Saturday, March 14, 2009

BSNL’s Accident Insurance scheme: Just a Gimmick?

BSNL's  Accident Insurance scheme: Just a Gimmick?

Dr P Vyasamoorthy

[BSNL offered last year a free accident insurance facility to each and every subscriber to the tune of Rs 50000/- Looking at the way it was implemented, one doubts whether the whole scheme is just a gimmick]


Last year BSNL announced Accident Insurance free of cost to all its subscribers. The scheme included all of 3.37 Crore BSNL subscribers of all categories – Landline, Mobile or WLL. The sum assured per subscriber was Rs 50000/-. It was an accident cum death due to accident scheme. Permanent total disability is defined as: loss of both eyes or loss of both limbs or hands or a hand and a limb. Natural or suicidal death was not covered. Only individuals were covered as against corporate subscribers. In case of subscribers having more than one phone line each subscription was eligible for Rs 50000 with a cap of Rs 2 Lakhs.


The eligibility was automatic. No application or medical examination was required. Bajaj Alliance (75%) and Oriental Insurance (25%) were the insurers. All claims need to be made to the former at their Pune Office with applicable attachments. Complete details are available in BSNL website. The scheme was experimental one lasting just for a year effective till 13th January 2009.


With competition growing hot BSNL was losing out Landline subscribers. To arrest the attrition rate and to boost the corporate image especially prior to IPO (which, incidentally did not  materialize)   BSNL initiated a series of actions to boost the sagging brand image. Some of the actions taken included: Frequent downward revision of tariff rates; Offer of innovative combo schemes for Landline and Broadband; incentives aimed at different sections like students and government employees etc. They also threw in another gimmick: This free accident insurance scheme.


Why I call that a gimmick is that there no real commitment seen to benefit subscribers through this unique scheme. First of all, though the scheme was effective since middle of January 2008 details were made available after a lapse of six months. There was no aggressive publicity to popularize the scheme. Enquiries were attended to with lukewarm interest. The GM of BSNL Goa publicly admitted (lamented) that there were no takers (meaning no claims) as of November 2008. Others were simply silent.


When a substantial sum of money is spent as premium to insurance companies by way of such group insurance schemes and BSNL is lethargic about its implementation one tends to suspect that the whole thing is just a gimmick. There may be some tacit understanding between BSNL and Bajaj Allianz in fooling the public. They are hand in glove I feel. If this is not the case can BSNL publish data regarding premium paid, claims made and amounts disbursed by the insurer?


In Hyderabad alone about three persons die in traffic accidents every day. And a large number suffer serious injuries. On an all India basis about 2% of all deaths are due to traffic accidents. Many of them must be having BSNL lines either Land line or Mobile. If you consider other types of accidents the number of victims must be more. What percentage of these accident victims were aware of or ever claimed compensation from BSNL is a mystery. 


One way to tackle such half baked schemes is to encourage "ambulance chaser" lawyers as in the west. Lawyers abroad take up cases of accident victims on their own to get compensation from insurance companies. They do not ask the victim to pay any fee. Fees are collected when Insurance claim materializes. We need such aggressive guys who do follow up in genuine cases. This will expose gimmicks played by public sector firms in collusion with private insurers.



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