Private Insurer to Recompense Semnan Train Crash Victims

EghtesadOnline: Parsian Insurance Company, affiliated to Parsian Bank and one of the four major private insurers in Iran, will compensate the victims of Friday’s train crash in the north central province of Semnan, in which tens of people died and many others were injured.

News ID: ۷۷۱۷۵۸

28 November 2016

According to local officials, the collision happened at the Haft-Khan station near the city of Shahroud around 7:40 a.m. local time on Friday, leaving at least 44 dead and 103 injured.

The accident happened when a passenger train, en route from Semnan to Mashhad collided with the rear end of a Tabriz-Mashhad passenger train which had stopped due to technical problems apparently duet to the freezing weather.

Parsian is the insurer carrying personal accident policies for passengers of Islamic Republic of Iran Railways. Based on the contract, Parsian is set to pay roughly 500 million rials ($15,580) for compensating medical costs to the injured, the insurer announced in a press release on Saturday.

Parsian should also pay blood money to families of those who lost their lives in the incident, which amounts to 1.93 billion rials ($60,000) per person.

“Currently our experts are in the area and will soon prepare a comprehensive report on the accident,” reads the press release.

Abbas Akhoundi, the minister of roads and urban development and Abdolnasser Hemmati, president of the Central Insurance company of Iran in two different statements assured the injured and families of the deceased that they would be quickly indemnified.

Hemmati called on Parsian to finalize investigations as soon as possible and compensate the victims.

Parsian faces a bill of around 220 billion rials ($6.8 million) in compensation costs, according to Risk News.

As per law, insurers have to pay at least 50% of the [estimated] losses before official probes are concluded.

Four train coaches got derailed and two caught fire in the accident which left the country in shock. It is not clear whether Parsian is also obliged to compensate the damage to the trains.

Causes

Mohsen Pour Aqaei, head of Iran Railways, on late Friday said “human error” was the cause of the accident.

“Early investigations show that the Tabriz-Mashhad train had broken down and had to stop for repairs. Controllers had halted all the trains from travelling on that route. Not informed about the issue, the next shift controller allowed the trains to move toward Mashhad,” he said.

The first train had stopped behind a curve, “out of the sight of the other train’s driver,” the official added.

High speed of the Semnan-Mashhad train and the ATC (Automatic Train Control) safety system not working properly might be other causes of the crash, according to Financial Tribune.

Three people in connection to the accident were detained.

Insurer’s Status

Data derived from SANHAB, the insurance industry’s online database, shows that Parsian Insurance, during the six months ending in September, earned 433.7 billion rials in premium ($13.5 million) in the liability category, which includes railways coverage. The category accounted for 5.4% of the insurer’s earnings.

During the period, Parsian paid a total of 164.1 trillion rials ($5.11 million) in indemnities to 8,600 claimants in the liability category.

Parsian’s payout ratio stood at 40% for liability insurance category, and 50% for all categories up until September 21.