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.
Read moreSustainable development
Meeting today’s needs without limiting future generations’ ability to meet theirs.
Disaster risk finance diagnostic
An analytical assessment of a country’s disaster risk profile.
Crisis protection gap
The difference between expected crisis costs and funding already arranged to cover them.
Risk profile
Underlying risks that an organisation or country is exposed to and the extent to which they are mitigated by pre-arranged finance.
Prevention
Actions taken to avoid or reduce the impacts of future crises and hazards.
Disaster risk financing
Financial arrangements made in advance to pay for disaster prevention, response and recovery.
