Glossary

Risk layering

Using different financial instruments for different disaster frequencies.

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This report offers an in-depth assessment of pre-arranged financing tools using seven key criteria for ensuring pre-arranged financing reduces the human and financial costs of disasters

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other key terms

Disaster risk finance diagnostic

An analytical assessment of a country’s disaster risk profile.

Parametric insurance

Insurance that pays when an agreed indicator reaches a set level, not actual losses.

Disaster risk management

Policies and actions to reduce disaster risks, manage impacts and strengthen resilience.

Preparedness

Skills, systems and resources developed to respond effectively to likely future crises.

Risk retention

When governments retain and finance disaster costs themselves.

Social protection

Policies and programmes designed to reduce and prevent poverty and vulnerability throughout the life cycle.