According to Irdai, PoSPs for life insurance are individuals who have the minimum qualification and have passed the examination conducted by either the life insurer or the insurance intermediary.
Asia’s oldest exchange BSE and its JV partner Ebix are set to launch their insurance distribution business next month. The venture, branded BSE-Ebix Insurance Broking, will enable distribution outlets, wealth management advisers, and Points of Sale Persons (PoSPs) to sell life and non-life insurance products.
Penetration of insurance has remained low in India compared with other countries and this move is likely to improve the reach of life as well as non-life insurance products in the country.
According to the Insurance Regulatory and Development Authority of India (Irdai), insurance penetration (both life and non-life) for 2018 was just 3.70% whereas other countries such as Thailand, Australia, Singapore and Germany have a penetration of over 5%.
Ebix, a leading international supplier of on-demand software and e-commerce services to the insurance, financial, healthcare and e-learning industries, on January 7 announced that it had received a formal approval for certificate of registration to act as a direct insurance broker (life and general) under the IRDAI (Insurers Brokers) Regulations, 2018.
BSE MD & CEO Ashishkumar Chauhan said: “We are planning to launch the insurance distribution business by early February and have completed a bouquet of financial products, including insurance. We want to empower our distribution partner with the best of technology for insurance.” He also added that products would be sold PoS persons.
According to Irdai, PoSPs for life insurance are individuals who have the minimum qualification and have passed the examination conducted by either the life insurer or the insurance intermediary. Point of sale products in life insurance mean plain vanilla products wherein each and every benefit is predefined and clearly disclosed upfront at the time of sale. While for non-life insurance, a person who can solicit and market only certain pre-underwritten products approved by Irdai will be point of sales person. For example, many products in motor, travel and personal accident insurance require very little underwriting and are largely pre-underwritten products.
In a recent interview with FE, Chauhan had said margins in the traditional stock broking industry have come down to zero or negative and focus was on the distribution side which had higher margins for their members.
BSE-Ebix aims to offer choices to customers besides reaching to remote villages across India to access these products. The venture will make use of the reach of both BSE and EbixCash and would cover the entire insurance life cycle – from customer relationship management, agency management, multi-quoting, underwriting, policy creation, and claims filing to the insurance company and coordinating with it for settlement, and back-end insurance policy administration.
EbixCash is the Indian subsidiary of Ebix.