The Lagos state government, on Thursday, March 26, secured a $7.5 million flood insurance policy expected to provide relief for vulnerable residents in the event of a disaster.
The policy covers up to four million people in the coastal megacity, according to a statement by the Insurance Development Forum (IDF), 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 (TAP).
The programme is a partnership between the 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.
The Director-General (DG) for multilateral development policy, transformation, and climate at BMZ, Katharina Stasch, said the product highlights the impact that effective collaboration between governments, insurers, and development partners can deliver.
“As climate risks continue to rise, BMZ is proud to have supported TAP’s efforts to scale sovereign risk finance and to witness new alliances and models for cooperation emerging through the programme,” Stasch said.
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 (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 (IRFF).
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.
“As climate risks intensify, Lagos State is offering a scalable and sustainable model for safeguarding livelihoods and public finances,” Neto added.
In 2025 the Lagos state government unveiled plans to integrate estate lakes, canals, and pumps into a comprehensive flood management system over 24 months, aiming to reduce flooding across the city.
Tokunbo Wahab, Lagos state commissioner for environment and water resources, shared the details via his official X account, emphasising that the initiative targets areas most vulnerable to tide-locked flooding.
The plan is 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.
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