Glossary

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).

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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.

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other key terms

Disaster risk finance diagnostic

An analytical assessment of a country’s disaster risk profile.

Sustainable development

Meeting today’s needs without limiting future generations’ ability to meet theirs.

Fragility

High exposure to risk combined with weak capacity to cope, often leading to crisis.

Contingent liabilities

Possible financial obligations that only become real if specific future events occur.

Risk profile

Underlying risks that an organisation or country is exposed to and the extent to which they are mitigated by pre-arranged finance.

International premium support

Premium support is international funding to pay for insurance premiums.