Index
In risk finance, an index is an indicator or measure that is chosen to be a good proxy for a type of shock, and used to determine payouts. For example, tropical cyclone categories used as an index for property damage or area average yield as a measure of lost agricultural production. Modelled estimates of damage costs are also used as indices (Centre for Disaster Protection).
Trigger
A predefined threshold that activates payments or actions within risk financing mechanisms.
Anticipatory Action
Actions taken before a crisis hits to prevent or reduce potential disaster impacts prior to a shock or before acute impacts are felt.
Disaster
A severe event causing widespread harm that exceeds a community’s ability to cope alone.
International development financing
Public funding flows supporting development objectives in lower income countries.
Social protection
Policies and programmes designed to reduce and prevent poverty and vulnerability throughout the life cycle.
Fragility
High exposure to risk combined with weak capacity to cope, often leading to crisis.
