In a landmark move for climate resilience, the Lagos State Government has officially launched its Flood Risk Insurance Policy, marking the first initiative of its kind on the African continent.
The scheme is designed to provide rapid financial relief to the state’s most vulnerable populations in the wake of devastating flood events.
The policy represents a strategic pivot for Africa’s largest megacity, moving away from traditional, reactive disaster responses toward a proactive risk management framework. By leveraging global partnerships and innovative financing, the state aims to protect both its citizens and its economic future from the increasing threats of climate change.
A Bold Shift in Climate Governance
Speaking at the high-level launch held at the Radisson Blu Hotel, Governor Babajide Olusola Sanwo-Olu, represented by the Secretary to the State Government, Barr. Abimbola Salu-Hundeyin, described the project as a decisive change in governance.
“This initiative ensures that when floods occur, support reaches affected communities swiftly, transparently, and with dignity,” the Governor stated. “It is a bold shift that reaffirms our commitment to safeguarding lives, livelihoods, and critical infrastructure.”
The Governor further called on the Federal Government and other subnational leaders to adopt this model, citing it as a scalable blueprint for protecting vulnerable populations nationwide.
Coverage and Financial Impact
The insurance scheme is set 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. Under the terms of the policy, the state could see payouts of up to $7.5 million per flood event.
Notably, the program is fully funded by the State Government, meaning beneficiaries are not required to pay premiums. Identification for the scheme will be handled through existing social registers, including the Lagos State Residents Registration Agency (LASSRA), ensuring that help reaches those in genuine need without complex documentation.
Economic Resilience and Global Partnerships
The Commissioner for Finance, Mr. Abayomi Oluyomi, underscored the fiscal necessity of the policy. He warned that projections suggest climate inaction could cost Lagos up to $40 billion by 2050.
“This scheme is not just insurance; it is a resilience tool,” Oluyomi noted. He revealed that the German Government, through the InsuResilience Solutions Fund, is covering 90% of the insurance premium in the first year, with Lagos State contributing the remaining 10%. This collaboration traces back to diplomatic engagements at COP27 in Sharm El Sheikh.
Technological Integration and Infrastructure
To ensure objectivity and speed, the scheme utilizes satellite technology to trigger payouts, addressing various flood types including pluvial, fluvial, and coastal flooding. Dr. Oreoluwa Finnih, Special Adviser on Sustainable Development Goals, explained that the policy is designed to restore both household stability and critical infrastructure.
The Flood Risk Insurance Scheme will be integrated into the operational framework of the Lagos State Emergency Management Agency (LASEMA) to ensure coordinated and targeted assistance during crises.
A Coalition for Change
The launch saw a massive gathering of international and domestic stakeholders, including representatives from the United Nations Development Programme (UNDP), the World Bank, and the Insurance Development Forum (IDF).
Private sector partners, including AXA Mansard, Swiss Re, and African Risk Capacity Limited, were lauded for their role in creating a policy that positions Lagos as a global leader in subnational climate finance innovation.
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