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
This working paper presents a framework that compares contingent loans, grants from multilateral development banks, catastrophe bonds, and insurance provided through regional risk pools.
Read moreFinancial Flows
Financial flows refer to the movement of funds for disaster risk reduction (DRR) and response, covering planned and unplanned sources.
Trigger
A predefined threshold that activates payments or actions within risk financing mechanisms.
Disaster
A severe event causing widespread harm that exceeds a community’s ability to cope alone.
Crisis
A situation where severe needs overwhelm local and national capacity to respond effectively.
Early warning system
Systems that monitor hazards and share information early, so people can act in time.
Development bank
A public financial institution providing loans, grants and expertise to support development goals.
