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 moreRisk profile
Underlying risks that an organisation or country is exposed to and the extent to which they are mitigated by pre-arranged finance.
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.
Total crisis financing
Development funding focused mainly on crisis prevention, preparedness and response activities.
Basis risk
The gap between measured indicators and real losses causing payouts to differ from actual damage.
Risk layering
Using different financial instruments for different disaster frequencies.
Preparedness
Skills, systems and resources developed to respond effectively to likely future crises.
