Lagos targets four million residents with $7.5m flood insurance scheme

The Lagos State Government has unveiled a flood-risk insurance scheme designed to support more than four million vulnerable residents across seven high-risk local government areas, with potential payouts of up to $7.5m per flood event to cushion the impact of disasters.

Governor Babajide Sanwo-Olu, represented by the Secretary to the State Government, Abimbola Salu-Hundeyin, disclosed the details at the launch of the Flood Risk Insurance Policy held in Victoria Island on Wednesday.

According to a statement issued on Thursday by the Director of Public Affairs at the Ministry of Finance, Adeleke Quadri, the governor described the initiative as a shift from reactive disaster response to proactive risk management, reaffirming the state’s commitment to protecting lives, livelihoods, and critical infrastructure.

“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,” Sanwo-Olu said.

The statement noted that the scheme will cover high-risk local government areas, including Ajeromi-Ifelodun, Alimosho, Amuwo-Odofin, Apapa, Kosofe, and Ojo, with “potential payouts of up to $7.5m per flood event.”

It added that beneficiaries will not be required to pay premiums or complete complex documentation because the programme is fully funded by the state government and leverages existing social registers, including data from the Lagos State Residents Registration Agency, for identification and support.

Sanwo-Olu also urged the Federal Government and other subnational entities to adopt similar models, describing the initiative as “a scalable blueprint for protecting vulnerable populations nationwide.”

The Commissioner for Finance, Abayomi Oluyomi, highlighted the scheme’s importance as a fiscal protection tool, noting that it would enable faster response, broader coverage, and more efficient recovery from flood events.

He warned that Lagos, as a coastal megacity, faces increasing exposure to climate-induced risks such as sea-level rise and extreme rainfall, with projections indicating that inaction could cost the state up to $40bn by 2050.

“This scheme is not just insurance; it is a resilience tool and a clear signal that Lagos is committed to long-term, forward-looking planning in the face of climate change,” Oluyomi said.

He also acknowledged the partnership behind the initiative, particularly the support of the German Government through the InsuResilience Solutions Fund, which will cover 90 per cent of the insurance premium in the first year, while Lagos State will fund the remaining 10 per cent.

He described the collaboration—originating from engagements at COP27 in Sharm El Sheikh—as evidence of the role of global partnerships in tackling shared climate challenges.

Also speaking, the Special Adviser to the Governor on Sustainable Development Goals, Dr Oreoluwa Finnih, described the scheme as a milestone in Lagos State’s journey towards fiscal sustainability and inclusive governance.

“Climate risk is not only an environmental concern; it is a fiscal reality. This initiative embeds resilience into governance systems, ensuring that we are financially prepared before disasters occur,” she said.

Finnih explained that the scheme uses satellite technology to ensure transparency and objectivity and is designed to address multiple flood types—pluvial, fluvial, and coastal—while supporting both household-level relief and the restoration of critical infrastructure.

She added that the programme would be integrated into the operational framework of the Lagos State Emergency Management Agency to ensure efficient coordination and targeted assistance.

The Resident Representative of the United Nations Development Programme in Nigeria, Ms Elsie Attafuah, represented by Deputy Resident Representative, Blessed Chidimuta, also delivered remarks.

In her goodwill message, the Secretary General of the Insurance Development Forum, Ekhosuehi Iyahen, described the initiative as groundbreaking.

The statement added that the insurance scheme was developed through collaboration between the Lagos State Government and several development and private sector partners, including the United Nations Development Programme, the European Union, the German Government, the World Bank, the African Development Bank, the Insurance Development Forum, AXA Climate, Swiss Re, AXA Mansard, Africa Risk Capacity Limited, JBA Risk Management, and ICEYE.