In India, the penetration of Insurance is quite low. The main reason behind this lagging is the shortage of trained professionals who can be employed as Distributors or Agents. Ranging from simple products to complex products, it is mandated that only a registered distributor can sell the policy from a specific insurer.
However, this format has slight change with the introduction of Point of Sale (POS) for Insurance. The Insurance Regulatory and Development Authority (IRDAI) have allowed a POS person to sell policies. POS can augment the current insurance distribution workforce and contribute to an elevated degree of sales with little training and qualification needed to sell the simpler insurance products. Any individual whose age is above 18 years with a minimum of 10th standard pass qualification can become a POS person and has to undergo simplified training and clear the respective examination. The insurer or intermediary will then issue a certificate and maintain the records for a span of at least 5 years. Thus, the input from POS not only helps in widening the range of products available to customers but also improves the quality of service offered to the customers.
Below stated are some of the pros of becoming a POS in the insurance sector:
You get multiple opportunities
One of the most exciting pros of POS is that he/she can work with more than one insurer. Recently, one POS was associated with only one company but with the change in the regulations, now a POS can sell insurance products for multiple insurance companies.
Easy mode of getting trained
This is one of the major advantages that work in favour of the POS. The Point of Sale person can be trained either online or offline through a reliable financial product agency or through an insurance broker and get started with a bright career.
At first, only the National Institute of Electronics and Information Technology (NIELIT) could certify the trained POS, however this has been relaxed from 7th of February 2017. Based on this, an insurer, broker, or intermediary in the business can train the Point of Sale person. This kind of training would facilitate quicker on boarding of the POS salespeople. The trainers need to conduct training for at least 15 hours and later examine the candidate with an objective paper to certify the POS.
Products that can be sold by POS
As per the IRDAI standards, a POS can sell term insurance plans, travel insurance plans, motor insurance and non-linked endowment plans. However, the term insurance plans may or may not have returns on the product. Moreover, there are three norms based on which the POS can sell the products. Those norms include that the plan should be easy to understand and explain, secondly the plan should state the investment benefits beforehand. Lastly, the plan benefits should be fixed, non-fluctuating and pre-defined.
Offering enough time for the current workforce to focus on complex products
The new arrangements work best for simpler products such as motor insurance or travel insurance as these products are quite easy to understand and do not require too much of underwriting efforts to sell the product. These products come under the ambit of an insurance POS and frees up the current full-fledged distributors to sell more of the complex products like ULIPs and deferred annuity plans.
The following benefits of POS would help the insurance industry to boost their business and reach to a larger crowd across the nation.
By: Mr.Rakesh Goyal, Director, Probus Insurance Broker Ltd.