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

Risk transfer

When disaster risk is shifted to insurers or capital markets.

Disaster risk finance diagnostic

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

International crisis financing system

The network of global organisations funding crisis prevention, preparedness and response.

Cost multiple

The cost multiple measures the average amount a government pays to receive USD 1 of payout from a financing instrument over its lifetime.

Vulnerability

Conditions that increase how severely people or communities are affected by hazards.

Adaptive social protection

Social protection systems that adjust to shocks, helping vulnerable people prepare, cope and recover over time.