Indemnity insurance
A (re)insurance contract which pays out compensation worth the ultimate net loss of a specific asset. This type of insurance can be useful in protecting high-value assets such as homes, where there is a relatively narrow scope of potential loss. Insurance payouts are determined based on an assessment of losses after an event has occurred (InsuResilience Global Partnership 2020).
This insight paper aims to support policymakers and practitioners as they seek to scale up financial protection against climate-related shocks through sovereign insurance solutions.
Read moreEarly warning system
Systems that monitor hazards and share information early, so people can act in time.
Fragility
High exposure to risk combined with weak capacity to cope, often leading to crisis.
Sustainable development
Meeting today’s needs without limiting future generations’ ability to meet theirs.
Disaster risk financing
Financial arrangements made in advance to pay for disaster prevention, response and recovery.
Risk transfer
When disaster risk is shifted to insurers or capital markets.
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.
