Lagos state has bought a $7.5 million flood insurance policy to protect millions of people from rising seas and climate-driven floods, the Insurance Development Forum announced Thursday.

The coastal mega-city is home to over 22 million people and faces serious threats from climate change: rising oceans, unpredictable rainfall, and rapid urban growth.

Governor Babajide Olusola Sanwo-Olu warned that ignoring climate change could cost the state $40 billion by 2050. “Our wetlands and biodiversity are also under threat. These realities demand urgent action,” he said.

How It Works

Germany financed 90 percent of the insurance premium through the InsuResilience Solutions Fund, with Lagos covering the rest. The policy protects up to four million people across seven local government areas and provides government disaster relief and direct cash transfers to affected communities.

The policy uses “parametric flood insurance”, it pays out automatically when specific conditions are met, like a certain amount of rainfall detected by satellite, instead of waiting for damage assessments.

Why It Matters

Lagos is Africa’s largest city and is sinking while facing floods from both climate change and poor waterway management. About 80 percent of households are low-income, and less than 0.5 percent have insurance access, making this a major milestone for the region.

Source: Africanews, AFP