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

Risk retention

When governments retain and finance disaster costs themselves.

Crisis financing

Funding designed to prevent, prepare for and respond to crises before and after they occur.

Hazard

A natural or human process that can cause injury, damage or disruption.

Sovereign insurance

Sovereign insurance is insurance coverage purchased by a national government to protect its budget against the financial impacts of disasters.

Indemnity insurance

Insurance that pays based on assessed losses after damage to a specific asset.

Early warning system

Systems that monitor hazards and share information early, so people can act in time.