The Insurance Development Forum (IDF), in partnership with global and local stakeholders, has successfully designed a parametric flood insurance solution for the Lagos State Government under the Tripartite Agreement Programme. This initiative marks a significant step toward improving climate resilience and disaster preparedness in Nigeria’s most populous state.
The project was delivered through a collaboration between the IDF, the United Nations Development Programme (UNDP), and the German Federal Ministry for Economic Cooperation and Development (BMZ) via the InsuResilience Solutions Fund (ISF).
Developed by a coalition of IDF member organisations—including AXA Climate, Swiss Re, AXA Mansard, JBA Risk Management, ICEYE, and African Risk Capacity Ltd. (ARC Ltd.)—the insurance solution was tailored in close partnership with the Lagos State Government. Key state partners included the Ministry of Finance, Ministry of Budget and Economic Planning, and the Lagos State Emergency Management Agency (LASEMA), with ongoing support from the UNDP Nigeria team.
Flooding remains a persistent threat in Lagos, particularly for poor and vulnerable communities. Climate change is intensifying the frequency and severity of such events, increasing the need for timely and reliable financial response mechanisms.
The parametric insurance product is designed to provide swift financial relief once pre-agreed flood thresholds are triggered, using satellite-derived flood footprint data. It is projected to protect up to 4 million residents, with coverage of up to $7.5 million USD available in the event of a severe flood.
This innovative risk financing tool will enable Lagos State to quickly mobilize funds for emergency response activities, including disaster relief efforts and direct cash transfers to affected populations. It is also a core component of the state’s broader flood risk management and climate adaptation strategy.
Regulatory approval for the product has already been secured. Next steps include arranging premium financing options and fully integrating the insurance solution into Lagos State’s catastrophe contingency planning and fiscal frameworks.
Dr. Oreoluwa Finnih, Special Adviser to the Governor on Sustainable Development Goals, praised the development as a major milestone:
“The delivery of this parametric flood insurance solution is vital to strengthening Nigeria’s climate risk adaptation. It reflects the type of innovative public-private partnerships we need to build fiscal resilience and protect our communities from the impacts of climate change.”
Ivo Menzinger, Chair of the IDF Operating Committee and Managing Director at Swiss Re, emphasized the value of cross-sector collaboration:
“This milestone showcases how governments, insurers, and development partners can co-create scalable, data-driven solutions. We are committed to ensuring this product is embedded within local systems and driven by local ownership.”
Dr. Annette Detken, Head of the InsuResilience Solutions Fund (ISF), added:
“This project is a pivotal step in delivering timely and reliable climate risk protection. It exemplifies the core goals of the Tripartite Programme—empowering local systems, building technical capacity, and laying the groundwork for long-term resilience across Nigeria.”
The UNDP is also working closely with the Nigerian government to scale this initiative nationally, developing a National Disaster Risk Finance Strategy and contributing to Nigeria’s Nationally Determined Contribution (NDC) 3.0 goals.
