Glossary
Covariate shocks
Covariate shocks are those which affect many people in the same community at once; the experience of one household is highly covariate with that of other households in the community (Jalan and Ravallion 1999).
other key terms
Risk profile
Underlying risks that an organisation or country is exposed to and the extent to which they are mitigated by pre-arranged finance.
Risk layering
Using different financial instruments for different disaster frequencies.
Attachment point
The loss level above which a reinsurer begins paying under a reinsurance agreement.
Risk retention
When governments retain and finance disaster costs themselves.
Shock-responsive social protection
Social protection systems adapted to scale quickly when large shocks affect many people.
International crisis financing system
The network of global organisations funding crisis prevention, preparedness and response.
