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The PoSP Model Is Changing The Landscape of India’s Insurance Industry

Submitted by admin on May 10th, 2024

The PoSP model, based on high-end technology and regulatory frameworks, presents a golden opportunity to tap into the untouched segments of the population and give an organic boost to greater insurance purchases.

India’s insurance industry has oceanic potential. It is already forecasted that the middle-class segment will welcome 14 million people into their fold by 2030. Still, the insurance industry is struggling with a poor penetration rate of 4 percent compared to seven percent which is a global average.

A multidimensional approach is important to eliminate the disparity. This involves increased awareness, improved customer trust, and new distribution channels in the entire system. A leading industry report titled “How India Buys Insurance?” claims that more than 80 percent of policyholders, particularly from Tier-II and Tier-III cities, usually do their homework online but make a purchase offline.

Knowing the agents and trusting them is essential for this demographic. IRDAL has launched PoSP i.e. Point of Sales Person model to sell simple insurance policies easily and penetrate deeper into the untapped segment of society.

This is a compelling model that merges a human interface with advanced technology to make the companies’ insurance journey easier, smoother, and more trustworthy to consumers. This model puts insurers, agents, and consumers in a win-win situation.

It has already gained rapid popularity with more than 20 lakh PoSP agents across the country. It provides them with improved earning opportunities whereas insurers stand to gain benefits by tapping underprivileged sections and customers have a local touchpoint for all their insurance requirements.

Leveraging Powerful Phygital Via PoSP

Agents’ empowerment is the core concept of the PoSP model. It can be achieved through comprehensive training, access to modern technology, and lucrative compensation structures. All these empower agents to provide customized support and guidance to policy owners, resulting in more informed decision-making.

Seamless integration of modern digital tools with conventional agent networks has enabled the PoSP model to improve distribution efficiency while retaining the human interaction touch in sales.

Furthermore, when agents are equipped with a wide range of investment options and insurance policies, insurance companies can reach out to a large number of customers and meet their needs and preferences. This helps insurers find a strong foothold in the industry’s core workings.

The PB Partner network has already 19.1k pin codes covered across India. Tier-II and Tier-III have already adopted almost half of the incoming business.

Service: The Future of India’s Insurance Industry  

The insurance sector is treading on the trajectory towards a service-centric approach. There is a remarkable shift towards developing customized insurance products that are perfectly aligned with individuals’ unique needs, personality traits, and lifestyles.

Furthermore, the integration of data analytics has completely changed the way risks are assessed in this industry. The transformation has enabled insurance companies to develop more precise pricing strategies, thereby achieving the optimal balance between risk and coverage.

The PoSP model is important in the entire scenario. It provides customers with a perfect blend of all factors that one would prefer for their insurance experience.