There's a version of this conversation that happens at almost every insurer we talk to. Someone in IT or operations has been pushing for a better digital payment experience. Leadership agrees it matters. But there's a core system migration underway, a portal rebuild in progress, or a policy administration overhaul on the roadmap, and the logic is almost always the same: let's finish the foundational work first, then get to payments.
That sequencing feels responsible, but in practice, it's expensive.
Payments aren't a secondary feature to attach after the real infrastructure work is done. They're the most frequent touchpoint your policyholders have with your company. For most personal and small commercial lines, a policyholder might file a claim once every several years, but they pay a bill every month. This interaction defines customer perception for the majority of policyholders and deferring it means deferring the part of the experience your customers feel most often.
The implication is straightforward: improving payments cannot always wait until every larger modernization program is complete. The experience of Hawaii Employers' Mutual Insurance Company (HEMIC) with InvoiceCloud and Guidewire BillingCenter shows what payment modernization can look like in practice and the real, measurable business outcomes it can deliver.
Why insurance modernization stalls
The underlying complexity is genuine. Workers' compensation alone involves regular audits, pay-as-you-go premium structures, and billing cycles tied to payroll rather than a fixed schedule. Commercial lines have complications around installment plans, agency bill versus direct bill, and mid-term endorsements that change what's owed. Even personal lines have enough variation in payment plan structures and state-specific rules to make a standard e-commerce payment flow feel inadequate.
These complexities give insurers a reasonable-sounding reason to wait. Build the right core system first. Get the data model right. Then modernize the payment experience on top of a stable foundation.
The problem is that as that foundation goes through its iterations, the payment experience remains frozen, with paper checks arriving by mail, billing staff manually reconciling exceptions, and policyholders navigating outdated workflows.
What policyholders are experiencing everywhere else
What insurers' competitors do matters less than what policyholders’ payment habits outside of their insurance company are.
They're paying their mortgage from a phone. They're splitting a dinner bill in seconds. They're enrolling in autopay for their streaming services without calling anyone. Those expectations transfer directly to insurance billing. And when the experience they find doesn't match what they've come to expect, the gap is noticeable in a way it simply wasn't ten years ago.
For small business owners managing workers' comp premiums, this gap is particularly sharp. The person handling the premium payment is often the same owner managing broader operational responsibilities like payroll and compliance. Requiring them to mail a check or call in a payment wastes valuable time and attention that they notice, even if they don't complain about it directly.
The fear that slows adoption, and what actually happens
When insurers do move forward on payment modernization, the concern we hear most is policyholder resistance. Will convenience fees cause complaints, or even drive customers away?
That concern is understandable, but the data doesn't support it. What we've seen consistently is that resistance is a communication problem, not a payment problem. When options are presented clearly, with transparent language about any fees and straightforward guidance on how to use them, the pushback that insurers anticipate rarely shows up at the scale they feared.
We saw this directly with HEMIC, a workers' compensation mutual that modernized its payment experience through InvoiceCloud's Payments Accelerator for Guidewire BillingCenter. Given the complexity of workers' compensation, HEMIC anticipated high fee sensitivity and slow adoption. Instead, 25 to 35 percent of payments shifted to credit cards with no meaningful fee complaints. Within the first quarter, roughly 60 percent of HEMIC's customers had interacted with the platform. As Leila Kagawa, HEMIC's VP of Enterprise Strategy and Transformation, noted:
"To date, we're at $23 million of revenue collected through the platform, which is huge for us."
That result came from the proactive communication preceding launch: targeted outreach, portal updates, clear fee disclosures, and a change management plan that made the new experience feel familiar to policyholders before launch.
What modernization actually unlocks
The operational case for payment modernization is straightforward: less paper, fewer manual exceptions, reduced call volume, faster reconciliation. Beyond operational efficiency, digital billing also provides critical visibility into customer engagement.
Prior to their modernization, HEMIC had no reliable way to know how policyholders were engaging with billing communications. They could see that a payment came in, but they couldn't tell what drove it, meaning outreach strategy relied on assumptions rather than evidence.
After launch, that changed. Kagawa described being able to "really track and measure our communication efforts" and "really seeing how the customers were responding." For a billing team that had been operating without that feedback loop, the data became something they could actually act on.
That visibility is what separates a payment platform from a payment processor. Processing gets money from point A to point B. A platform tells you how it got there, what prompted it, and what to do differently for the customers who haven't moved yet.
Why parallel modernization works in insurance
The most common objection to updating payment systems during a core migration is integration risk. If the policy administration system or billing system is in the middle of a migration, adding another vendor and another integration feels like adding complexity to an already complicated program.
Modern platforms resolve this issue. Payment platforms today sit alongside core systems through pre-built integrations, without requiring deep architectural changes. InvoiceCloud's Payments Accelerator connects to Guidewire BillingCenter through pre-configured APIs, shifting the effort from custom code development to configuration. Insurers running on Guidewire can run the two workstreams in parallel, and the payment modernization can be in production before the larger program reaches its next major milestone.
HEMIC's implementation followed that pattern. The team consulted other InvoiceCloud and Guidewire customers to understand the integration decisions they'd face and the shared knowledge of that community shortened their path to a stable launch.
The cost of waiting
Delaying payment modernization has a cost that is concrete and ongoing. Paper check processing consumes staff capacity, while manual reconciliation creates error risk and delays reporting. Policyholders who can't pay the way they want to pay have a reason to be frustrated and in a relationship-driven market like workers' compensation, that friction matters.
Leading insurers recognize that payments modernization doesn't require a perfect moment. It requires a clear communication plan, a platform that connects to what they already have, and a willingness to meet policyholders where they are.
The technology, as it turns out, is not the hard part.
Watch the Episode
Hear the full conversation I had with Leila Kagawa, VP of Enterprise Strategy and Transformation at HEMIC, facilitated by Brian Desmond, Chief Marketing Officer at Guidewire, in this episode of Marketplace Conversations about modernizing the payment experience. For other episodes, check out Guidewire Conversations.
Angela Abbott is VP of Alliances at InvoiceCloud. InvoiceCloud's Payments Accelerator for Guidewire BillingCenter gives insurers a digital billing and payment experience that connects to BillingCenter through pre-built APIs, automates reconciliation, and gives billing teams the channel-level data they need to improve adoption over time. Learn more about InvoiceCloud on Guidewire Marketplace.