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 transfer
When disaster risk is shifted to insurers or capital markets.
Contingent liabilities
Possible financial obligations that only become real if specific future events occur.
Attachment point
The loss level above which a reinsurer begins paying under a reinsurance agreement.
Crisis
A situation where severe needs overwhelm local and national capacity to respond effectively.
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.
Ex ante
Actions, decisions or financial arrangements made before a disaster or crisis occurs.
