Basis risk
Basis risk is the difference between an index and the shock that the index is supposed to be a proxy for. A payout triggered by an index may be higher or lower than the beneficiary's losses, leading to overpayment or shortfall respectively. Where there are differences of opinion amongst stakeholders over what the index is supposed to be a proxy for, the precise definition of basis risk can be contested. For example, disagreement may arise over whether an agricultural insurance product that uses a rainfall-based index covers drought-induced crop disease and pest damage (Centre for Disaster Protection).
The clearest picture yet of what countries actually want from pre-arranged finance and what institutional frictions slow delivery.
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Pre-arranged financing is expanding fast, but the voices of the countries it is meant to protect are too rarely heard. This report gives the clearest picture yet of what countries actually want.
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The first cross-country evidence on what governments actually want from pre-arranged financing, drawing on evidence from nearly 250 government officials and national stakeholders.
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This technical brief, authored by CERDI and supported by the Centre for Disaster Protection, provides an in-depth analysis of flood risk in Chad.
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This insight paper examines the challenge of handling basis risk in disaster risk financing systems.
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This report lays out a vision for new systems of financing to respond to the changing nature of global refugee crises.
Read moreHazard
A natural or human process that can cause injury, damage or disruption.
Indemnity insurance
Insurance that pays based on assessed losses after damage to a specific asset.
Early warning system
Systems that monitor hazards and share information early, so people can act in time.
Development insurer
An insurer supporting development goals through insurance products and technical assistance.
Crisis risk
The likelihood of harm or loss from crises shaped by hazards, exposure, vulnerability and capacity.
Sustainable development
Meeting today’s needs without limiting future generations’ ability to meet theirs.
