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 moreSovereign insurance
Sovereign insurance is insurance coverage purchased by a national government to protect its budget against the financial impacts of disasters.
Development insurer
An insurer supporting development goals through insurance products and technical assistance.
Disaster risk management
Policies and actions to reduce disaster risks, manage impacts and strengthen resilience.
Disaster
A severe event causing widespread harm that exceeds a community’s ability to cope alone.
Risk profile
Underlying risks that an organisation or country is exposed to and the extent to which they are mitigated by pre-arranged finance.
Climate resilient debt clause or 'debt pause clause'
A provision in sovereign debt contracts that enables the borrower to temporarily stop repaying debt service for a pre-agreed period when a predefined event occurs.
