Fortune News | Jul 11,2021
September 4 , 2021
By BERSABEH GEBRE ( FORTUNE STAFF WRITER )
The Ethiopian Insurance Corporation (EIC) is gearing up to provide a clinical trial insurance policy, a first for the industry.
The new product covers policyholders on research subjects (individuals) participating in clinical trial studies, in case of unforeseen circumstances.
Commanding 50pc of the insurance market, the Corporation's executives hope the policy will attract research institutions such as the Armauer Hansen Research Institute, the Addis Abeba University College of Health Sciences and the Ethiopian Public Health Institute. It will be a part of the life insurance line of business, which accounts for almost five percent of its gross written premiums.
"We'll start with coverage for clinical trials only related to COVID-19 and then launch another policy for all trials by widening the scope," said Mengistu Meharu, deputy CEO of the Corporation.
The EIC expects three million Birr in annual premiums from the new product. This equals less than one percent of the company's 6.1 billion Br in gross premiums it wrote last year, enabling the state-owned firm to give coverage for policyholders without the involvement of a reinsurance company.
"We don't need to share the risk with reinsurers as we can cover it on our own," said Mengistu.
Under the leadership of Netsanet Lemessa, chief executive officer, the executives of the Corporation are awaiting a nod from regulators at the National Bank of Ethiopia (NBE) to start the COVID-19 clinical trial insurance policy. The NBE reviews a feasibility study from the Corporation, preparing to do the same for the policy that covers all clinical trials.
In the event of physical harm to the patient through the clinical trial or health impairment and death, policyholders can claim up to 100,000 Br in a claim for research subjects, with the premium rate expected to be 2,000 Br. The claim increases with premium rates.
Abebaw Fikadu, a professor of psychiatry at Addis Abeba University, is the director of the Africa Centre of Excellence for Innovative Drug Development & Therapeutic Trials. He finds the introduction of the new policy by the Corporation timely.
"It'll save foreign currency," said the Professor, who has previously participated in clinical trial projects undertaken in Ethiopia, using insurance coverage from companies in Europe, costing between 7,000 dollars and 50,000 dollars.
Abebaw participated in seven large clinical trial projects over a decade. He believes the risk for the policy would be insignificant.
"There was not a time when we encountered problems, nor asked for a claim," said Abebaw.
Other insurance companies have undertaken studies to start providing the same service. The leading among private insurers with a gross written premium of over one billion Birr, Awash Insurance is among these firms.
"There isn't a large market for such a policy in the country," said Gudissa Legesse, CEO of Awash Insurance. "We're undertaking a study to examine its feasibility, however."
The Ethiopian insurance market is in its infancy, characterised by low insurance penetration levels and cut-throat competition.
Recently, the Association of Ethiopian Insurers, representing 19 firms, proposed a minimum premium rate for bond and guarantee policies, the first of its kind. They are awaiting the approval of the National Bank of Ethiopia (NBE).
PUBLISHED ON Sep 04,2021 [ VOL 22 , NO 1114]
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