Catastrophe bond
A catastrophe bond (cat bond) is a risk-transfer financial instrument that allows governments or insurers to transfer disaster risk to capital market investors. If a specified disaster event occurs, the bond’s principal is used to provide funds for recovery; if no event occurs, investors receive interest payments and their principal back.
This working paper presents a framework that compares contingent loans, grants from multilateral development banks, catastrophe bonds, and insurance provided through regional risk pools.
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The loss level above which a reinsurer begins paying under a reinsurance agreement.
International premium support
Premium support is international funding to pay for insurance premiums.
International development financing
Public funding flows supporting development objectives in lower income countries.
Contingent liabilities
Possible financial obligations that only become real if specific future events occur.
Crisis risk
The likelihood of harm or loss from crises shaped by hazards, exposure, vulnerability and capacity.
Shock-responsive social protection
Social protection systems adapted to scale quickly when large shocks affect many people.
