May 19, 2023
The Lagos State Government, with the support of the United Nations Development Programme (UNDP) and the Insurance Development Forum (IDF), has launched a Flood Risk Insurance project to cover citizens against urban floods in Lagos State.
The intervention which is funded by the German Government and InsuResilience Solutions Fund (ISF) is an innovative pilot project seeking to provide a flood risk transfer solution for urban floods in Lagos.
The Lagos State Governor, Mr. Babajide Sanwo-Olu, in his address at the launch of the project, described the intervention as a critical milestone towards enhancing the strategic purpose of the state development plan.
The Governor, who was represented by the Commissioner of Economic Planning, Mr. Sam Egube, explained that flooding is a major risk for many states across Nigeria, inflicting substantial socio-economic consequences for the poor and vulnerable urban population and stretching the response capacity of local authorities for flood victims.
“These floods exacerbate socio-economic shocks for 63% of the Nigerian population (133 million people) living in multidimensional poverty, of which 4 million reside in Lagos State. Insurance, which transfers a portion of risk to the private sector, is one instrument that could help spread the cost of flood risk and improve the resilience of the impacted populations. Yet, insurance penetration is low at just 0.4% – one of the lowest in Africa”, he said.
Sanwo-Olu, who admitted that the coastal city of Lagos is particularly affected by annual floods, revealed that the Flood Risk Insurance project will cover poor and vulnerable populations against the risk of pluvial, fluvial and coastal flooding using a flood parametric insurance product.
In his submission, the Minister of Finance, Budget and National Planning, represented by Dr. Usman Jankara, noted that the threats of climate change and its catastrophic damages are Africa’s realities.
The recurring floods in Lagos State and many parts of Nigeria are evidence that climate change and the resultant flood have become a cause for serious concern, as the devastating impacts on the vulnerable segment of the Nigerian populace reinforce the fact that flood risk can no longer be ignored.
The Minister confirmed that the insurance cover will support Lagos State Government to provide rapid pay-outs of disaster relief funds to the affected residents of Lagos State and contribute to the fast reconstruction of critical infrastructure.
In her remark, the Special Adviser to the Governor on Sustainable Development Goals and Investment, Mrs. Solape Hammond acknowledged the critical importance of the initiative towards improving the existing resilient mechanisms and structure of the state government.
While applauding the support of development partners and other stakeholders towards the implementation of the project, the Special Adviser affirmed that the intervention would support the scaling up of some targets of SDGs.
The UNDP Nigeria Resident Representative, Ms. Precious Akanonu (UNDP National Economist) stated that the flood risk insurance cover for Lagos State will in the long-term contribute towards improving financial resilience against disasters such as floods, adding that it will also contribute towards closing the disaster and risk protection gap and ensure that progress towards achieving the Sustainable Development Goals (SDGs) is made.
The UNDP’s Insurance and Risk Finance Facility (IRFF) Regional Technical Lead for Africa, Ms. Linet Odera submitted that the level of leadership displayed by the Lagos State Government and the active participation of stakeholders at the launch will strengthen the commitment of UNDP to steering the partnership towards successful implementation and spreading the achievement the other States in Nigeria.
The Insurance Development Forum (IDF) Consortium represented by AXA Climate Head of Public Sector, Karina Whalley and Bode Olajumoke, noted that Lagos State is at the very forefront of innovation with the critical purpose of protecting its most vulnerable against disaster.
“We are convinced that initiatives like this will help increase resilience and coping mechanisms when disasters strike and create a clear opportunity for people to experience the positive impact of insurance in their lives”, she added.
