“It’s How We’ve Always Done It” Is the Most Expensive Sentence in Insurance Receivables
Still accepting checks in 2026? Your finance team probably needs a hug, as well as a serious payment upgrade.
We’ve been writing about this problem for over ten years now, hoping to report a significant shift toward digital adoption. Instead, the numbers tell the exact same story. While standard B2B check usage across other commercial sectors has dropped to just 26%, insurance remains anchored above 50%. As much as we want paper checks to magically disappear from your mailroom, the clearest path forward is automating the manual work out of the checks you do receive.
Paper checks are the ultimate costly trifecta. They’re a massive daily operational thorn in your side, an administrative nightmare, and a financial risk all rolled into one mailable liability. Scaled across thousands of policies, minor daily nuisances quickly multiply into major operational bottlenecks and multi-million-dollar fraud exposures. With 58% of companies facing check fraud, your organization carries a dangerously high probability of becoming next.
Here’s why paper checks persist across our industry, what they’re actually costing your bottom line, and how to modernize your operations before risk turns into reality.
Why Paper Checks are Still Hanging Around
If digital payment options offer superior speed, security, and reconciliation capabilities, why is the insurance industry still so loyal to the paper check?
It usually comes down to four things:
- Legacy Infrastructure & Deep Systems: Core policy administration systems (PAS) and legacy accounting frameworks were designed around paper-first workflows. Many teams understand the burden of check receivables, but are overwhelmed by the perceived effort of replacing them.
- Underestimating Hidden Costs: Because check processing is familiar, operational leaders frequently underestimate the hidden administrative overhead involved. When funds eventually land in the bank, it’s easy to forget how labor-intensive it is for teams to open mail, verify details, and route those payments.
- Complex Enterprise Financial Flows: High-volume organizations manage split payments, multi-party endorsements, premium financing attachments, and complex commission structures across thousands of policies. A common misconception is that standard digital payment tools simply aren’t smart enough to handle industry-specific nuances.
- Perceived Security & Familiarity: A belief remains that holding a physical piece of paper is inherently safer than a digital transaction (despite overwhelming data proving the exact opposite).
Doing the Math on Your Vulnerabilities
Every paper check inherently has built-in delay and risk. But when an enterprise organization processes 10,000 to 50,000+ payments a month, those shared risks go up exponentially.
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Brutal Administrative Costs of $4 to $20+ Per Check
Corporate financial benchmarks and studies by major institutions like Bank of America reveal that processing a single business paper check costs between $4 and $20+ when accounting for all direct and indirect expenses.
While a small agency feels the sting on a few dozen checks, an MGA or carrier processing 20,000 checks per month sees physical handling, mail opening, manual data entry, lockbox fees, bank runs, endorsement verifications, and postage burn through $80,000 to $400,000 every single month just to move paper from point A to point B.
2. Check Fraud Roulette
Check fraud impacts every link in the insurance chain. Reports of check fraud have escalated consistently over the past several years, with over 80% of surveyed financial and corporate organizations reporting check fraud events, with paper checks leading the way as the single most targeted payment method.
Mail theft and washing have evolved into a full-blown organized crime industry. With average reported losses starting at over $19,000 per instance, high-volume organizations routing thousands of physical checks through the postal system are effectively playing a high-stakes daily lottery with their cash flow.
3. Time Kills Binding Deals
A mailed check sent across town often takes 3 to 7 business days to arrive, followed by an additional 24 to 48 hours for manual processing, deposit, and clearing.
All of that waiting around actually causes policies to fall apart. In fact, studies show that policies paid by paper check face a 200% to 300% higher cancellation rate than those set up on automatic payments. When coverage depends on cleared cash, slow mail directly stalls policy starts and inadvertently leaves customers unprotected.
4. Manual Data Entry, Meet Unbalanced Ledgers
When teams enter data by hand, it takes just one misplaced digit to blow up a reconciliation report. A single miskeyed digit on an invoice number or policy ID can unbalance ledgers for weeks or quarters.
When finance teams spend the majority of their week matching check numbers against open receivables, high-value administrative talent is completely diverted away from strategic financial planning and core growth.
Teaching Old Checks New Digital Tricks
Transitioning away from physical checks does not require forcing thousands of policyholders, agents, or brokers to change their habits overnight. Instead, it requires implementing purpose-built insurance payment software that automates manual workflows while also supporting traditional payment methods.
Leading enterprise insurance organizations are modernizing their payment ecosystems through three key capabilities:
- Native AMS & PAS Integration: Payment platforms connect directly into your core management systems, enabling invoice status, binder confirmations, and reconciliation records to update automatically in real time.
- Smart Check Ingestion (For Mandatory Paper Payments): For trading partners who still mandate physical checks, solutions like ePayPolicy’s CheckMate allow teams to scan and convert incoming physical checks into digital payments immediately; automating invoice matching and ledger entry without the bank runs.
- Insurance-Tailored Financial Infrastructure: Built specifically for the industry, digital payment portals handle credit, ACH, and integrated premium financing options while accounting for the complex fee and commission structures unique to commercial insurance.
It’s Not You, It’s Your Checks
Even the best accounting teams can’t outrun a paper-based system. Just because a paper check works doesn’t mean it works well, and relying heavily on paper is measurably chipping away at margins, security, and your staff’s sanity.
Modernizing your receivables and payables infrastructure accelerates cash flow, protects against widespread check fraud, and frees up your financial teams to focus on scaling your core business.
Ready to eliminate manual reconciliation, protect your organization against check fraud, and optimize your bottom line? Request a custom walkthrough with ePayPolicy today.