Insurance payouts to railway passengers rise despite reduction in train accidents

Insurance claim payment to train accident victims have increased by five times in FY18 against the previous fiscal despite drop in the number of accidents. This trend is visible mainly because of IRCTC has extended free insurance cover to passengers booking online tickets starting December 2016, as part of the Governments digital push. Insurance Companies paid a total claim of Rs. 3.5 crore in FY18 from insurance companies, 5 times of Rs. 75.5 lakh paid out in FY17. The optional travel insurance scheme is handled by three companies: Royal Sundaram General Insurance, Shriram General Insurance and ICICI Lombard General Insurance. Paying Rs. 1 for insurance up to Rs. 10 lakh was optional for online ticket booking between September and December 2016. A larger segment passengers who booked tickets online opted out of the insurance scheme. The fact that the scheme started in September 2016, half-way through FY17, was also a reason for the lower numbers. From December 2016, the insurance scheme was made available free of cost for all e-tickets, with IRCTC bearing the cost. The digitisation push of November 2016 is hitting on IRCTC pocket. Not only did it lose earnings from the service charge on e-tickets, it also ended up paying insurance premium for an increasing number of passengers (about 65 per cent of the total) booking tickets online.