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).
Contingent liabilities
Possible financial obligations that only become real if specific future events occur.
Hazard
A natural or human process that can cause injury, damage or disruption.
Contingent loan (or credit) and grants
A pre approved loan released automatically when agreed crisis conditions or triggers are met.
Adaptive social protection
Social protection systems that adjust to shocks, helping vulnerable people prepare, cope and recover over time.
Indemnity insurance
Insurance that pays based on assessed losses after damage to a specific asset.
Risk retention
When governments retain and finance disaster costs themselves.
