lack the visibility and tools to act on the right opportunities, the entire organization feels the impact, from missed growth targets to rising reinsurance costs.

What stands out most is not just the volume of wasted effort, but how preventable it is. Misaligned submissions, fragmented systems, and static appetite guidelines are problems insurers can solve with the right mindset and technology solutions.

Despite the availability of modern tools, 55% of insurers say their biggest missed opportunity is the failure to adopt advanced technology that could address these exact challenges. 

Insurers that close these execution gaps will be the ones best positioned to lead, responding faster, aligning more tightly to strategy, and winning the kinds of deals that drive profitable growth.

For a deeper dive into the data and what it means for your organization, download the full 2025 Federato State of Underwriting Report.