Reaching every doorstep: point of sales person strategies for extending insurance coverage to all

The Indian economy is unquestionably set to become the third largest globally and expected to reach a GDP of $5 trillion in the next three years and a staggering $7 trillion by 2030. This growth will reflect in all sectors of the economy, including the insurance industry, which is projected to be the sixth-largest insurance market worldwide by 2032. 

This tremendous growth can be attributed to several factors including increased awareness around protection tools, a rise in disposable income levels, and transformative regulatory developments.

Despite this phenomenal growth, a ‘missing middle’, particularly in Tier II and III cities, still remains underinsured. People in these areas research insurance products on the internet but don’t want to transact online. Instead, they prefer to buy from a local touchpoint who can address their queries and assist them in person. 

To address this gap, the Insurance Regulatory and Development Authority of India (IRDAI) revised the guidelines for the point of sales person (PoSP) model in 2015. This enabling initiative by the regulator is helping the industry secure lives across the nation and extend the protective umbrella of insurance to every Indian. 

Under the PoSP model, people from local communities are trained to become agent partners to sell insurance products directly to customers. This includes extensive training, ranging from product knowledge to advanced technology. 

These partners use their local networks to foster trust and provide personalised services, bridging the gap between insurance providers and potential customers in Tier II and III cities. By merging in-person interactions with digital resources, they enhance accessibility to protection tools and simplify the buying journey, driving financial inclusion across demographics.

Enhancing local reach with a national outlook

Insurtechs who have adopted a PoSP model prioritise local engagement while leveraging their national expertise. 

PoSPs with a national reach harness their comprehensive understanding of broader market trends, regulatory frameworks, and industry best practices to tailor solutions that resonate with local communities. PoSPs recognise the need to customise solutions to fit the unique needs of each community rather than taking a one-size-fits-all approach. 

This localised approach not only enhances customer satisfaction but also fosters loyalty among customers who feel genuinely understood and supported. 

Fostering trust through a phygital approach

Historically, trust has been a major barrier to insurance purchases in Tier II and III cities. As a matter of fact, almost 80% of Indians consider buying insurance only on the recommendation of close friends or a known agent. PoSP agent partners are equipped to tackle this challenge head on by being physically present in such areas to solve any queries from customers. 

These partners also have all the information they need at their fingertips: from comprehensive insurance plans to competitive quotes. By combining the personal touch of local agent partners with the efficiency and reach of digital platforms, PoSPs are effectively bridging the last-mile gap in insurance delivery and ensuring that insurance reaches every Indian, urban or rural.

Tailoring services through grassroots feedback

By being present on the ground and interacting with potential customers, PoSP agent partners are able to gauge what consumers are really looking for in an insurance product. They possess invaluable insights into the socio-economic backgrounds, cultural nuances, and risk perceptions of their customers. 

By actively soliciting feedback and listening to the concerns of the consumers, PoSPs can effectively partner with insurtechs to tailor insurance products that address the specific needs of people in such underserved areas.

Leveraging technology for accessibility and convenience

The infusion of technology into the PoSP model amplifies its efficacy in making insurance accessible to the masses. PoSPs leverage digital platforms not only for customer outreach and education but also for streamlined administrative processes. 

Mobile applications and online portals empower PoSPs to efficiently manage customer queries, process applications, and provide real-time updates, creating a seamless and responsive insurance ecosystem. AI tools like PB Inspect help agent partners process motor claims seamlessly and swiftly. Also, advanced payment mechanisms, like on-demand payout, enable agent partners to request a payout at their convenience anytime during the payment cycle through WhatsApp chatbot.

A model that benefits all stakeholders

The PoSP model benefits all stakeholders involved, not just end customers. PoSPs, being integral members of local communities, not only bridge the trust deficit but also catalyse economic growth by becoming micro entrepreneurs. This model aligns with the broader national agenda of financial inclusion and empowers people in rural and semi-urban areas to make informed financial decisions. 

Insurers, on the other hand, gain a competitive edge by expanding their market penetration and tapping into previously unexplored areas. The PoSP model also allows insurers to optimise their distribution channels, which ensures a cost-effective and efficient means to reach the masses.

As we witness the ripple effects of this model across the nation, it’s evident that by reaching every doorstep, we are not just extending insurance coverage to all but also laying the foundation for a more resilient and prosperous India.

The author is Chief Business Officer, PB Partners.