Glossary

Risk transfer

When disaster risk is shifted to insurers or capital markets.

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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 management

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

Cost multiple

The cost multiple measures the average amount a government pays to receive USD 1 of payout from a financing instrument over its lifetime.

International development financing

Public funding flows supporting development objectives in lower income countries.

Risk retention

When governments retain and finance disaster costs themselves.

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.

Risk profile

Underlying risks that an organisation or country is exposed to and the extent to which they are mitigated by pre-arranged finance.