Glossary

Risk profile

Underlying risks that an organisation or country is exposed to, the amount of financial protection needed and that is expected to be covered by pre-arranged financing instrument(s), and where there are funding gaps.

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This guidance note has been developed to help the increasing number of countries and organisations that are considering or using pre-arranged financing instruments.

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other key terms

Pre-arranged financing

Financing approved before crises that is released automatically when agreed triggers are met.

Total crisis financing

Development funding focused mainly on crisis prevention, preparedness and response activities.

Contingent liabilities

Possible financial obligations that only become real if specific future events occur.

Risk retention

When governments retain and finance disaster costs themselves.

Preparedness

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

Parametric insurance

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