Building trust and improving insurance penetration in Nigeria 

Home > Insights > Building trust and improving insurance penetration in Nigeria: Part 1: Improving the insurance stage of the customer journey and its touchpoints

First things first: what is an insurance customer journey?  

Before we go further, let me explain two terms I’ll keep using: customer journey and touchpoint.

Customer journey: is the full path a person takes with your insurance company, from first hearing about it to renewing, claiming or leaving. It covers everything the customer sees, hears, does and feels along the way. The customer journey starts with the awareness stage, then the consideration stage (when the customer is comparing companies), the decision or sales stage (when the customer eventually makes a purchase, which is what we’ll be discussing here), onboarding and policy life, claims, renewal, and advocacy.

Touchpoint: is any means through which a customer or potential customer interacts with your company as they go through the different journey stages mentioned above. If it leaves an impression on the person, or has the capacity to, it counts. It can be:

• People: agents, bank staff, call-centre reps, claims officers

• Digital: your app, website, social media pages, emails, SMS and WhatsApp messages

• Documents: the policy, the claim form, the payment receipt, the renewal notice, etc.

• Indirect: what other people say about you, such as word of mouth and online reviews

Take Geraldine, who wants car insurance, as an example. What would her journey look like?

Phase 1 - Awareness: Her friend says, “My insurer paid me in a week, so the car is repaired and in good condition now.” Geraldine thinks about how quickly her friend’s life returned to normal and decides she also needs auto insurance.

Touchpoints: advertisement, social media post, family and friends, etc.

Phase 2 - Consideration: She checks out the insurer her friend uses, does some Google searches, and asks more friends about the insurers they use.

Touchpoints: insurer website and social media pages, third-party review pages, family and friends, etc.

Phase 3 - Purchase: She finally decides which insurer to buy the cover from and meets the agent who explains the policy. She pays and signs.

Touchpoints: agents, application and onboarding forms, the quote, and the policy document itself

Phase 4 - Policy life: She gets her documents, and the company shares important updates with her when necessary.

Touchpoints here are mostly digital: text reminders, emails, the user portal, dashboards, the call centre (for questions and changes), etc.

Phase 5 - Claim: She’s involved in an accident and files a claim.

Touchpoints: claims team, customer support, etc.

Phase 6 - Renewal: Depending on her experience through the previous stages, she decides whether to renew or switch.

Touchpoints: the renewal notice and others.

Phase 7 - Advocacy or departure: She tells people to buy from the company, or warns them off.

Notice that the advocacy stage feeds back into the awareness stage for someone else. So, one customer’s experience becomes another person’s first impression.

Note: By now, it’s already obvious to you that the sales stage is third in the customer journey. But this article is part one of the series, so why am I skipping to it? The reason is that it contributes to the claims experience in a way that can further limit insurance penetration in the country.

Why insurance penetration in Nigeria stays low   

One of the major reasons is public distrust. Why is trust low? One of the major causes is the circulating stories of claims that were delayed or denied.

Of course, some claims must be denied because of fraud, and some need further investigation before anyone can say what the basis of the claim is. But there are genuine claims that were delayed or denied, and it was not necessarily the customer’s fault.

On March 12, 2025, NAICOM put unsettled claims in the spotlight by publishing policyholder complaints against insurers on its website. According to a Nairametrics report, the document listed 1,571 complaints.

So, why are genuine claims delayed? Why are they denied? I went looking for the causes, and below is one of the factors I found.

Some claims disputes start at the sales stage 

Delayed claims: One reason I found is that customers don’t provide full documentation. That’s their side of the problem, but it often starts at the sales stage. They weren’t fully enlightened, so they think they need one, two or three documents, and then they find out there are four others. In the middle of a crisis, they have to go scouting for those documents, and the clock is ticking.

There is also a difference in how delay is counted, according to Dr. Abass Olufemi, a lecturer at Lagos State University and the former Head of the Department of Insurance at the university. In his view, delay is perceived differently: an insurer starts counting from when all the documents are provided, while a policyholder starts counting from the moment they make the claim. He suggests there has to be a standardized timeline before a claim is marked as delayed, and I totally agree. This way, we’ll know whether a so-called delay is the insurer’s doing or the customer’s.

Denied claims: Sometimes exclusions are not made clear to the customer. Sometimes the agent is covering blind spots and giving the customer high expectations that the policy doesn’t meet. Then the customer makes a claim and is told, “No, your policy doesn’t cover this.” Or they’re told they haven’t paid the full amount.

Again, this is why I’m starting here at the sales stage. The sensitization and expectations set at the point of sale are what the customer keeps in mind. When they need the policy, that’s what they expect. Being told something different at that point is highly infuriating and frustrating, which is why such customers keep talking about their experience (and some even exaggerate it, unfortunately).

The different findings for delayed and denied claims point to one source: what the customer is told at the point of sale, or the expectations sold to them by agents. That’s why I’m focusing on the sales stage and its major touchpoints, which are the agents and the policy document.

Don’t get me wrong though 

I have to be very clear. I’m not saying that if we perfect the sales stage of the customer journey and its touchpoints, we will no longer have delayed or denied claims.

What I’m saying is that what happens at this stage, and how customers experience the agent, shapes their experience going forward. A customer whose claim is delayed or denied for a reason they were never told about will distrust the company, and the sector, far more than one who was properly informed.

So, my point is that getting this stage right can reduce the number of avoidable delayed and denied claims, improve renewals, and encourage the spread of positive experiences to the public.

Tips to improve insurance sales stage and its core touchpoints 

1. Re-incentivize your agents

Most agents are paid by commission, by the deal closed. To get them thinking long term, add a reward when a policyholder renews. Even if your agents are on salary, incentivize renewals too. The reward should be on top of their usual pay, so they look forward to it and work toward it.

That way, agents don’t focus only on closing the deal. They also ask themselves how their actions now will make it easier or harder for the customer to renew. Of course, the agent alone isn’t responsible for renewal, but their actions at the point of sale do have an impact, so we have to take that into account. What you reward is what people will naturally do more of; if you change the reward, the behaviour will change.

2. Review your agents’ journey

As your customers have a journey, so do your agents. What processes do they go through when they sell? What obstacles make it hard to close deals in the most ethical way? What pain points do they experience? Huddle with them, find out, and ease those pain points.

When you make your team’s work easier, customers feel it, and this applies in every industry.

Consider the improvement that has been happening in the restaurant sector globally. Placing an order and waiting for it has become noticeably smoother in many places, and a lot of unnecessary waiting has been cut. I once watched an interview with a restaurant CEO who explained how it started for them. They used to blame the kitchen team for keeping customers waiting. But when they reviewed the kitchen team’s journey, they found that orders weren’t reaching the kitchen the moment they were placed. Waiters would take an order, but they also had to attend to other tables that called them before heading to the kitchen. So they introduced a digital ordering system that lets customers order from their phones, and the kitchen sees each order instantly.

So you see how making things easier for your team makes the experience better for the customer?

3. Identify the possible impact of your decisions before committing: is it long-term growth, short-term cost-cutting, or both?

I learned that some insurers cut agents’ stipends, the money that covers the costs of meeting customers, making calls and everything else before a deal closes, because agents weren’t meeting targets. If you think about it, the saving is real and immediate, and the logic behind it is understandable. Stipends exist to help agents bring in sales, so management reasoned: no sales, no stipend. I believe the move was intended to get agents to do better.

But does that decision really solve the problem? We should ask why it is hard for agents to close deals. Maybe the wrong people were recruited. If so, we can replace them with better people and equip them properly. The most important thing is finding the root cause of the problem.

Think of the impact of this decision in the next six months or longer. Does it bring sustainable growth, or does it only offer short-term cost cuts?

You’ll find these diagnostic questions helpful in distinguishing whether your decision is aimed at cutting costs or can support the sustainable growth of your company. 

Red flag: The decision lowers immediate overhead but causes long-term churn, brand damage, and a loss of specialized internal knowledge.

Green flag: The decision treats the organization’s competitive advantage as untouchable.

Applied to the stipend cut decision: Currently, agents are a major distribution channel in Nigeria, making them a core capability for penetration. Cutting their operating stipend makes their already hard work far more frustrating. So this decision weakens a core capability.

Red flag: The decision introduces hidden liabilities, such as technical debt, operational bottlenecks or staff burnout, that will require expensive fixes later.

Green flag: The decision removes structural complexity, resulting in a cleaner, more robust framework that lowers future operating costs naturally.

Applied to the stipend cut decision: Regardless of the fact that management’s intention is to get agents to do better, the system is likely to be more fragile tomorrow. According to Inspensonline, “About 90% of job applicants refuse to appear for interviews after observing that the job involves insurance marketing. Out of the 10% that attend company training, only one per cent is retained after three months, as others quit the job.” Without an operating stipend, we would expect that churn to continue. Among the agents who stay, we would likely see three patterns:

• Agents with affluent networks they can tap quickly.

• Agents who overpromise to get customers to sign, which is already part of the problem we’re facing.

• Agents without those networks who sell honestly but close slowly, so their effort isn’t compensated.

The result is low morale among those who stay, and more time and money spent on recruiting and training replacements. The company ends up carrying operating costs and bottlenecks that are hard to trace back to the stipend cut, because the unintended consequences of the decision grow slowly.

Also, even though not all agents overpromise to customers, every agent will face significant friction when approaching customers, because guess what? The bad eggs always spoil the reputation of the good ones. People are not willing to try and see if an agent is honest. So all agents will begin to face high amounts of skepticism and pushback from potential customers, which lowers their output and means fewer policy sales for the company.

Note: Customer wariness of agents has been existing before any stipend cut, so I’m not pinning it all on the cut. The cut only adds to it, by increasing the pressure that can produce bad behaviour, which in turn leads to more wariness.

4. Simplify the policy documents 

Here is a hypothetical section of a car insurance policy, written the way many are:

At its own option the Company may pay in cash the amount of the loss or damage, or may repair, reinstate or replace the Motor Vehicle or any part thereof, and the liability of the Company shall not in any event exceed the Insured’s estimate of value stated in the Schedule.

The Company shall not be liable in respect of loss or damage arising from mechanical or electrical breakdown, failure or breakage, nor any depreciation, wear and tear, or consequential loss of whatsoever nature.

The Insured shall bear the first amount of each and every claim, as stated in the Schedule, and the Company shall be liable only for the amount in excess thereof.

Notice shall be given in writing to the Company immediately upon the occurrence of any accident or loss, and the Insured shall furnish all such particulars and documents as the Company may require.

Be honest, if you were signing this after a long conversation with an agent, how much of it would you really take in?

Now, here is the same thing in everyday words.

If your car is damaged, we decide how to sort it out. We may pay you cash, repair the car, or replace it. We will never pay more than the car’s value written on your schedule page.

We don’t pay when the car breaks down on its own, such as engine failure or an electrical fault. We also don’t pay for the car losing value as it gets older, or for normal wear and tear. Damage from an accident is different, and that is covered.

You pay the first part of every claim yourself. The amount is on your schedule page.

If an accident happens, tell us in writing straight away. Then send us the documents we ask for. If you delay, or don’t send them, we may not be able to pay your claim.

Did you see the difference? Wait, did you really see the difference? Both have the same meaning, but the second version is something a non-legal person can act on. 

Why this matters 

When someone buys a policy, they get two chances to understand it. The first is the conversation with the agent. The second is the policy document that arrives after they pay.

Ideally, the first does the job. The agent explains the exclusions, the waiting periods, and the documents needed for a claim, and the policy document simply confirms it. But agents don’t always explain things fully. Sometimes it’s rushed, sometimes something is left out. When that happens, the document is the customer’s safety net. They can read it, spot the gap, and go back to ask questions, request a change, or rethink the purchase, long before they ever need to claim.

But that safety net only works if they can understand what is written in the document. If it’s written in dense legal English, the second check fails, and the customer finds out the hard way, at claim time, when they need the policy most.

A 2017 BusinessDay article offers an illustration. It describes a customer on comprehensive car cover who pushed for a heavy discount. During the claim, he was shocked to hear that minor repairs, such as a broken headlight costing about ₦80,000, were excluded. We don’t know what he was told when he bought it, and that’s the point. Whether the explanation was thorough or rushed, the discounted terms would presumably have been reflected in his policy. A document he could actually understand would have given him a chance to catch it before the accident, not after.

So the policy document is the second major touchpoint at the sales stage, alongside the agent. If the agent says one thing and the document says another in language nobody can follow, the customer is left to find out the hard way.

What to do about it:

1. I’ll skip number one because I know you already know what it is. [Smiles in confidence]

2. Test it on real people: Give the revised policy document to someone outside insurance and ask them to explain it back. Wherever they stumble, rewrite.

3. Have your legal and compliance teams review the rewritten version, and check that it fits NAICOM’s requirements, so the simple version never contradicts the binding one.

Wrapping up

The sales stage is where customers learn what their policy covers, what it doesn’t, and what they’ll need when they claim. When that conversation is rushed or unclear, the customer finds out at the worst possible moment, and they tell others about it. That is how a sales-stage problem becomes a claims dispute, then a trust problem, then a penetration problem in the long haul.

I’m not saying that getting this stage right will end delayed or denied claims. But it can reduce the avoidable ones, and it changes how customers experience the rest. We don’t yet know what percentage of claims problems start at the sale. We’ll get there as the research continues.

What you can do now:

• Reward renewals, so agents think beyond the first sale.

• Review your agents’ journey, and remove the friction that makes selling ethically hard.

• Simplify your policy document, so customers can understand what they bought before they need it.

Frequently asked questions

What is an insurance customer journey?

The full path a customer takes with an insurer, from first hearing about it to renewing, claiming or leaving. It covers awareness, consideration, purchase, policy life, claims, renewal, and advocacy or departure.

What is a touchpoint in insurance?

Any means through which a customer or potential customer interacts with your company. It can be a person (an agent or claims officer), a digital channel (app, website, email, WhatsApp), a document (the policy, renewal notice), or an indirect source like word of mouth. If it leaves an impression, or can, it counts.

Why is insurance penetration in Nigeria low?

One major reason is public distrust, driven partly by stories of delayed or denied claims. When people hear those stories, they hesitate to buy cover at all.

Why do some claims disputes start at the sales stage?

Because the sales stage is where expectations are set. If customers aren’t told about exclusions, waiting periods or the documents they’ll need, they find out at claim time, and it feels like the insurer broke a promise.

Will improving the sales stage stop all delayed and denied claims?

No, some claims will still be delayed or denied, for example because of fraud or complex investigations. The aim is to reduce avoidable cases that stem from this stage and make sure customers understand the reason when it happens.

How can insurers improve renewals?

Reward agents when customers renew, not only when they sign. Review the agents’ journey and remove obstacles that make honest selling harder. Support agents instead of cutting what helps them do the job.

Does cutting agent stipends save money?

In the short term, yes. But it can raise recruiting and training costs, increase pressure to oversell, and add to customer distrust, all of which are hard to trace back to the cut.

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