Xuber says the case for change includes shining a light on the hidden costs of not modernizing. For example, the report points to speed-to-market abilities. "It is said that older software, running on code such as COBOL, still operates more effectively than newer systems in environments with intensive business processes and high volumes of transactions, even though the cost of maintenances is high," the report says. "However, such complex systems often prevent businesses from moving quickly enough to deploy new services or distribution channels ahead of their competition due to the age of the architecture."

Customer expectations come into play as well, and insurers need to be able to respond to increasing demands for a consistent experience. "A prime example is where disparate data models don't enable claims and policy to share information in a single view—insurers that maintain this siloed approach are restricting their ability to drive customer satisfaction and lower costs."

Insurers could also be missing out on top talent by not upgrading systems. Xuber says the "best of the best will seek out organizations that champion progressive initiatives such as mobile Internet, the Internet of Things and socially integrated applications—and that could be your competitors if your own house isn't in order."

Beyond showing the penalties a company may suffer by standing still, those making the case for change must also quantify the benefits the company will realize if it does commit to upgrading systems.

Xuber identifies seven areas where insurers could question current processes to see if they would benefit from change:

• Underwriting—"How many policies do you write now and how many would a new system or process enable you to write?"
• Customer—"How much does it cost you to retain a customer versus winning a new customer? If you knew your customer better through enhanced analytics, for example…what does that do to your costs of customer acquisition and retention?"
• Analytics—"What would you stand to gain by giving the power of information to more people within your organization?
• Claims—"What do claims cost you to manage in your current scenario, and what does that look like with a new system that enables data sharing with policy?"
• Messaging—"What cost savings can be achieved by reducing the manual re-keying of data and moving toward e-trading and the electronic import of data?"
• Acquisitions—"What is the cost of integrating new businesses into your own, and are these costs reduced with a new landscape?"
• People—"Survey your people. Ask them if they believe their systems could be improved. Does anything frustrate them? How could they service their customers better?"