The Lagos State Government has launched a parametric flood insurance policy designed to provide rapid financial relief to vulnerable residents affected by flooding.
Governor Babajide Sanwo-Olu said the initiative marks a shift from delayed disaster response to a proactive system that enables immediate payouts once predefined flood thresholds are triggered.
Represented by the Secretary to the State Government, Bimbola Salu-Hundeyin, the governor said the model relies on satellite data and flood modelling to activate payments automatically, eliminating the need for conventional claims processes.
He said the policy would allow the state to deliver direct cash transfers and emergency support promptly to affected communities, with about four million residents across seven local government areas expected to benefit in the initial phase.
The scheme provides up to $7.5 million in coverage per flood event and is structured as a state-backed protection system, meaning beneficiaries are not required to pay premiums.
Sanwo-Olu added that the government would use existing social registers and resident databases to identify beneficiaries quickly, urging residents to update their records to ensure access to relief.
He disclosed that the InsuResilience Solutions Fund is co-funding 90 per cent of the first-year premium, with the state covering the balance and expected to scale up contributions over time.
The governor said the initiative positions Lagos among jurisdictions adopting innovative climate finance tools to address rising flood risks, warning that climate inaction could cost the state up to $40 billion by 2050.
Commissioner for Finance, Abayomi Oluyomi, said the policy strengthens fiscal resilience by shielding public finances from climate-related shocks and enabling faster recovery without lengthy loss assessments.
Also speaking, the Resident Representative of the United Nations Development Programme, Elsie Attafuah, described the initiative as a “game changer” for disaster preparedness and climate resilience, noting that flooding continues to cause significant economic losses in Lagos.
Chief Executive Officer of AXA Mansard Insurance Plc, Kunle Ahmed, said the parametric model guarantees swift payouts once flood thresholds are met, removing delays associated with traditional insurance systems.
Secretary-General of the Insurance Development Forum, Ekhosuehi Iyamen, described the policy as a landmark in climate risk financing, adding that it offers a scalable model for climate adaptation across Africa.
The initiative is being implemented with support from the UNDP, the German Federal Ministry for Economic Cooperation and Development, and the Insurance Development Forum.
The pilot phase will cover Ajeromi-Ifelodun, Shomolu, Alimosho, Amuwo-Odofin, Apapa, Kosofe and Ojo local government areas.
