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Innovation in #CRE Title Insurance Underwriting

By Joseph Powell posted 04-19-2021 16:14

  

Innovation in #CRE Title Insurance Underwriting

 

I came across an article written by a fellow industry professional whose job is “Underwriting Innovation Director.” Wow, what a portfolio! My passion in underwriting is to try to think outside the box, take ownership, and act with urgency in a way that respects the risk management objectives of the Company while providing creative solutions for the customer.

Why Joe? Isn’t title insurance just a commodity and could basically be underwritten by Artificial Intelligence? Oddly enough, there are some insurers experimenting or outright relying on AI for many residential underwriting decisions. However, in the realm of Commercial Real Estate (CRE) I just don’t think there is room for robotic decision-making. As a matter of fact, underwriters who do nothing but consult a guidebook or deploy an algorithm and stop thinking should be replaced. A guidebook is just that: guidance, a road map. It steers the underwriter and presents examples and case studies based on industry experience. But if there is one thing I have learned as an underwriter it is this: every deal is different. And every lawyer for every customer has varying expectations about how they feel title insurers should respond. Our response can never be “we just don’t do that.” Maybe the answer is no, but we have to back that up with a relationship and a thorough explanation that provides meaningful alternatives for the customer. The truly great thing about all the deals being unique is it allows the underwriter to grow with each deal rather than getting complacent with repetitive motion.

One of the things that is most useful to me as an innovator is remembering the corporate precepts of Fidelity National Financial. The two that really stand out to me daily are “Bias for Action” and “Autonomy & Entrepreneurship.” If the people in our Company making deals happen can focus on these two precepts 24/7, we will be unbeatable and better.

I sometimes think we can be too satisfied with being #1 in the industry because let’s face it - we are and it’s not even close. But being number 1 does not mean you just get to take victory laps and celebrate past successes. We have to figure out on every single deal how we are going to make it work in a way that makes the customer want to have a long-term relationship with us. Remember, in the customer’s mind the question is always “what have you done for me lately?” Business owners sometimes say “We specialize in repeat business” to emphasize the integral role hospitality plays in commerce. We want customers to come back and to tell their competitors about us.

So, what are some ways to be innovative in title insurance underwriting?

  1. Keep the underwriting manual handy but realize It’s just a road map. You still have to get in the car and drive. And there are other useful tools at an underwriter’s disposal. Other underwriters with varying experiences can provide valuable insight on a particular transaction you may be thinking is the first of its kind. And here’s something really crazy: listen to the customer. Ask them to tell you why they need a certain coverage that we don’t seem to be able to provide. It just may be that their narrative opens up another avenue for coverage.
  2. Regularly interact with other underwriters. Having the familiarity to be able to pick up the phone to get that advice can only come about if you first know them.
  3. Get out of the office. Participate in industry events. While the pandemic has really hurt this, ALTA and state associations still have had online meetings. And conventions will return. Sometimes you just need to be a part of those kinds of things to really learn and grow and hear what other people are doing to broaden your horizons. And do a ride along with your manager or sales team to visit a key customer. Let them see behind the curtain. That interaction can be the beginning of a very positive relationship.
  4. Challenge yourself with social media. I’m one of fewer than a handful of underwriting counsel that regularly engages on social media about title insurance. I think there is an art to it but sometimes you just have to create your account and jump in the kiddie pool and watch the big kids swim until you’re ready for free style. I’ve been working on social media like Twitter and LinkedIn for over a decade; and while I don’t have a huge following it was enough to earn me the recognition globally as #37 out of 150 Commercial Real Estate Influencers on Twitter (#CREi). My LinkedIn stats show I am in the top 2% of the Real Estate Industry social selling index. Being a thought leader is one way of being innovative. You also might even sell some title insurance. And observers will see you as a person with a mind of your own.
  5. Innovation also comes about by blending your role. Underwriters used to sit in a back room and have little to no interaction with customers. That’s not the kind of underwriter I want to be. I was raised in a family business that did not believe in absentee ownership, so I want to be fully engaged. To me, that means having conversations with customers and learning about their business and who they are. Congratulating them on their successes, thanking them for their trust, and asking for the next deal. If you can know a customer’s peculiar needs for certain title coverages it allows you to anticipate their needs and propose better solutions. Sometimes a customer isn’t trying to be hard to get along with, they just don’t know what we do or how we do it. Take time to “teach” the customer in the friendliest of ways whenever challenges arise in underwriting. Whatever you do, don’t think all conversations with the customer are best handled by their sales rep or title coordinator. Your voice as an underwriter has impact and authority and can be a real asset when you use it.
  6. FNTG is a huge company operating everywhere title insurance is available. As a result, the opportunity to serve customers on a nationwide footprint exists. Yet, that autonomy in our precepts means local underwriters will drive the train in most instances. Innovation means forming relationships with those underwriters so things can go smoothly when the bumps in the road otherwise would appear. You know what happens when innovation meets satisfaction? Innovation knocks over satisfaction. Don’t be stale and satisfied. Be willing to take the cues from the innovator at new solutions in underwriting. It may be something you have not tried before but that does not mean it won’t work.
  7. Reach out to customers even when you’re not underwriting a deal. It may be by making positive remarks on their own social media efforts or by sending an article you’ve seen that they might be interested in, one that conjures up some component of a deal you have worked on with them.
  8. Talk like a human being. Don’t be so legal minded that you’re no underwriting use. Even if the customer is a fancy lawyer, you’ll be better off casual and approachable. Especially when they ultimately need to concede you’re right or when we need to back pedal on something minor. Emails don’t need to be in Bluebook citation form. Speak in an uplifting and comfortable way that presents the Company professionally while disarming the customer with your engagement.
  9. Encourage other people. Be an encourager. People like nice people. Be one. That’s unusual and strangely innovative.
  10. Welcome new ideas. If all you ever do is say “we’ve never done it that way” then you’re the worst kind of person and should not be in business anywhere. Nobody, absolutely nobody wants to hear that. In fact, people basically don’t want to be told no. All people believe they are right, or they wouldn’t be doing what they are doing. Your innovative role is to channel them into a position so that we can underwrite their real estate goals.
  11. Innovation can come in pricing with the assistance of management. Entirely new rate options can be filed if the situation warrants it. Creativity can also come in the form of preparing “blank” endorsements that fit a coverage requirement better than an ALTA form. Just work with Regional Counsel or Senior Staff to make sure our bases are covered. Our Senior Staff has a wealth of knowledge and can be very helpful. Some title is just messy. At times a really good affidavit can fill a lot of gaps and answer a lot of questions not otherwise on the record.
  12. Speaking of Senior Staff, innovation can also come in how you relate to them. There are multiple senior underwriters with the same jurisdiction. Sometimes I think you need to pick your horse and bet on it every time. Find a senior staff member as your go-to and you will build a working relationship where they trust your analysis and you know what they are looking for in a complicated transaction.
  13. Challenge yourself with making presentations both in-person (once that is allowed again), online in webinars, or on camera for a video. Our “Title in a Minute” series for YouTube has started getting traction. Just simple recorded video explanations about various endorsements or underwriting issues. And we do webinars for customers and even for other NCS offices.
  14. Innovation can be as simple as setting yourself apart and being different than the rest. Title insurance can be called a commodity, but you can’t!

I’m not the Underwriting Innovation Director. I’m the Encourager-in-Chief of the CRE Title Insurance Industry. We’re all in this together and there’s a lot of business to do. Why not do it right, with passion, and for a profit.

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