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).
Parametric insurance
Insurance that pays when an agreed indicator reaches a set level, not actual losses.
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.
Early warning system
Systems that monitor hazards and share information early, so people can act in time.
Adaptive social protection
Social protection systems that adjust to shocks, helping vulnerable people prepare, cope and recover over time.
Risk transfer
When disaster risk is shifted to insurers or capital markets.
Social protection
Policies and programmes designed to reduce and prevent poverty and vulnerability throughout the life cycle.
