Mumbai/Chennai: To minimise financial losses to passengers from untoward incidents, the Indian Railways is working with insurance companies to offer optional travel insurance for train journeys at the time of booking.
The proposed cover will provide insurance protection against train accidents, hospitalisation due to such mishaps and baggage loss. According to estimates, there are 13 million rail passengers daily and assuming that even 30 per cent of the passengers opt for insurance cover, the opportunity could range between Rs 50 crore and Rs 100 crore of premium.
Shreeraj Deshpande, head of health insurance, Future Generali India Insurance said, “This is a good initiative as it increases insurance penetration and gives some financial protection to passengers against unfortunate circumstances while travelling. These policies will also fit the pocket of travellers as these may be priced as per the duration of the journey.
Having said that, the most important aspect is how these insurance policies will be made available to customers because there are two places from where travellers buy insurance -- online or at the window. Hence, the mode and ease of purchasing these policies will be important factors to be consi dered.”
“This is an important opportunity as it will cover passengers for hospitalisation due to accident, personal accident and loss of baggage. Passengers should be encouraged to look at it. The government should provide customers to buy the cover online on the railway ticketing system.
This will help insurers to get the precise details of customers which in turn will help in speedy settlement of claims,” said Sanjay Datta, chief underwriting, claims and reinsurance at ICICI Lombard General Insurance.
Currently, airlines offer the option of insurance to customers while booking their flight tickets. Domestic travel insurance products for rail and air passengers cover trip cancellation, accidental death, accidental medical expenses, accommodation charges due to trip delay and emergency medical evacuation benefits.
Travel insurance currently accounts for a miniscule portion of the total premium of the insurance sector, but is growing in healthy double digits on a small base. Of this, more than 90 per cent of the premium comes from outbound travel.
Travellers give the least importance to insurance when travelling within India and only two per cent of them buy travel insurance policies for domestic trips, as per data from Bajaj Allianz General Insurance.
M Ravichandran, president, insurance, Tata AIG General Insurance, said, “Presently, the Indian domestic travel insurance market is about 8-10 per cent of the total travel insurance market of Rs 500 crore. Out of the current domestic travel insurance market the major chunk is generated by the airline sector. Hence, this move will only help to increase the penetration of travel insurance in India through the railway sector.”
