The Lagos State Government has launched a flood risk insurance policy aimed at providing rapid financial relief to vulnerable residents affected by flooding.
Development partners, insurers and multilateral institutions attended the launch, where agreements were signed with the state government.
Gov. Babajide Sanwo-Olu said the initiative represents a shift from delayed disaster response to a proactive system that enables immediate fund disbursement once flood thresholds are triggered.
Sanwo-Olu, represented by Mrs. Bimbola Salu-Hundeyin, Secretary to the State Government, said the parametric insurance model allows automatic payouts based on verified satellite data and flood modelling, eliminating lengthy claims processes.
He said the policy would enable the government to provide direct cash transfers and emergency support to affected communities promptly.
According to him, about four million vulnerable residents across seven local government areas will benefit in the initial phase.
The governor added that the policy provides up to 7.5 million dollars in coverage per flood event, creating a financial safety net for high-risk communities.
He explained that beneficiaries would not need to apply or pay premiums, as the scheme is structured as a state-backed community protection system.
Sanwo-Olu said the government would leverage residents’ registration and social databases to identify and reach persons quickly during emergencies.
He urged residents, particularly traders and artisans, to update their registration details to ensure seamless access to relief.
The governor disclosed that the InsuResilience Solutions Fund is co-funding 90 per cent of the first-year premium, while the state government provides the remaining 10 per cent.
He said the state would gradually increase its contribution to ensure sustainability.
Sanwo-Olu noted that the initiative positions Lagos among global leaders adopting innovative climate finance solutions to address extreme weather risks.
He warned that climate inaction could cost the state about 40 billion dollars by 2050.
Sanwo-Olu called on the Federal Government to consider scaling the model nationwide.
The Commissioner for Finance, Mr. Abayomi Oluyomi, said the policy enhances financial preparedness and shields public finances from climate shocks.
Oluyomi said the parametric model ensures immediate payouts based on flood magnitude, enabling faster relief and reconstruction without conventional loss assessments.
He said the pilot would cover up to 1.7 million households with access to 7.5 million dollars in rapid response support.
Also speaking, Ms. Elsie Attafuah, Resident Representative of the United Nations Development Programme (UNDP), described the policy as a “game changer” for disaster preparedness and climate resilience.
Attafuah, represented by Mr. Blessed Chirimota, Deputy Resident Representative (Operations), said flooding has caused significant economic losses in Lagos, affecting livelihoods and infrastructure.
She said the scheme would provide timely financial support to about four million residents for recovery and rebuilding.
Mr. Kunle Ahmed, Chief Executive Officer of AXA Mansard Insurance Plc, speaking for the underwriting consortium, said the model guarantees swift payouts once flood thresholds are met.
Ahmed said it eliminates delays associated with traditional insurance claims processes and commended the collaboration among government, partners and regulators.
Dr Oreoluwa Finnih, Special Adviser on Sustainable Development, said the initiative strengthens fiscal resilience and protects vulnerable communities through a data-driven disaster management approach.
Also, Ms. Ekhosuehi Iyamen, Secretary-General of the Insurance Development Forum, described the policy as a landmark in climate risk financing.
She said it enables rapid satellite-triggered payouts and provides a model for climate adaptation across Africa.
The policy is being implemented with support from the UNDP, the German Federal Ministry for Economic Cooperation and Development (BMZ), and the Insurance Development Forum.
The pilot phase will cover Ajeromi-Ifelodun, Shomolu, Alimosho, Amuwo-Odofin, Apapa, Kosofe and Ojo Local Government Areas.