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
Covariate shocks
Shocks affecting many households at once where losses are shared across the same community.
Pre-arranged financing
Financing approved before crises that is released automatically when agreed triggers are met.
Shock-responsive social protection
Social protection systems adapted to scale quickly when large shocks affect many people.
Disaster
A severe event causing widespread harm that exceeds a community’s ability to cope alone.
Index
A measurable indicator used to estimate losses and trigger financial payouts.
Other official flows (OOF)
Public funding supporting development that does not meet official aid definitions.
