Prabhu’s insurance scheme for rail passengers a runaway success
The first-ever rail travel insurance scheme has evoked a positive response, with approximately 40% of all passengers who booked e-tickets in the first 25 hours of the launch of the initiative opting for the `10 lakh cover.
Replicating the airlines model, railways minister Suresh Prabhu had inaugurated on Thursday an insurance cover of a maximum of `10 lakh for rail passengers willing to pay an additional 92 paisa above the passenger fare.
Within 25 hours of the scheme’s launch, 2,22,605 of 5,32,703 Passenger Name Records (PNRs) booked had opted for the insurance cover for permanent disability/ death. A compensation amount of up to `7.5 lakh has been fixed for partial disability and up to `2 lakh for hospitalisation. An amount of `10,000 has been decided as compensation for carriage of the mortal remains of a deceased.
The plan — seen as a windfall for insurance companies and an opportunity for the state-owned transporter to ramp up its nonfare earnings — envisages travel insurance cover from any of the three firms taken on board by the Railways: ICICI Lombard, Royal Sundaram and Shriram General.
Minus the 6 paisa service tax component, the Railways and the Indian Railways Catering and Tourism Corporation (IRCTC) will get a share of 7.5 paisa each from the insurance corpus, while the remaining 71 paisa will go into the account of the insurance companies. Estimates are that `22 crore can be generated through the e-ticketing system alone, while revenues can go up to `670 crore annually, if and when the scheme is extended to all the 2.3 crore passengers travelling daily on India’s 65,000-kilometre network.
Insurance companies want more safeguards for tackling fake claims, as also to ensure that they are not made liable for accidents caused on account of “technical failures”.
“We will face the issues as they come. As of now, we regard the scheme as a win-win situation for all,” said Royal Sundaram country head Deepankar Acharya.