Development bank
Financial institution that offers financing (typically in the form of loans and grants) and complementary technical assistance, tied to explicit development objectives (Centre for Disaster Protection).
Risk layering
Using different financial instruments for different disaster frequencies.
Basis risk
The gap between measured indicators and real losses causing payouts to differ from actual damage.
Pre-arranged financing
Financing approved before crises that is released automatically when agreed triggers are met.
Sovereign insurance
Sovereign insurance is insurance coverage purchased by a national government to protect its budget against the financial impacts of disasters.
Crisis
A situation where severe needs overwhelm local and national capacity to respond effectively.
Shock-responsive social protection
Social protection systems adapted to scale quickly when large shocks affect many people.
