Recent POS guidelines to promote insurance products through intermediaries | Point of Sale Person

  • Recent POS guidelines to promote insurance products through intermediaries

    POS guidelines to promote insurance products through intermediaries

    In the latest development by the Indian insurance regulator – IRDA, to increase the penetration of insurance in India, IRDA has given the go-ahead to insurance intermediaries such as brokers to support the empowerment and certification of POS agents (aka - intermediaries).

    The latest clutch / slew of guidelines issued by Insurance Regulatory and Development Authority of India (IRDAI), to regulate and enable professional management of the Point of Sale (POS) platform  which will be an enabler for increasing the awareness and penetration of no-frills / simple to understand / over-the-counter,  life insurance products.  These new set of guidelines will be hugely beneficial for the relatively new players in the life insurance domain and will help them grow their insurance business and will also enable them to reach out to those segments / groups, where buying an insurance policy is still considered a difficult task.
    The two-wheeler segment in the auto insurance remains one of the most under penetrated section in the motor insurance industry. Due to poor enforcement of the laws, by the respective authorities, is largely to be blamed for a huge chunk of lapsed policies. This non-renewal of policies is endemic to the two wheeler industry. The POS would go a long way in addressing this challenge and would enable timely renewal of two wheeler policies. 

    The new POS guidelines will enable intermediary players in the insurance sector such as brokers in giving out comparative rates to appoint agents to work on their behalf. Under previous guidelines, only insurance companies could appoint dedicated agents for their business and one insurance consultant could sell policies only of one company. On the other hand, POS certified agents of brokers are allowed to solicit and sell retail insurance products for multiple insurance companies on the condition that they should already be per-underwritten. This for example includes motor insurance, simple health insurance and travel insurance.

    As per the latest guidelines, brokers with online comparison portals can now have agents working for them. What this primarily means is that apart from their primary platform, i.e. – online sales, these intermediaries can now also have offline sales agents to push sales in under penetrated markets. All the benefits of the online platform such as lower rates, hassle-free policy issuance, on the spot policy issuance etc can now be made available through a robust combination of physical agents and digital technology. This will lead to easier availability of motor insurance products / policies, say for example, in a petrol pump or a neighborhood store. Easier availability and sufficient push & encouragement from insurers / intermediaries will also improve insurance renewals and policy issuance, especially in the two wheeler segment.

    In the latest move to promote the penetration of two wheeler insurance and  also prevent the non-renewal of policies, IRDAI has also allowed insurance intermediaries such as brokers to sponsor the training and certification of POSagents. Motor insurance constitutes the second largest segment in the insurance space after life insurance. 

    Allowing intermediaries to appoint POINT OF SALEPERSONS to sell retail insurance will ensure greater adherence to insurance requirements as well as substantially improve insurance density by making policy purchases extremely convenient and easily available.  As the number of trained POS persons increases in the hinterland, this move will prove to be a game changer for insurers and intermediaries, especially for two wheelers in India’s auto insurance space.



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