Glossary
Parametric insurance
A type of insurance that does not indemnify the pure loss but agrees before the event to make a payment dependent on an index. Also known as index insurance. (Clarke and Dercon, 2016).
other key terms
Early warning system
Systems that monitor hazards and share information early, so people can act in time.
Risk retention
When governments retain and finance disaster costs themselves.
Resilience
The ability to withstand shocks, adapt, recover and continue functioning over time.
Covariate shocks
Shocks affecting many households at once where losses are shared across the same community.
Fragility
High exposure to risk combined with weak capacity to cope, often leading to crisis.
Disaster risk financing
Financial arrangements made in advance to pay for disaster prevention, response and recovery.
