Lagos State has unveiled Africa’s first Flood Risk Insurance Policy, marking a major step toward climate resilience and social protection, with the scheme designed to provide rapid financial support to vulnerable residents affected by flooding.
Governor Babajide Sanwo-Olu described the initiative as a shift from reactive disaster response to proactive risk management at the official launch held at Radisson Blu Hotel, Victoria Island.
“This initiative represents a decisive change in how we address climate risks. It ensures that when floods occur, support reaches affected communities swiftly, transparently, and with dignity,” the governor said.
Represented by the Secretary to the State Government, Abimbola Salu-Hundeyin, Sanwo-Olu said the scheme is expected to cover more than four million vulnerable residents across seven high-risk local government areas-Ajeromi-Ifelodun, Alimosho, Amuwo-Odofin, Apapa, Kosofe, Ojo and Somolu — with potential payouts of up to $7.5 million per flood event.
He added that beneficiaries would not be required to pay premiums or complete complex documentation, as the programme is fully funded by the state government and leverages existing social registers, including the Lagos State Residents Registration Agency (LASSRA), for identification and support.
The governor urged the Federal Government and other states to adopt similar models, describing the initiative as a scalable framework for protecting vulnerable populations nationwide.
The Commissioner for Finance, in his remarks, said the policy serves as a fiscal protection mechanism that enables faster response, wider coverage and quicker recovery from flood disasters.
He warned that Lagos, as a coastal megacity, faces increasing exposure to climate risks such as sea-level rise and extreme rainfall, noting projections that climate inaction could cost the state up to $40 billion by 2050.
“This scheme is not just insurance; it is a resilience tool and a signal of Lagos’ commitment to long-term planning in the face of climate change,” he said.
He also highlighted the role of international collaboration, noting that the German Government, through the InsuResilience Solutions Fund, is covering 90 per cent of the insurance premium in the first year, while Lagos State will fund the remaining 10 per cent.
The partnership, he said, emerged from engagements at COP27 in Sharm El Sheikh and demonstrates the value of global cooperation in addressing climate challenges.
Also speaking, the Special Adviser on Sustainable Development Goals, Oreoluwa Finnih, described the initiative as a milestone in fiscal sustainability and inclusive governance.
“Climate risk is not only an environmental concern; it is a fiscal reality,” she said, adding that the scheme embeds resilience into governance systems and ensures preparedness before disasters occur.
Finnih explained that the insurance model is supported by satellite technology to guarantee transparency and objectivity, and is designed to address multiple flood types — pluvial, fluvial and coastal flooding — while supporting both household relief and infrastructure recovery.
She added that the scheme would be integrated into the operational framework of the Lagos State Emergency Management Agency (LASEMA) to ensure efficient coordination and targeted response.
Development partners, including the United Nations Development Programme, the European Union, the World Bank, the African Development Bank and the Insurance Development Forum, commended the initiative, describing it as a groundbreaking model for climate risk financing in Africa.
The project also involves private sector players such as AXA Climate, Swiss Re, AXA Mansard, Africa Risk Capacity Limited, JBA Risk Management and ICEYE.
Stakeholders at the event said the scheme positions Lagos as a leader in subnational climate finance innovation, setting a precedent for integrating disaster risk financing into governance systems.
With increasing climate threats and urban vulnerability, officials say the Flood Risk Insurance Policy underscores Lagos State’s commitment to building a resilient, inclusive and future-ready megacity.
