Glossary

Sovereign insurance

Sovereign insurance is insurance coverage purchased by a national government to protect its budget against the financial impacts of disasters. Under these arrangements, the government pays a premium and receives a payout when a predefined disaster trigger is met

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This working paper presents a framework that compares contingent loans, grants from multilateral development banks, catastrophe bonds, and insurance provided through regional risk pools.

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other key terms

Adaptive social protection

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

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.

Sustainable development

Meeting today’s needs without limiting future generations’ ability to meet theirs.

Accountability

Being responsible for decisions and resources, listening to affected people, and accepting consequences for actions taken.

Crisis

A situation where severe needs overwhelm local and national capacity to respond effectively.