BY NKECHI NAECHE-ESEZOBOR—Cornerstone Insurance Plc has reaffirmed its commitment to climate resilience and financial inclusion through its participation in the Lagos Flood Risk Transfer Scheme, an innovative flood insurance initiative projected to benefit approximately four million residents across Lagos State.
Flooding remains one of the most pressing environmental and economic challenges facing Lagos State, with vulnerable and low-income communities bearing the greatest impact during the annual rainy season. As a low-lying coastal city with an average elevation of about 1.5 metres above sea level, Lagos is increasingly exposed to flood risks driven by rising sea levels, land subsidence, rapid urbanisation, and drainage systems frequently clogged by waste.
Over the years, the state has witnessed worsening flood incidents, particularly between April and July, causing extensive damage to infrastructure, businesses, livelihoods, and economic activities. The annual economic losses resulting from flooding in Lagos are estimated at nearly $4 billion.
In response to these growing threats, the United Nations Development Programme (UNDP) and the Insurance Development Forum (IDF), with funding support from the German Federal Ministry for Economic Cooperation and Development (BMZ), developed the Lagos Flood Risk Transfer Scheme in collaboration with the Lagos State Government.
The initiative aims to provide rapid financial assistance to vulnerable residents through an innovative parametric insurance solution designed to enable quicker response and recovery after major flooding events.
Following comprehensive technical assessments and modelling exercises, a flood footprint-based index was selected as the most suitable insurance model for Lagos State, considering the city’s exposure to pluvial, fluvial, and coastal flooding. Under the scheme, insurance payouts are triggered once flood depths reach 50 centimetres.
After receiving regulatory approval from the National Insurance Commission (NAICOM), the scheme is now being underwritten by Cornerstone Insurance Plc alongside three other leading insurance companies, with Africa Re providing reinsurance support.
Speaking on the initiative, the Managing Director of Cornerstone Insurance Plc, Stephen Alangbo, said:
“At Cornerstone Insurance, we recognise that climate-related risks such as flooding continue to threaten livelihoods, businesses, and vulnerable communities across Lagos State. Our participation in the Lagos Flood Risk Transfer Scheme reflects our commitment to delivering innovative insurance solutions that strengthen resilience, support rapid recovery, and provide meaningful financial protection to those most affected by environmental challenges.”
The long-term sustainability of the initiative is further reinforced by the Lagos State Government’s commitment to phased premium payments over the next three years. The scheme has also been integrated into the state’s broader disaster management framework, strengthening coordinated efforts to improve preparedness, response, and recovery for flood-prone communities across Lagos State.
