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
Crisis protection gap
The difference between expected crisis costs and funding already arranged to cover them.
Contingent liabilities
Possible financial obligations that only become real if specific future events occur.
Attachment point
The loss level above which a reinsurer begins paying under a reinsurance agreement.
Risk layering
Using different financial instruments for different disaster frequencies.
Disaster
A severe event causing widespread harm that exceeds a community’s ability to cope alone.
Sustainable development
Meeting today’s needs without limiting future generations’ ability to meet theirs.
