The Lagos State Government, in partnership with the Insurance Development Forum, the United Nations Development Programme, and Germany’s BMZ through the InsuResilience Solutions Fund, has completed the design of a $7.5m parametric flood insurance product.
According to Reinsurance News, the solution, which targets climate resilience, is expected to provide swift financial relief to up to four million residents in the event of severe flooding.
According to the IDF, flooding in Lagos State disproportionately affects poor and vulnerable populations, while climate change is reportedly increasing the frequency and severity of such events.
“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,” the IDF explained.
With the product, the Lagos State Government will be able to access funds to support emergency response efforts. This includes disaster relief and direct cash transfers to affected communities.
Regulatory approval has been secured for the product, with the next steps set to include the state government securing premium financing arrangements.
Special Adviser to the Governor of Lagos State on Sustainable Development Goals, Dr. Oreoluwa Finnih, said, “The delivery of this parametric flood insurance solution is a vital 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.”
Chair of the IDF Operating Committee, Managing Director, and Executive Advisor at Swiss Re, Ivo Menzinger, said, “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.”
The Head of the InsuResilience Solutions Fund, Dr. Annette Detken, noted, “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.”
