The Lagos State Government, in collaboration with the Insurance Development Forum (IDF), the United Nations Development Programme, and Germany’s BMZ through the InsuResilience Solutions Fund, has completed the design of a $7.5 million parametric flood insurance product.
A news story from Reinsurance News, an industry-focused online medium, the fund, which targets climate resilience, is expected to provide financial relief to up to four million Lagos residents in the event of severe flooding.
The IDF noted that flooding in Lagos State had been disproportionately affecting the poor and vulnerable residents, while climate change continued to increase the frequency and severity of such events.
The Forum stated: “The innovative parametric insurance product is projected to protect up to four million people by enabling swift financial support when pre-agreed flood triggers are met, based on satellite flood footprint data. In the event of a catastrophic flood, the product could provide access to up to $7.5m in coverage.”
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With the parametric flood insurance product, Lagos State Government will be able to access funds to support emergency response efforts, including disaster relief and direct cash transfers to affected communities.
Already the regulatory approval for the product implementation has been secured and what is needed now is for the state government to secure premium financing arrangements.
Commenting on the deal, Special Adviser to Lagos State Governor on Sustainable Development Goals (SDGs), Dr. Oreoluwa Finnih, described the delivery of this parametric flood insurance solution as a major milestone in strengthening Nigeria’s adaptation to manage climate risk.
“It exemplifies the innovative public-private partnerships needed to build fiscal resilience and help communities prepare for climate impacts. We look forward to seeing this product implemented and protection in place for Lagos State”, the governor’s aide added.
In his remarks, Chair of the IDF Operating Committee, Managing Director, and Executive Advisor at Swiss Re, Ivo Menzinger, enthused: “This milestone demonstrates the power of collaboration between government, insurance, and development partners. The design phase harnessed the industry’s technical expertise in flood risk modelling and parametric insurance to develop a tailored, scalable solution for Lagos. We are committed to supporting local ownership as this solution moves towards regulatory approval and integration into government systems.”
Also, the Head of the InsuResilience Solutions Fund, Dr. Annette Detken, said: “This achievement marks a pivotal step in our mission to build climate resilience through innovative risk financing. By supporting the development of this parametric flood insurance solution for Lagos State, the ISF is helping to unlock timely and reliable financial protection for those vulnerable to climate-related disasters.
“This is precisely the kind of locally owned, scalable solution the Tripartite Programme was designed to deliver, one that strengthens systems, builds capacity, and lays the foundation for long-term resilience in Nigeria”, Detken added.
