Motor insurance is one of the coverages which is compulsory in almost every country. The laws and orders of every nation encourage citizens to buy a motor cover policy after purchasing a vehicle. 

The insurance industry is undergoing a transformative change due to innovations and increasing customer demands. People may notice various changes with the introduction of the PoSP concept. The insurance sector is coming up with different measures to meet the demand of buyers and comply with the latest trends. 

Emerging Trends in Motor Insurance

Insurtech Revolution

Insurtech (insurance and technology) is an emerging revolution in the insurance industry. It is a new way in which insurance companies operate and communicate with buyers. We may notice an increase in the Insurtech startups that support AI (Artificial Intelligence) digital platforms and data analytics. This helps improve the buyer experience.

The Insurtech evolution includes the following.

  • Digital Insurance Platforms: Many motor insurance companies are adapting to digital platforms to buy and manage motor insurance policies. This helps in simplifying the process of buying and selling the policies. Insurance policies become more accessible for buyers with the advent of digital insurance platforms. Now the buyer may check the types and coverage of motor insurance policy to better understand its features and benefits.
  • Artificial Intelligence: The insurance companies have jumped to the AI algorithm to better interpret the risk. This helps in finalizing the premium that the buyers need to pay while buying the insurance policy. The AI algorithm helps speed up the underwriting procedure. This also helps in improving the price accuracy. The motor insurance providers may easily assess the risk by using the AI algorithm and charge the premium accordingly.
  • Virtual Assistants and Chatbots: The technology has advanced customer service by providing virtual assistance. A buyer may visit the motor insurance company's website and find the chatbots. The buyer may write his query and get an instant response. This also helps buyers with efficient claim processing.

Introduction of PoSP Concept

The introduction of the PoSP concept brought many changes in the insurance sector. The IRDAI (Insurance Regulatory Development and Authority of India) introduced the PoSP in 2015. PoSP (Point of Selling Person) is another type of license that one may receive after fulfilling the eligibility criteria. This license allows a person to sell the policies directly to the buyer. This also includes a motor cover plan. A person needs to attend the training session and clear an exam to receive the PoSP license. One may sell many kinds of insurance policies after getting this license.

The IRDAI introduced the PoSP concept the meet the unique demands of people. The normal insurance agents were not able to meet such demands. Therefore, it was expected that the IRDAI to bring some changes in the insurance licensing process to meet these demands. So, IRDAI introduced the PoSP concept which made people entitled to work as an insurance PoSP and sell the policies to the buyer.

The IRDAI made it easier for everyone to enter the insurance market and sell the policy. A normal agent may also become a PoSP insurance agent and sell the policies. The IRDAI did not keep the PoSP limited to one insurance company. A PoSP advisor may sell different kinds of policies of many insurance companies. He does not need to associate with only one company. He may work with as many companies as he wishes and sell their policies. A PoSP advisor may also guide the client like a normal insurance agent and sell the policies. The PoSP works as a mediator between the insurance company and the buyer by selling the insurance policy. He also receives a reward on every policy he sells.

Benefits that People May Enjoy of Having PoSP Agent in the Future

Many people do not understand the complexities of motor insurance policy. They find many terms very difficult. People may also find motor cover more complex when compared to other insurance policies. However, with the advent of PoSPs, People may contact the PoSP agents when they fail to understand the terms and conditions of motor insurance policy. The PoSP guides the people in finding the most suitable policy that could meet their demands and needs.

Here are the benefits that people may enjoy of having a PoSP agent for the motor insurance policy. 

  • Understand the needs of the buyer: A PoSP agent understands the needs of the buyer. He contacts the buyers and asks about the coverage they wish to have in their motor insurance. He also interprets the budget and income of the buyer and offers the most suitable plan that fulfills the needs of the buyer. 
  • Product knowledge: The IRDAI offers training to the PoSP agents. This helps the agent in improving their knowledge of the motor insurance policy. A PoSP has complete knowledge of the motor insurance plan. He is familiar with the features, advantages, and disadvantages of different types of motor insurance. The PoSP shall be very beneficial for the people in the future. The buyer may easily contact the PoSP agents and ask them to explain the terms and conditions of different motor insurance policies. 
  • Help in the claim process: The PoSP insurance agent shall help the buyer during the claim process. He shall help them in filing the claim form. In addition, he shall also send the claim form to the insurance company and communicate with the company if the buyer wants.

PoSP advisor shall play a major role shortly in the motor insurance policy. Nowadays, PoSP agents collect the data of the buyers. Then, he calls the buyer and understands his needs for the motor cover plan. He also meets the buyers daily and resolves their queries after selling the policy.

Emerging Trend of AI (Artificial Intelligence)

Insurance companies are getting many benefits from employing AI. AI is helping the company in reducing the risks. Reduction of risk is the most important factor for an insurance company to survive in the market. It helps reduce the claims payout that the companies generally pay to the policy buyers.

Here are the benefits that the motor insurance company may expect from employing AI.

  • Increased sales: The insurance or PoSP insurance agent may easily sell motor insurance policies by using AI. It helps the companies and PoSP agent to increase their sales.
  • Personalized marketing: The AI also helps the PoSP agent to personalize the marketing. The agent may have one-to-one contact with the buyers.
  • Customer satisfaction: AI also helps in improving customer satisfaction. Many insurance buyers may easily understand the terms of the policy by simply writing their query in the chatbots section that the insurance company has added to its website.
  • Cost of product development: AI also helps in decreasing the cost of product development. This helps increase the profit.

Support of AI to Insurance Company

The AI is playing an important role in deciding the future of motor insurance policy. Here are the supports that AI offers to insurance companies and PoSP agents.

  • Claim Management: AI can easily manage the claim process. Many insurance companies are now using AI tools to manage and handle claims. The AI may take a picture of the damaged car and analyze the value of the claim that the buyer deserves. The AI values the claim based on the type of car and the level of damage and repair costs.
  • Fraud Detection: The AI is also fruitful in detecting the fraud. AI may easily catch fraud by understanding the behavior of the person who files the claim.

Here are the examples.

  • Filing multiple claims: AI may detect how many times a consumer files a claim. It also sees the period under which the consumer filed the claim.
  • Filing injury claims: The AI may detect if the injury claim does not match the reports of the accidents.

How AI Brings Changes in Car Insurance?

Motor insurance companies have now shifted to AI to sell insurance policies. This helps reduce the cost and minimize the working hours of humans. A PoSP may complete the 10-hour task in less than one hour. But, the future of AI in motor insurance looks different. The AI may easily assess the risk based on the profile of the driver. A buyer needs to pay more if he has a bad driving history.  At the same time, he may pay less if he has never met with an accident.

Also Read: Things to Know Before Purchasing Car Insurance

Objectives of AI in Buying and Selling the Policies

Here are the objectives of AI in buying and selling the motor cover policy.

  • Reduce human work: The AI technology reduces the work of PoSP agents. It makes the insurance purchase, claims, and renewal process easy and transparent.
  • Premium calculation: The insurance companies and PoSP insurance agents use AI to calculate the premium that they need to charge from the insurance buyer. The AI may quickly calculate the premium by analyzing the information and history of buyers.
  • Cost of repair: The AI may instantly calculate the cost of repair in case the car gets damaged.

Benefits of AI in Motor Insurance

Here are the benefits the AI provides in motor cover.

  • No physical inspection: The insurance companies or insurance agents do not need to send an examiner to assess the loss caused to the buyer. One needs to click the picture or shoot the video of the vehicle. AI shall manage the rest of the work. It shall calculate the risk and also detect if there is any fraud involved in the claim. 
  • Save time: Many buyers file insurance renewals every year. This takes a lot of time for the insurance company and PoSP advisor to manage the renewals. However, the insurance companies may complete this process in less time by using the AI. 
  • No paperwork needed: The insurance agent does not need to do any paperwork while selling the motor cover policy. He only needs to enter the correct details of the buyer in his device.
  • Increase efficiency: AI speeds up the activities of claim processing, underwriting, etc.
  • Reduce PoSP agent's work: AI automatically calculates the risk and detects the fraud. This helps in reducing the PoSP agent's work. 
  • Reduce human error: AI does not make any mistakes. It can handle complex tasks and complete them without any errors.
  • Better Understanding of Risk: AI helps insurance companies figure out how likely it is for someone to have an accident. This way, they can set fair prices for insurance.
  • Spotting Cheaters: AI can catch people trying to trick the system by looking at data and figuring out if a claim seems fake.
  • Faster Help After Accidents: With AI, getting money after a car accident can be quicker. Machines can help sort things out, making the process smoother.

To simplify, one may say that AI saves time and does not require any paperwork. It helps increase efficiency and reduce the work of the PoSP agents. It also makes the inspection and calculates the claim that the buyer deserves. AI reduces human error and spots the fraud involved in the claims.

Conclusion

The AI and PoSP agent shall play an important role in the motor insurance policy. The PoSP agent is likely to replace the normal agents as more people want to become PoSP agents. A PoSP may sell different kinds of products to many insurance companies. This is why people prefer to become the PoSP agent. It is also easy to become a PoSP. One only needs to attend the training session and clear the PoSP exam to get the license to sell the policy.