Initiated as a replica of the airlines model, the first railway insurance scheme has witnessed a positive response. The scheme allows passengers to avail a maximum cover of ₹ 10 lakh, at an additional 92 paisa over and above the railway ticket charges.
Within 25 hours of the launch, approximately, 40% of the passengers booked, that is 2,22,605 of the 5,32,703 Passenger Name Records (PNRs) opted to be financially protected against permanent disability or death.
Under the initiative, a compensation of ₹ 7.5 lakh in case of partial disability, ₹ 2 lakh for hospitalisation and ₹ 10,000 for transportation of mortal remains will be given.
The Indian Railway has tied up with general insurance providers such as ICICI Lombard to give the passengersvaried options to avail the insurance cover. The Indian Railways and Indian Railways Catering and Tourism Corporation (IRCTC) will receive 7.5 paisa each, from the 92 paisa corpus. Subtracting the6-paisa service tax, the rest will be allocated to theinsurance company.
According to estimates, the e-ticketing system alone has the potential to generate ₹ 22 crore, while the revenues can rocket to ₹ 670 crore annually if the scheme is launched pan-India for 2.3 crore daily passengers.
Considered as a win-win situation for all as of now, a major challenge for the partner insurance companies in the future will be to tackle fake claims and accident liability due to technical failures.