Project – The Effect of Insurance Agents’ Professional Conduct on Customers’ Willingness to Renew Policies: A Study of Selected Insurance Companies in Port Harcourt, Rivers State

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Insurance is an important component of the financial services sector because it provides individuals, households and businesses with financial protection against uncertain events and potential losses. Through the pooling of risks and the payment of premiums, insurance enables policyholders to transfer specified financial risks to insurers in accordance with the terms and conditions of their contracts. However, the effectiveness of insurance as a risk-management mechanism depends not only on the availability of insurance products but also on customers’ understanding of the policies, confidence in the insurance provider and willingness to maintain their coverage over time. In this regard, the conduct of insurance agents becomes particularly important because agents frequently serve as the primary link between insurance companies and policyholders. Their professionalism, honesty, responsiveness and ability to communicate policy information can influence customers’ experiences and perceptions of insurance services (Moon, Lee, & Lee, 2025).

Insurance agents perform important intermediary functions, including explaining insurance products, identifying customers’ insurance needs, facilitating policy purchases, communicating policy conditions and maintaining relationships with existing policyholders. Since insurance contracts may contain technical terms, exclusions, premium obligations and claims requirements that are unfamiliar to many customers, agents are expected to communicate information accurately and responsibly. Professional conduct therefore involves more than achieving sales targets; it includes demonstrating integrity, exercising appropriate care, providing accurate information, respecting customers’ interests and avoiding misleading representations. In Nigeria, professional expectations within the insurance industry are supported by regulatory and professional institutions, including the National Insurance Commission (NAICOM) and the Chartered Insurance Institute of Nigeria (CIIN), which provide regulatory oversight and professional ethical guidance for insurance practitioners (NAICOM, n.d.; CIIN, 2023).

The professional conduct of insurance agents is particularly relevant because insurance is a service characterised by intangibility, contractual complexity and uncertainty about future benefits. Unlike many ordinary consumer products, the value of an insurance policy may become most apparent when an insured event occurs and a claim is submitted. Consequently, customers may depend considerably on agents to explain what is covered, clarify exclusions, communicate premium requirements and provide guidance when problems arise. When agents demonstrate competence, honesty, courtesy and reliability, customers may develop greater confidence in the insurance relationship. Conversely, inaccurate explanations, inadequate disclosure, delayed communication or unprofessional treatment may create dissatisfaction and weaken confidence. Research by Moon et al. (2025) found that insurance agents’ relationship-building behaviours, particularly communication and other interpersonal practices, were associated with customer trust, satisfaction and renewal intention, highlighting the relevance of agent-customer interactions to the continuation of insurance relationships.

Customer willingness to renew an insurance policy refers to a policyholder’s intention or readiness to continue an existing insurance arrangement when the current policy reaches its expiry date. Renewal is important to insurance companies because maintaining existing customers supports continuity of coverage, customer relationships and the stability of the insurer’s business. However, renewal decisions may be influenced by several considerations, including affordability of premiums, perceived value of coverage, quality of claims handling, competing insurance products and customers’ previous experiences with the insurer and its representatives. Professional conduct may influence these considerations by shaping customers’ perceptions of reliability, fairness and service quality. In their 2025 study, Moon et al. reported that trust and satisfaction were positively associated with insurance renewal intention, suggesting that the quality of customer relationships deserves attention when examining policy continuation.

In the Nigerian insurance industry, professional conduct is also important in strengthening consumer confidence and promoting responsible market practices. Customers need assurance that insurance practitioners will provide appropriate information, respect contractual obligations and treat policyholders fairly. NAICOM identifies policyholder protection, professional discipline, ethical practices and market conduct as important elements of its regulatory responsibilities. Similarly, the CIIN Code of Ethics for Insurance Practitioners in Nigeria establishes professional principles intended to guide practitioners in their relationships with clients and other stakeholders. These institutional expectations provide a foundation for examining whether customers’ experiences of agents’ conduct correspond with the standards expected of insurance professionals. The extent to which customers perceive agents as honest, competent, transparent and dependable may have implications for their satisfaction and subsequent renewal decisions (NAICOM, n.d.; CIIN, 2023).

Furthermore, professional conduct can be examined through specific dimensions such as honesty, competence, transparency, communication, responsiveness and respect for customers. Honesty concerns the accuracy and truthfulness of information supplied to policyholders, while competence relates to an agent’s knowledge of insurance products and ability to provide appropriate explanations. Transparency involves communicating relevant policy conditions, exclusions, premium obligations and other material information without deliberately creating misleading impressions. Responsiveness concerns the willingness to address customers’ enquiries and provide timely assistance, while respect involves treating policyholders fairly and courteously. These dimensions are relevant to the insurance relationship because customers may use their interactions with agents to judge the dependability of the services they receive. The relationship-marketing perspective developed by Morgan and Hunt (1994) similarly identifies trust and commitment as important elements in maintaining successful long-term relationships between exchange partners.

The importance of these relationships is supported by empirical research on insurance customers. Moon et al. (2025), in their study of 253 insurance customers, investigated the relationships between agents’ relationship-building behaviours, trust, satisfaction and renewal intention. Their findings indicated that communication and other relationship-building behaviours contributed to trust, while trust and satisfaction were positively associated with renewal intention. Although the study provides useful evidence concerning the relationship between insurance agents’ interactions and customers’ intentions to continue their policies, its findings cannot automatically be generalised to every insurance market or customer population. Differences in regulatory environments, customer expectations, service experiences and insurance-market conditions make it necessary to examine these relationships within specific contexts. Therefore, investigating selected insurance companies in Port Harcourt, Rivers State, can provide context-specific evidence concerning how customers perceive agents’ professional conduct and how those perceptions relate to their willingness to renew policies (Moon et al., 2025).

1.2 Statement of the Problem

Insurance agents are expected to demonstrate professionalism, integrity, competence and transparency in their dealings with policyholders. These expectations are important because customers often depend on agents to understand insurance products, fulfil policy requirements and obtain guidance concerning their coverage. However, the existence of professional and ethical standards does not, by itself, establish that every customer consistently experiences the expected level of service. Differences in agents’ communication practices, product knowledge, responsiveness and treatment of customers may result in varying customer experiences. The CIIN Code of Ethics and NAICOM’s regulatory responsibilities establish a professional framework for the industry, but the extent to which customers’ perceptions of agents’ conduct are associated with their renewal intentions remains an empirical question requiring investigation (CIIN, 2023; NAICOM, n.d.).

A related problem concerns the possibility that customers’ decisions to renew insurance policies may be influenced by dissatisfaction with the conduct of the agents who serve them. Where customers perceive that policy information is inadequately explained, enquiries are not addressed promptly or important contractual conditions are not communicated transparently, their confidence in the insurance relationship may be affected. Such experiences may contribute to uncertainty about the value of maintaining a policy and may influence customers’ willingness to continue their coverage. Nevertheless, it would be inappropriate to assume that every instance of non-renewal results from agent misconduct, since premium affordability, changing insurance needs, claims experiences and other market considerations may also influence renewal decisions. The problem, therefore, is to establish the extent to which professional conduct is associated with renewal willingness while recognising the influence of other relevant factors (Morgan & Hunt, 1994; Moon et al., 2025).

Another concern is that insurance companies may place considerable emphasis on customer acquisition and policy sales without giving equal attention to the quality of professional interactions required to maintain existing customer relationships. Sales performance alone may not adequately reveal whether customers understand their policies, consider their agents trustworthy or are satisfied with the services received. Evidence from Moon et al. (2025) indicates that trust and satisfaction are relevant to renewal intention, suggesting that customer retention should also be examined in relation to the quality of agent-customer relationships. However, the findings of studies conducted outside Nigeria cannot be treated as direct evidence of customer experiences in Port Harcourt. This creates a need for research that considers the professional conduct of agents and customers’ willingness to renew policies within the local insurance-market environment. ScienceDirect

Specifically, there is a need to investigate how customers of selected insurance companies in Port Harcourt, Rivers State, perceive the honesty, competence, transparency, communication and responsiveness of their insurance agents, and whether these perceptions are significantly associated with their willingness to renew policies. Without such context-specific evidence, insurance companies may have limited information about which aspects of agents’ professional conduct customers consider important when deciding whether to continue their insurance coverage. The present study therefore seeks to examine the effect of insurance agents’ professional conduct on customers’ willingness to renew policies, using selected insurance companies in Port Harcourt, Rivers State, as its area of investigation. The study will provide empirical evidence on the relationship between the variables without presuming in advance that professional conduct is the sole determinant of renewal decisions.

1.3 Aim and Objectives of the Study

The aim of this study is to examine the effect of insurance agents’ professional conduct on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.

The specific objectives are to:

1. Examine the effect of insurance agents’ honesty and integrity on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.
2. Determine the effect of insurance agents’ competence and product knowledge on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.
3. Assess the effect of insurance agents’ transparency and communication practices on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.
4. Investigate the effect of insurance agents’ responsiveness and customer relations on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.

1.4 Research Questions

The following research questions will guide the study:

1. To what extent do insurance agents’ honesty and integrity affect customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State?
2. How do insurance agents’ competence and product knowledge affect customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State?
3. What effect do insurance agents’ transparency and communication practices have on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State?
4. How do insurance agents’ responsiveness and customer relations affect customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State?

1.5 Research Hypothesis

The following null hypothesis will be tested at the 0.05 level of significance:

H₀: Insurance agents’ professional conduct has no significant relationship with customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.

1.6 Significance of the Study

The findings of this study are expected to be significant to insurance companies, insurance agents, policyholders, regulatory and professional institutions, researchers and students.

Insurance Companies: The study may provide useful information to insurance companies concerning the relationship between agents’ professional conduct and customers’ willingness to renew policies. The findings may help management identify areas of professional practice that require improvement, particularly in relation to honesty, product knowledge, communication, transparency and customer relations. Such information may also support the development of staff training programmes and customer-retention strategies.

Insurance Agents: The study may increase awareness among insurance agents of the importance of professionalism in maintaining customer relationships. By examining how customers perceive their conduct, the research may encourage agents to improve their communication practices, demonstrate greater transparency and provide more responsive customer service.

Policyholders: The study may contribute to a better understanding of the professional standards customers should reasonably expect from insurance agents. It may also encourage policyholders to pay attention to the quality of information and service they receive when purchasing, maintaining or renewing insurance policies.

Regulatory and Professional Institutions: The findings may provide supplementary evidence that could be useful to institutions such as NAICOM and CIIN when considering professional development, consumer protection and ethical practices within the insurance industry. The study will not replace regulatory assessments but may contribute to discussions about customer experiences and professional conduct.

Researchers and Students: The study may serve as a reference for future research on insurance marketing, customer relationship management, professional ethics, customer satisfaction and policy renewal behaviour. It may also provide a foundation for comparative studies involving other cities, insurance companies or dimensions of professional conduct.

1.7 Scope of the Study

The study focuses on the effect of insurance agents’ professional conduct on customers’ willingness to renew policies in selected insurance companies in Port Harcourt, Rivers State.

Geographically, the research is limited to Port Harcourt, Rivers State, Nigeria. The respondents will comprise customers of the selected insurance companies who have relevant experience dealing with insurance agents.

Conceptually, the independent variable is insurance agents’ professional conduct, examined through honesty and integrity, competence and product knowledge, transparency and communication, and responsiveness and customer relations. The dependent variable is customers’ willingness to renew policies.

The study will concentrate on customers’ perceptions and reported renewal willingness. It will not assume that agents’ conduct is the only factor influencing renewal decisions, since other considerations, including premium costs, policy benefits, claims experiences and changing customer needs, may also be relevant.

1.8 Operational Definition of Terms

Insurance: A contractual arrangement under which an insurer provides specified financial protection against covered risks in return for a premium, subject to the terms and conditions of the policy.

Insurance Agent: A person authorised to act as an intermediary in insurance transactions, including providing information about insurance products, facilitating policy purchases and maintaining relationships with policyholders.

Professional Conduct: The manner in which an insurance agent performs professional duties and interacts with customers, particularly in relation to honesty, integrity, competence, transparency, communication, responsiveness and respect for customers.

Honesty and Integrity: The extent to which an insurance agent provides truthful information, avoids misleading representations and demonstrates ethical behaviour when dealing with customers.

Competence and Product Knowledge: An insurance agent’s understanding of insurance products, policy conditions, exclusions, premium obligations and related matters, as well as the ability to explain them accurately to customers.

Transparency and Communication: The extent to which an insurance agent provides clear, accurate and timely information about insurance products, contractual obligations, policy conditions and relevant updates.

Responsiveness and Customer Relations: The willingness and ability of an insurance agent to respond to customer enquiries, provide assistance, address concerns and maintain respectful professional relationships.

Customers: Individuals or organisations that purchase or hold insurance policies with the selected insurance companies and have experience interacting with their agents.

Willingness to Renew Policies: A customer’s stated intention or readiness to continue an existing insurance policy when it reaches its renewal date.

Policy Renewal: The continuation of an insurance contract beyond its current period of coverage, subject to the applicable renewal terms and conditions.

Selected Insurance Companies: The insurance companies operating in Port Harcourt, Rivers State, that will be chosen for inclusion in the study.

1.9 Organisation of the Study

The study will be organised into five chapters.

Chapter One presents the introduction, background to the study, statement of the problem, aim and objectives, research questions, research hypothesis, significance of the study, scope of the study and operational definition of terms.

Chapter Two will review relevant literature on insurance agents’ professional conduct and customers’ willingness to renew policies. It will cover the conceptual review, theoretical framework, empirical review and summary of the literature gap.

Chapter Three will explain the research methodology, including the research design, area of study, population, sample size and sampling techniques, research instrument, validity and reliability of the instrument, data collection procedures and methods of data analysis.

Chapter Four will present, analyse and interpret the data collected from respondents. It will also address the research questions and test the research hypothesis.

Chapter Five will present the summary of findings, conclusion and recommendations based on the results of the study.

Project – The Effect of Insurance Agents’ Professional Conduct on Customers’ Willingness to Renew Policies: A Study of Selected Insurance Companies in Port Harcourt, Rivers State