LAGOS, NIGERIA — In response to the escalating threat of climate change, Lagos state has secured a $7.5 million flood insurance policy to safeguard millions of its residents. The policy, announced by the Insurance Development Forum, aims to mitigate the impact of rising sea levels and frequent flooding in Nigeria’s economic capital.
The coastal megacity of Lagos, with an estimated population exceeding 22 million, is particularly vulnerable to the adverse effects of climate change in coastal West Africa. Governor Babajide Olusola Sanwo-Olu has emphasized the urgency of addressing climate change, warning that inaction could result in a staggering $40 billion cost to the state government by 2050.
The flood insurance policy covers up to four million people across seven local government areas in Lagos state. It includes government disaster relief efforts and direct cash transfers to affected communities. The policy’s premium was largely financed by the InsuResilience Solutions Fund, with Lagos state covering the remaining 10 percent.
The insurance scheme is a form of parametric flood insurance, which triggers payouts based on specific conditions, such as a certain amount of rainfall as monitored by satellite imagery. This approach is expected to expedite the relief process compared to traditional insurance claims that depend on damage assessments.
The Insurance Development Forum, an affiliate of the United Nations Development Programme and the World Bank Group, has hailed the insurance as a significant milestone in a state where 80 percent of households are low-income and insurance penetration is currently less than 0.5 percent. The policy underscores the growing threat of climate change in Lagos, which is also addressing sinking land levels, degradation of waterways and wetlands, and the expansion of industry along its shores. Paragraph omitted for brevity.
Source: Africanews
