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.

What they are saying

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.

“Our wetlands and biodiversity are also under threat. These realities demand urgent action. This pioneering parametric flood insurance policy strengthens our ability to protect lives, livelihoods, and public finances while embedding climate risk management into Lagos State’s long-term development planning,” the governor said in the statement.

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.

“As climate risks continue to rise, BMZ is proud to have supported the Tripartite Agreement Programme’s efforts to scale sovereign risk finance and to witness the new alliances and models for cooperation emerging through the programme,” Stasch said.

More insights

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.

• The work was co-funded by ISF and IDF insurance industry members and supported by UNDP Nigeria and UNDP’s Insurance and Risk Finance Facility.
• Partners in Nigeria include the Lagos State Government Office of Sustainable Development Goals (OSDG), the Lagos State Ministry of Finance, the Lagos State Ministry of Budget and Economic Planning, and the Lagos State Emergency Management Agency (LASEMA).

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.