The African Reinsurance Corporation (Africa Re), together with a consortium of insurers and development partners and the Lagos State Government, has officially launched the Lagos Flood Risk Insurance Policy, marking the introduction of Sub-Saharan Africa’s first parametric flood insurance solution
The landmark initiative was co-convened by the Lagos State Government’s Office of Sustainable Development Goals (OSDG), the United Nations Development Programme (UNDP), the German Federal Ministry for Economic Cooperation and Development, and the Insurance Development Forum (IDF). The launch ceremony held in Lagos represents a major advancement in climate risk financing and disaster resilience in Africa’s largest city.
The Lagos Flood Risk Insurance Policy introduces a parametric insurance structure designed to deliver rapid, pre-agreed payouts when flood conditions reach defined trigger thresholds. Unlike traditional indemnity-based insurance, which requires lengthy claims assessments after a disaster, the parametric model enables automatic financial disbursements, allowing affected households and businesses to begin recovery without delay.
The policy is designed to provide financial protection to an estimated four million vulnerable residents across Lagos State, where recurring seasonal flooding continues to disrupt livelihoods, damage infrastructure, and strain household incomes.
Africa Re played a pivotal role as the lead technical reinsurance partner in the design and implementation of the programme. The Corporation provided reinsurance capacity that enabled the structuring of a scalable and financially sustainable solution tailored to Lagos’s complex flood risk profile.
Working closely with technical partners under the Insurance Development Forum framework, Africa Re helped translate climate hazard data into a functional insurance mechanism capable of triggering rapid payouts at scale. This technical architecture formed a critical foundation for the successful launch of the policy.
Through this engagement, Africa Re reinforced its position as a leading African institution driving innovation in climate risk finance and strengthening insurance resilience across the continent.
Speaking at the launch, Isaac Magina, Manager, Agriculture Underwriting at Africa Re, stated:
“The successful launch of the Lagos Flood Risk Insurance Policy demonstrates the power of African-led solutions to African challenges. Africa Re is proud to have provided the technical underwriting expertise and reinsurance capacity that underpins this initiative. This is a practical example of how data, partnerships, and risk expertise can be combined to deliver meaningful protection to vulnerable populations. Flooding in Lagos remains a recurring and significant challenge. Each year, heavy rainfall and drainage limitations result in widespread disruption, including displacement of communities, damage to property, interruption of economic activity, and loss of livelihoods. For many households and small businesses, recovery from flood events is slow and financially burdensome, often occurring without structured insurance protection.
The Lagos Flood Risk Insurance Policy addresses this gap by introducing a predictable and rapid-response financial safety mechanism that supports faster recovery and economic stability. The launch positions Lagos as a pioneer in parametric climate insurance in Sub-Saharan Africa and provides a potential blueprint for other high-risk urban and regional environments across the continent.
Africa Re’s involvement reflects its long-standing mandate to promote insurance market development, expand underwriting capacity, and support economic resilience across Africa. The Corporation expects the Lagos model to generate significant interest from other governments and development partners seeking innovative solutions to climate-related risks, including flood, drought, and extreme weather events, and remains committed to supporting replication through technical expertise and reinsurance capacity.
The Lagos Flood Risk Insurance Policy demonstrates that African institutions, working in close partnership with multilateral development organizations, can design and deliver world-class parametric insurance solutions for their populations. It reflects Africa Re’s founding mandate to foster insurance and reinsurance development in Africa, strengthen underwriting capacity, and support economic growth across the region.
About Africa Reinsurance Corporation (Africa Re)
The African Reinsurance Corporation (Africa Re) is a leading pan-African reinsurance institution established in 1976 by 36 African states, following a recommendation of the African Development Bank (AfDB).
With an “A” rating from both A.M. Best and Standard & Poor’s, Africa Re plays a central role in strengthening insurance capacity, promoting regional retention, and supporting sustainable economic development across Africa.
For more information, visit https://www.africa-re.com/
