Your delegated authority program looks fine on paper. Carriers haven’t pulled capacity. Loss ratios are acceptable. Volume keeps growing. Leadership assumes everything is under control.

But there’s a cost you’re not tracking, and it’s eroding your margins every single month.

Manual processing creates what we call a “capacity tax.” It doesn’t show up on your P&L as a line item. It hides inside everyday operations: data entry, file corrections, chasing missing documents, explaining reports to carriers, and reconstructing decisions during audits.

Carriers see it before you do. They notice when bordereaux arrive late or need clarification and track how often your files require follow-up. These operational signals tell carriers something critical: your processes are drifting.

And when processes drift, delegated authority becomes fragile, regardless of how strong your underwriting actually is.

The Real Cost of Manual Processing in Delegated Authority

The Monthly Financial Drain

Manual processing burns money in places most MGAs don’t measure.

Bordereaux preparation consumes 40-60 hours of senior staff time each month. Endorsements spike because submissions were incomplete the first time, and each one forces underwriters to reopen files that should have closed weeks ago. Audit preparation requires reconstructing decisions instead of presenting clean files.

The math is straightforward. If your MGA processes 500 submissions monthly and 15% require rework due to manual errors, that’s 75 files getting touched twice. At $50-75 per hour for underwriting support, you’re spending $5,000-$10,000 monthly on pure waste. Annually, that’s $60,000-$120,000 in hidden operational costs that deliver zero value.

Multiply that across teams, programs, and carrier relationships, and the number grows fast.

How This Damages Carrier Renewals

Carriers evaluate more than loss ratios during renewal negotiations. They assess operational control.

Manual processes create red flags carriers notice immediately: bordereaux that arrive late or are inconsistent, files requiring clarification months after binding, and reporting that needs explaining every cycle. When carriers see these patterns, they conclude your governance is weakening.

The result isn’t always dramatic. Carriers don’t always pull authority outright. Instead, they reduce capacity, tighten terms, or decline expansion requests. You lose negotiating leverage because your operations sent the wrong signals.

Strong loss ratios can’t offset weak operational discipline. Carriers protect themselves from uncertainty they can’t see or control. When your processes look unstable, they act early.

The Burnout Cycle

Underwriters are hired to assess risk. Instead, they spend 40-50% of their time on administrative tasks: chasing documents, correcting data entry, and preparing files for audit review.

Manual workflows don’t scale cleanly. As volume increases, the administrative burden grows faster than the number of submissions. Your underwriters work longer hours, quality suffers, and eventually, your best people leave.

The cost extends beyond employee turnover. The loss of institutional knowledge and the decline in underwriting judgment, resulting from teams operating under sustained pressure, are significant concerns. Hiring replacements does not address the underlying issue. Instead, it perpetuates the cycle.

Why This Matters More Now Than Ever

Capacity markets are tightening. Carriers have more options and less patience for operational uncertainty. They’re choosing which MGAs get authority expansions based on factors that go beyond underwriting performance.

Operational discipline is now a competitive differentiator. MGAs that demonstrate clean operations, consistent reporting, and audit-ready files have leverage in renewal discussions. Those that can’t are quietly losing ground: capacity gets capped, terms tighten, or growth stalls despite strong loss ratios.

The gap between well-run and poorly-run delegated authority programs is widening. Carriers can afford to be selective. They’re investing capacity where governance is clear, and execution is predictable.

If your operations signal instability, carriers reduce exposure, even if your underwriting intent is sound. The decision happens before losses materialize, which means by the time you notice the problem, you’ve already lost the capacity conversation.

What the Best MGAs Are Doing Differently

Strong MGAs know that delegated authority requires daily operational execution. The contract signature is just the starting line.

These organizations build process discipline into their operations. They standardize workflows. Documentation happens at bind. Files look the same whether an underwriter is managing 20 submissions or 200.

Underwriting judgment gets separated from administrative work. Underwriters assess risk and price policies. File preparation, documentation checks, and reporting inputs get handled by dedicated operational support. This keeps underwriters focused on what they’re trained to do.

Technology and trained teams work together to stop rework before it starts. Submissions get validated upfront. Required documents are collected before binding. Reporting inputs match carrier expectations from the beginning.

These MGAs protect their capacity and margins because their operations enforce discipline by design.

Delegated Authority Is Earned Daily

Delegated authority doesn’t survive on good intentions or strong underwriting alone. It survives through operations that stay disciplined when volume spikes and pressure mounts.

Carriers pull authority when operational standards weaken: files become inconsistent, documentation gaps widen, reporting drifts, or audit readiness declines. These failures happen long before loss ratios reflect trouble. By the time carriers lose confidence, the damage is done.

The capacity tax compounds silently. Most MGAs don’t notice the monthly financial drain, the weakening negotiating position, or the burnout cycle until they’ve already lost ground. Those tracking these costs and addressing them proactively will retain capacity when markets tighten.

MGAs that keep delegated authority at scale understand this reality. They build workflows that enforce consistency without slowing work down. And they design operations so care becomes automatic rather than heroic.

Trust gets built through execution. Authority survives because the operation proves it can handle the responsibility. Day after day, file after file, audit after audit.

How OIP Insurtech Can Help Your Team

For more than ten years, OIP Insurtech has worked within delegated authority programs. We have run these programs, built strong relationships with MGAs and carriers, and managed the daily tasks needed to maintain authority.

We are not just another insurtech company offering software as the answer. Our approach brings together teams trained in insurance operations and industry-specific technology, enabling carriers to focus on what matters most: execution quality.

Carriers grant authority to MGAs that demonstrate control through consistent documentation, reliable reporting, and audit-ready files. We help MGAs build and maintain that standard.

We understand the business from both sides: The MGA’s need to scale profitably and the carrier’s need to trust that authority is being managed responsibly. That perspective shapes how we work.