The Lagos State Government has secured a $7.5 million flood insurance policy expected to provide relief for vulnerable residents when a disaster hits.
The policy covers up to four million people in the coastal megacity, according to a statement on Thursday by the Insurance Development Forum, a public-private partnership that works with some of the world’s largest insurers to bridge protection gaps in vulnerable markets.
The policy activation marks a major milestone for the Tripartite Agreement Programme.
The programme is a partnership between the Insurance Development Forum (IDF), the United Nations Development Programme (UNDP), and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), working through the InsuResilience Solutions Fund (ISF) to strengthen developing countries’ resilience to climate risks.
According to the IDF, the Governor of Lagos State, Babajide Sanwo-Olu, said climate inaction could cost Lagos State just under USD 40 billion by 2050, with severe consequences for people, infrastructure, and the economy.
The Director-General for Multilateral Development Policy, Transformation, Climate at the German Federal Ministry for Economic Cooperation and Development (BMZ), Dr. Katharina Stasch, said the product highlights the impact that effective collaboration between governments, insurance, and development partners can deliver.
The parametric flood-risk product was designed by a team of IDF member insurance organisations in partnership with the Lagos State Government, including AXA Climate, AXA Mansard in Nigeria, Swiss Re, flood modeller JBA Risk Management, satellite company ICEYE, and African Risk Capacity Ltd.
Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau for Policy and Programme Support, said the milestone in Lagos shows that embedding insurance into public planning can strengthen support for vulnerable communities while advancing inclusive, climate-resilient development.
Lagos, a commercial hub and coastal city, battles flooding every rainy season, with residents losing valuables to the menace and sometimes their lives.
The plan was to create a Blue-Green Network linking estate lakes, canals, and green corridors to temporarily store and gradually release rainwater, preventing drainage systems from being overwhelmed during heavy rainfall.