Apart from being a captive market, employee customers are the best brand ambassadors a company can hope to achieve. If you can sell internally, then the success of external marketing is assured a maxim well understood by the FMCG sector.

But strangely it is not so with the four public sector general insurers: National Insurance, New India Assurance, Oriental Insurance and United India Insurance. It is their policy to shun underwriting properties house and its contents, vehicles and others of their own employees.

Following the universal principle of insurance contract utmost good faith while underwriting outside risks, it is an utmost bad faith principle that is adopted when it comes to insuring assets owned by the staff. However, employees of one company can insure their properties with other three insurers at three-fourths of the actual premium rate. But they are reluctant to do that because of the procedural hassles and customer service levels that are either equal or are worse.

It is no wonder that companies have grossly failed in penetrating the market effectively as majority of their own staff including the marketing staff and agents have not taken personal insurance products like householders and personal accident insurance policies.

But what the managements of these companies have not realised is the large potential they have neglected all these years. Each of the four companies boasts an employee strength of 20,000. The average premium potential from them is not less than Rs 1,000, working out to Rs 2 crore per annum, equalling the premium target of a divisional office.

Why are the government insurers not exploiting the potential that exists under their own noses? Says United India Insurance CMD V Jagannathan: "Employee properties were not insured by the company as it was not allowed by the General Insurance Corporation of India (GIC) earlier." Says an employee of one of the insurers: "It is basically due to distrust that they have not done that." The management fears that employee policyholders would get their bogus claims settled without any hassle.

The managements fear is not unfounded. United India, some time back, blacklisted around 15 hospitals in Tamil Nadu as they colluded with its employees in defrauding the company by providing false medical records and bills. In the case of the group medical insurance scheme, claims are processed and paid in-house, though the policy is issued like any another government insurer. Like a reinsurance claim, companies can claim refund from the policy-issuing company. Sometime back the companies jacked up the premium rates by a whopping 150 per cent.

"With the delinking of four companies from GIC, we are now looking at the issue in a different perspective," says Jagannathan. What he and his counterparts should realise is that if the companies distrust their own employees, then measures like the company anthem to create a sense of belonging towards the company among employees will be of no use.

So, the next time you come across a person from any one of the four companies who cannot explain you about a product, you know the exact reason for that non-usage.