Glossary

Risk retention

When governments retain and finance disaster costs themselves.

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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

Crisis protection gap

The difference between expected crisis costs and funding already arranged to cover them.

Preparedness

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

Adaptive social protection

Social protection systems that adjust to shocks, helping vulnerable people prepare, cope and recover over time.

Risk layering

Using different financial instruments for different disaster frequencies.

Catastrophe bond

A catastrophe bond (cat bond) is a risk-transfer financial instrument that allows governments or insurers to transfer disaster risk to capital market investors.

International development financing

Public funding flows supporting development objectives in lower income countries.