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

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.

Prevention

Actions taken to avoid or reduce the impacts of future crises and hazards.

Crisis risk

The likelihood of harm or loss from crises shaped by hazards, exposure, vulnerability and capacity.

Shock-responsive social protection

Social protection systems adapted to scale quickly when large shocks affect many people.

Pre-arranged financing

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