The Insurance Development Forum (IDF), in collaboration with the United Nations Development Programme (UNDP) and the German Federal Ministry for Economic Cooperation and Development (BMZ), has successfully completed the design of a parametric flood insurance product for the Lagos State Government under the Tripartite Agreement Programme.
The innovative insurance solution, aimed at enhancing disaster risk management, was developed through the InsuResilience Solutions Fund (ISF). A coalition of IDF member organisations, working closely with Lagos State officials, designed the policy. Key partners in the initiative include AXA Climate, Swiss Re, AXA Mansard (Nigeria), flood modeling firm JBA Risk Management, satellite data provider ICEYE, and African Risk Capacity Ltd. (ARC Ltd.), with support from the UNDP Nigeria team.
According to the IDF, the solution addresses the increasing threat of flooding in Lagos State—an issue exacerbated by climate change and one that disproportionately impacts vulnerable and low-income populations.
Up to $7.5 Million in Swift Disaster Relief
The parametric flood insurance product is designed to offer rapid financial response in the event of severe flooding, using satellite-based flood footprint data to trigger payouts automatically when pre-agreed thresholds are met. The insurance cover could protect as many as 4 million Lagos residents, providing access to up to $7.5 million for emergency response and relief operations, including direct cash transfers to affected communities.
With regulatory approval already secured, the next phase will see Lagos State arranging premium financing to activate the product.
A Milestone in Climate Risk Management
Dr. Oreoluwa Finnih, Special Adviser to the Lagos State Governor on Sustainable Development Goals, described the initiative as a major step in strengthening climate adaptation and resilience in Nigeria.
“The delivery of this parametric flood insurance solution is a vital milestone. It exemplifies the kind of innovative public-private partnerships we need to build fiscal resilience and help communities prepare for climate impacts,” she said.
Backed by Global Expertise
Ivo Menzinger, Chair of the IDF Operating Committee and Executive Advisor at Swiss Re, emphasized the importance of collaboration across sectors.
“This achievement showcases the power of partnership between governments, insurers, and development institutions. The design process tapped into advanced flood risk modeling and parametric insurance capabilities to create a scalable, tailored solution for Lagos State.”
Dr. Annette Detken, Head of the InsuResilience Solutions Fund, noted that the initiative is closely aligned with the fund’s mission to strengthen resilience through innovative and locally owned risk financing solutions.
“This is exactly the kind of solution the Tripartite Programme aims to support—one that provides reliable financial protection for vulnerable populations and lays the groundwork for long-term resilience in Nigeria,” she said.
Looking Ahead
The Lagos flood insurance scheme is one of the first of its kind in West Africa at the sub-sovereign level and serves as a model for future risk transfer solutions across the continent. With premium financing arrangements underway, stakeholders are optimistic about the product’s implementation and its potential to protect lives, livelihoods, and infrastructure from climate-related disasters.
The Tripartite Agreement Programme is a joint initiative between the IDF, UNDP, and BMZ through the ISF, focused on supporting developing countries in strengthening disaster risk management through insurance-based solutions.
