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).
Contingent loan (or credit) and grants
A pre approved loan released automatically when agreed crisis conditions or triggers are met.
Covariate shocks
Shocks affecting many households at once where losses are shared across the same community.
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.
Sustainable development
Meeting today’s needs without limiting future generations’ ability to meet theirs.
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.
