IDF completes design of parametric flood cover for Lagos State

By Henry Gale

July 17 - (The Insurer) - A parametric flood insurance cover for Nigeria's Lagos State has now been designed and regulatory approvals secured, the Insurance Development Forum (IDF) said on Thursday.

The next step would be for the state government to secure premium financing arrangements to purchase the insurance, the IDF said. Meanwhile, the U.N. Development Programme is also working with the government of Nigeria to scale the flood insurance project into a national scheme.

The insurance product for Lagos is intended to protect up to 4 million people. It would trigger payouts of up to $7.5 million based on satellite-observed flood footprint data. The funds would be used for disaster relief and direct cash transfers to affected communities.

It was designed by IDF members including Axa Climate, Swiss Re, Axa Mansard in Nigeria, flood modeller JBA Risk Management, satellite firm ICEYE and regional risk pool African Risk Capacity. The project was co-funded by the IDF and Germany's development ministry through the InsuResilience Solutions Fund.

Ivo Menzinger, chair of the IDF operating committee and managing director and executive adviser at Swiss Re, said: "The design phase harnessed the industry’s technical expertise in flood risk modelling and parametric insurance to develop a tailored, scalable solution for Lagos. We are committed to supporting local ownership as this solution moves towards regulatory approval and integration into government systems."

Oreoluwa Finnih, special adviser to the governor of Lagos State on sustainable development goals, said: "We look forward to seeing this product implemented and protection in place for Lagos State."