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.
Adaptive social protection
Social protection systems that adjust to shocks, helping vulnerable people prepare, cope and recover over time.
Development bank
A public financial institution providing loans, grants and expertise to support development goals.
International premium support
Premium support is international funding to pay for insurance premiums.
Climate resilient debt clause or 'debt pause clause'
A provision in sovereign debt contracts that enables the borrower to temporarily stop repaying debt service for a pre-agreed period when a predefined event occurs.
Pre-arranged financing
Financing approved before crises that is released automatically when agreed triggers are met.
