Digital innovation is steadily reshaping Africa’s financial services landscape, with Nigeria emerging as one of the continent’s most promising life insurance markets. From mobile-first platforms and AI-powered underwriting to microinsurance solutions designed for underserved populations, the sector is undergoing a significant transformation. However, despite these technological advances, the vast majority of Africans remain largely unprotected, an estimated 97 percent of the population lacks any form of insurance coverage.
Across emerging markets, insurance penetration hovers at an average of just 2.9 percent, highlighting a persistent challenge. Low adoption rates are driven by structural issues such as limited trust in insurers, low awareness of the benefits of coverage, and premiums that remain unaffordable for most households. While digital tools are often promoted as a solution, the reality is that technology alone cannot dismantle the entrenched barriers that prevent widespread insurance adoption.
At a recent insurtech-focused webinar, industry experts highlighted why millions of Nigerians remain outside the protective reach of insurance, pointing not to a shortage of technology but to outdated infrastructure, limited insurance literacy, and fractured trust that together hinder adoption.
John Dada, co-founder and chief technology officer of Curacel, points to legacy technology as a major roadblock to adoption. “Many insurance companies in 2026 are still operating on systems built in 2000 or 2005. The fortunate ones might be on platforms from 2015 or 2016. These outdated systems create unnecessary friction, making even simple processes cumbersome and slowing growth,” he explained.
Dada highlighted how legacy systems impede partnerships and policy distribution. Without modern API connectivity, digital partners struggle to sell or distribute policies efficiently, often resorting to spreadsheets or emails that cannot scale. “If an insurer has targets for net premiums in Q1 or Q2 2026, outdated technology might prevent them from achieving them,” he said.
The problem, he notes, is not purely technical. Organisations attempting to modernise often apply the same legacy mindset, acquiring software the old-fashioned way instead of embracing agile strategies that allow incremental improvement. Outdated infrastructure thus directly limits market expansion: it restricts integration with digital ecosystems, slows policy distribution, and hampers responsiveness to customers.
“Insurers must move beyond legacy thinking,” Dada advises, while also noting that agile, modular systems capable of evolving with the market are key to driving sustainable growth.
Education and Trust: Technology’s human side
While infrastructure enables delivery, trust and literacy are what drive adoption. Nelson Madu, head of information technology at Coronation Insurance Plc, emphasises that education is central to building confidence in insurance. “When people see and trust experiences shared by others, they recognise the importance of being prepared,” he said.
Community engagement is another critical factor. Madu highlighted the importance of speaking in languages and scenarios that resonate with local populations. Social media, he noted, has become a primary source of information for both young and old. By deploying animated local-language avatars or technology-enabled storytelling, insurers can illustrate the real-life relevance of insurance, making the benefits tangible and understandable. “When people can see and verify experiences, trust grows. And as trust grows, so does adoption,” he added.
According to Madu, providing tangible examples such as easy access to claims support or timely medical consultations helps policyholders see the practical value of coverage, bridging the gap between abstract policies and real-life outcomes. In this way, education serves as a powerful catalyst for increasing insurance penetration, particularly in regions where adoption remains critically low.
Partnerships: Aligning traditional insurers with technology
Technology alone cannot scale adoption without collaboration. Gbenga Adigun, chief executive officer of Scrella Technologies Limited, highlights the potential and pitfalls of partnerships between traditional insurers and technology firms.
“The future of insurance is not about traditional insurers versus technology companies; it’s about traditional insurance powered by technology. However, many partnerships fail because both sides approach collaboration with different expectations. There is often a cultural gap: traditional insurers focus on risk management, regulatory compliance, and actuarial precision, while insurtechs prioritise speed, customer experience, and innovation,”Adigun explained.
He stressed that structural alignment is critical for partnership success. “A partnership works best when it creates clear value. For example, traditional insurers used to view smartphone insurance as insignificant because they were focused on large-ticket items like aviation, marine, fire, and oil and gas. By clearly defining value creation, insurers can handle smaller innovations, like device insurance, without diverting attention from their core business. This makes collaboration smoother and more effective.”
Adigun further explained that successful partnerships must move beyond pilot projects. “If you start an experiment or co-create a product, it’s important to continuously iterate and innovate. Shared KPIs, revenue-sharing structures, and co-creation from the outset are key to ensuring longevity. Traditional insurers contribute risk capacity and industry experience, while insurtechs provide technology, distribution, and data expertise. When these elements are aligned, both parties can achieve mutual growth, and innovation is no longer limited to experimental projects, it becomes a sustainable, long-term strategy.”
Trust: The Cornerstone of insurance adoption
Speaking on strategies insurers and technology platforms can adopt to build confidence among customers, Enobong Ezekiel, chief executive officer/founder of Coreal8 Limited, emphasised that trust in insurance is earned, not marketed stating, “Building trust, especially in insurance, is not about fancy contracts or big marketing campaigns. It’s simply about keeping your promises. People gain confidence when they can see, understand, and experience insurance working for them. Trust remains a major challenge in this industry, and it is built on doing exactly what you promised you would do.”
Ezekiel highlighted that customer confidence comes primarily from experience. “Insurance must be simple. Policies should be explained in plain, everyday language so customers know exactly what is covered and what is not. People don’t have time to read between the lines. Everything should be straightforward and relatable, so they understand what they are getting into.”
She added that claims processing plays a critical role in building trust. “Even a small claim that is paid quickly earns more confidence than any marketing campaign ever could. Speed, clarity, and reliability in claims create the foundation for trust.”
Consistency, according to Ezekiel, is equally crucial. “Whether a customer interacts through an app, an agent, or customer service, the experience should be smooth and predictable. One broken touchpoint can undo the trust you’ve built over time. Word of mouth can destroy a business, and it is one of the reasons insurance adoption remains low in many markets.”
Technology, she noted, should enhance visibility rather than obscure processes. “Real-time updates, clear communication, and transparency show customers that the system is working. When people see insurance not just as a promise on paper but as something that actually delivers when needed, trust grows organically.”
Ezekiel concluded by emphasising the ripple effect of trust: “Trust is more vital than we often realise. People who were once skeptical, when they begin to see insurance fulfilling its promises, become advocates. Their word-of-mouth spreads faster and more effectively than any marketing campaign.”
