Despite this card's type, it not seems to be a real Insect, but an humanoid figure in an armor that just resemble a Beetle.
In Greek mythology, Poseidon was the god of the sea.
It seems possible that this card is based on the Godzilla character Megalon, as Megalon was a giant beetle who was worshipped by an undersea people. This may also be why the card is equated to Poseidon.
The idea of this card probably stemmed from a type of Rhinoceros Beetle called the Neptune Beetle. Neptune is Poseidon's Roman name and the beetle was named thus because it's horns evoke the imagery of Poseidon's famous Trident.