Awash Insurance S.C. plans to start a clinical-trial coverage policy, submitted its proposal to the insurance supervision directorate at the National Bank of Ethiopia (NBE) last month.

If permitted, Awash will be the second insurance firm following the Ethiopian Insurance Corporation (EIC), the state-owned industry giant. Industry insiders see diversifying products as key to growth in the industry characterised by cut-throat price competition and low penetration of insurance policies.

A clinical-trail insurance policy provides coverage for participants of clinical trials, who are compensated for risking injury, disease or death in controlled studies and researches. Awash has been preparing its policy for nearly a month, setting a goal to generate up to 15 million Br in annual premiums, says Gudissa Legesse, CEO of Awash Insurance. It is five times higher than the target set by EIC from a similar product. Gudissa saw the firm's gross written premiums surpassing one billion Birr last year, the first among 17 private insurers, with over 30 life and non-life insurance products.

"The coverage will help researchers save on foreign currency," said the CEO, who expects no underwriting profit during the first year.

The 26-year old firm focused on research centres such as the Armauer Hansen Research Institute, the Addis Abeba University College of Health Sciences, the Ethiopian Public Health Institute and public universities.

"Researchers have asked us to introduce this policy many times," Gudissa told Fortune.

Clinical trials conducted in Ethiopia buy insurance coverage from firms abroad, where policies cost up to 14,000 euros.

Abebaw Fekadu is a professor of psychiatry at Addis Abeba University and director of the Africa Centre of Excellence for Innovative Drug Development & Therapeutic Trials. He believes the policy could help researchers cut down on forex expenditures but would have other benefits. The low risk involved for insurance firms, as the health and safety of participants is a priority in any clinical trial, could encourage them to offer the product, according to Abebaw.