Difference Between an Insurance POSP and Insurance Agent

The insurance industry has opened its doors to every individual to attain career opportunities by being an agent with them. With the expansive population of India, it was learnt that there is a growing demand for acquiring insurance. Therefore, the POSP Insurance agent was introduced. 

A POSP full form in insurance means Point of Sales Person i.e. the person acting as a focal point to serve and fulfill your insurance requirements. 

Why POSP Agent?

A POSP Agent is a Point of Sales person who helps prospective clients acquire insurance. 

With the current ecosystem, every individual finds the need to have at least one policy to safeguard their near and dear ones. This may have come as an eye opener during the pandemic to have acquired and safeguard the basic insurances in place. 

An Insurance agent is mostly committed to selling one type of insurance in which he acts as a specialist. While a POSP agent, can offer one or all types of insurance. However, there stays a difference between an Insurance Agent and POSP Agent. 

The idea to introduce the POSP model is to create a strong distribution model. In most cases, the insurance agents concentrate on high value products, while the POSP insurance agent intends to sell over the top products i.e. they can sell only products that are pre-underwritten and approved by IRDA.  Hence, an insurance agent sells limited products for a higher value and a POSP Agent sells many products with a lower value.

The advantage of being a POSP agent is he/ she isn’t restricted to one type of insurance. He has the privilege to cater to multiple insurance segments simultaneously. 

How is an Insurance Agent different from a POSP

Insurance AgentPOSP Agent
Serves as a specialistServes as a Point of Sales Person
Sells high value products   Sells over the top products
Cross-sells to his existing clients Acquires new clients
Caters to a single product at a time  Caters to life and non – life product both
Mostly provide services in major cities –
Provide services in towns and semi urban areas
Provide services in towns and semi urban 

Qualifications Required

One has to fulfill certain norms to qualify to be any of the above agents. 

To be an insurance agent one has to have obtained its 12th class certification as a mandate document and should have completed 40 hours of training. Post which , one can possess the pride of being an Insurance Agent by passing an insurance agent exam.

To become a POSP insurance agent online

One needs to have passed its 10th class and completed a 15 hours training provided by the IRDAand should have passed an IRDA test. Once done, he shall be a certified POSP agent. However, the certification of a POSP agent lies for a period of 5 years. 

The POSP Agent tries to penetrate into the market deeply but with basic products. While an insurance agent would like to act as a specialist to one product and cater to a selective group of clients.

How does a POSP and an insurance agent earn?

The insurance industry works on a simple formula of selling products offered by insurance companies. To sell these products, one has to register as an insurance agent. The insurance agent further earns through commission that forms a percentage of the premium paid by the insurance holder.

Conclusion

Although the two serve the same line of business, the insurance agent looks for opportunities within a certain parameter and opt for one product with high commission value vs a POSP who would go rather with masses and serve mostly in small graffiti units. This encourages a POSP to grasp more new clients rather than serving the same client. Also, this helps in leverage a large network of many units.

Choice Connect allows the insurance agent as well as the POSP to become a CBA (Choice Business Associate) and earn great incentives by offering their clients the best suitable policies.

Saurabh Chaudhary
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