In India, the insurance sector is expanding quickly. In recent years, there has been a rise in the awareness about the various insurance products available in the market. As per India Brand Equity Foundation, ‘Indian Insurance Industry Overview & Market Development Analysis’ report, the insurance market in India is expected to reach US $222 billion by 2026. As per Insurance Regulatory and Development Authority of India (IRDAI), India is progressing to become the sixth-largest insurance market within a decade, leaving behind the insurance markets of Germany, Canada, Italy and South Korea.
To address the needs of the growing insurance sector and to increase the insurance penetration in the country, IRDAI developed a new insurance distribution model in 2015. This model introduced the concept of a Point of Sales Person (PoSP), through which a prospective policyholder can buy a basic type of insurance.
What makes Point of Sales Person different from Insurance Agent
The main distinction between a PoSP and an insurance agent is that the PoSP can offer basic, pre-underwritten insurance products, while the latter can offer complex and personalised insurance plans. Not just this, a PoSP and an insurance agent differ in a number of important ways.
Let’s examine the PoSP vs agent differences in detail.
Qualifications & training
To become a PoSP, you must be at least eighteen years old and must at least have completed the tenth grade or standard. It is the best option for those who want to get into the field and launch a successful career. Additionally, there are certain distinctions between the training received by an insurance agent and a PoSP. After completing the necessary training and certification, PoSPs are able to offer their clients a range of previously underwritten insurance products. On the other hand, insurance agents need to take relevant courses from accredited institutes. They need a license from IRDAI to function as an insurance agent.
What do they sell?
Where the insurance agents can sell a wider range of insurance products and address several insurance, a PoSP generally deals in pre-made and standardised insurance products. The insurance agents can sell both basic and sophisticated products by evaluating the unique needs and risk tolerance of their clients. In order to create a right product they modify policies with particular coverage amounts, deductibles, and exclusions.
PoSPs mostly serve as coordinators, as they gather data and handle applications for plans that have already been approved. Since the insurance products they deal in are pre-underwritten, the insurance provider has already decided on the terms and conditions. PoSPs are appropriate for addressing simple insurance needs because of their restricted degree of customisation. Therefore, those who need special or expensive coverage generally get in touch with the insurance agents.
Target Customer Base
The target audience is different for a PoSP and an insurance agent. A POSP advisor addresses the needs of clients who are looking for simple insurance products, such as general insurance, two-wheeler insurance and more. On the other hand, an insurance agent mainly deals in complex and customised products. These days, large geographic areas, such as metropolitan, suburban, rural, and urban areas, are now served by POSP advisers. Equipped with digital tools, they generally contact their regular and other verified clients who need basic insurance goods. Whereas, addressing the insurance needs of large and mid-cap cities that need complicated and personalised insurance products is the primary objective of an insurance agent. Typically, an insurance agent does not focus on the number of products being sold, but concentrates on selling high-quality products because the product makes them earn better commissions.
Scope of services
To understand, PoSP vs agent differences, a lookat their scope of services is important. The insurance agents offer a greater range of services ranging from evaluating rates from various insurers, detect possible hazards, perform needs assessments, and help you with the application procedure. They can also help with policy evaluations, claims processing, and renewals. As your needs change, agents serve as your long-term insurance advisor, making sure your coverage stays applicable. PoSPs, on the other hand, play a more of a transactional role by helping to make the first insurance policy purchase and addressing their simple queries about a product.
Compensation structure
The commissions earned by insurance brokers are typically determined by the sum of the premiums for the policies they sell. Additionally, agents are rewarded with bonuses when they meet their sales or client retention targets. However, in the case of PoSPs, it does not matter how much a policy is sold for, their commission is generally fixed.
Validity of Certificate
The certificate for POSP to practice their profession is valid for 3 years. However, the certificate that an insurance agent is rewarded stays valid till they surrender it.
Whom do they represent?
A PoSP represents the insurance company that they are working with, but an insurance agent represents the buyer. The insurance agents work by first understanding the needs of the buyer and then suggesting the policy to them that meets their needs.
With Religare, becoming a PoSP is simple. Join us to start a remarkable career in the insurance sector. You can sell pre-underwritten insurance products, offer prospective customers insurance solutions, and serve as an insurance advisor as a Religare PoSP for insurance.