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 moreContingent liabilities
Possible financial obligations that only become real if specific future events occur.
Prevention
Actions taken to avoid or reduce the impacts of future crises and hazards.
International crisis financing system
The network of global organisations funding crisis prevention, preparedness and response.
Disaster
A severe event causing widespread harm that exceeds a community’s ability to cope alone.
Adaptive social protection
Social protection systems that adjust to shocks, helping vulnerable people prepare, cope and recover over time.
Preparedness
Skills, systems and resources developed to respond effectively to likely future crises.
