On Friday, March 27, the State of Lagos officially activated a parametric insurance policy against flood risks. Behind this innovation, largely supported by Germany, which finances most of the premium through its cooperation instruments, lies an effective model that is still far from agricultural realities, where coverage needs remain massive and largely unmet.

With a maximum coverage of $7.5 million, the contract protects up to four million people residing in seven local communities exposed to flooding. The principle breaks with traditional insurance: compensation is triggered automatically when the water level, measured by satellite, exceeds 50 centimeters, without a claim declaration.

KfW's climate insurance portfolio totals eleven projects for 250 million euros in investments. The InsuResilience Investment Fund II reached its target size of $100 million in February 2025, funding seven climate insurance companies in emerging markets.

The product was designed as part of the Tripartite Agreement Programme, a public-private partnership involving UNDP, the Insurance Development Forum (IDF), a global coalition of insurers committed to climate resilience, and the German government via the InsuResilience Solutions Fund (ISF), a fund managed by KfW, a development bank based in Frankfurt, on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ).