IDF unveils parametric flood insurance to protect 4 million in Lagos
The Insurance Development Forum (IDF) has announced the successful completion of the design of a parametric flood insurance solution for the Lagos State Government in Nigeria.
The solution was developed as part of the Tripartite Agreement Programme of the IDF, the United Nations Development Programme (UNDP), and the German Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF).
Flooding in Lagos State disproportionately affects poor and vulnerable populations, and climate change is increasing the frequency and severity of such events. The innovative parametric insurance product is projected to protect up to 4 million people by enabling swift financial support when pre-agreed flood triggers are met, based on satellite flood footprint data. In the event of a catastrophic flood, the product could provide access to up to $7.5 million in coverage.
Use of the product will enable Lagos State Government to quickly access funds to support emergency response efforts. This includes disaster relief and direct cash transfers to affected communities. The product forms a key part of Lagos State’s wider flood risk management and climate resilience strategy. UNDP is supporting the Government of Nigeria to scale the flood insurance project to a national scheme, developing a National Disaster Risk Finance Strategy and contributing to the integration or risk finance into Nigeria’s Nationally Determined Contribution (NDC) 3.0.
The design of this sub-sovereign risk transfer solution was undertaken by a team of IDF member organizations in partnership with the Lagos State Government, including AXA Climate, Swiss Re, AXA Mansard in Nigeria, flood modeler JBA Risk Management, satellite company ICEYE, and African Risk Capacity, supported by the UNDP team in Nigeria. It was co-funded by the IDF and the German Federal Ministry for Economic Cooperation and Development (BMZ) through the InsuResilience Solutions Fund (ISF). The partners in Nigeria included the Lagos State Government, the Lagos State Ministry of Finance, Lagos State Ministry of Budget and Economic Planning, and the Lagos State Emergency Management Agency (LASEMA).
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