Illustrative: event footprints crossing a portfolio, losses rising and the exceedance-probability curve

Risk Academy, led by the Nexus Consortium · Finance and Economics · Department of Insurance and Actuarial Science

Risk layering, contingency budgets, contingent credit, parametric cover and catastrophe bonds

Disaster risk finance

Disaster risk finance plans in advance how the costs of disasters will be met.

01Scope

What the discipline covers

The subtopics its courses and labs teach.

Courses
In preparation
Levels
In development
Labs
Exposure lab, Trigger lab, Map lab
02Maps

Build a twin of any place

Search any place or open the world; the layers and generators follow disaster risk finance on the planet map, the globe and in 3D.

Houston and the Ship Channel: a flat plan of the faculty twin. Terrain 0 to 66 m; 30 power plants, 11,875 MW; 7 refineries and chemical works; 2 port land; 29 named works; 154 named industrial sites; Surface water extent, OPERA DSWx (HLS): read live when the 3D twin opens; Built-up and settlement extent, HBASE 2010: read live when the 3D twin opens. Contours every 10 metres from the elevation grid; power plants as marks; refineries, terminals and industrial sites as marks.
Houston and the Ship Channel, United States. Flat plan of the same data: relief as contours from the inline grid, the plants by capacity, the industrial points by kind and the numbers below. The 3D twin opens on devices that can draw it, once its data and code have been checked.
  • Terrain 0 to 66 m
  • 30 power plants, 11,875 MW
  • 7 refineries and chemical works
  • 2 port land
  • 29 named works
  • 154 named industrial sites
  • Surface water extent, OPERA DSWx (HLS): read live when the 3D twin opens
  • Built-up and settlement extent, HBASE 2010: read live when the 3D twin opens
Credits and dates per layer are listed under the stage. Relief in the twin is exaggerated ×1.5 for legibility.

Drag to move, right drag or Shift with a drag to turn and tilt, Ctrl with the wheel to zoom. Keyboard: arrows move, Shift with arrows turn and tilt, + and – zoom, 0 resets, V steps through the views, Escape clears.

Flat plan of the same data: relief as contours from the inline grid, the plants by capacity, the industrial points by kind and the numbers below. The 3D twin opens on devices that can draw it, once its data and code have been checked.

The boundaries, names and designations shown do not imply any judgement on the legal status of any territory, or any endorsement or acceptance of such boundaries. Countries: Natural Earth (public domain).

03Live map

Hazards now in India

Flood water, active fires, heavy rain and smoke, beside where people live, over India.

The interactive map needs JavaScript; the layer list and sources are below.

Layers 3

Hazards now

Latest available

NASA GIBS / EOSDIS · ASTER GDEM (METI, NASA) · Blue Marble (NASA) · © OpenStreetMap contributors (ODbL) · Natural Earth

Loading the latest NASA imagery.

Drag to move. Ctrl or ⌘ and scroll, pinch or the buttons to zoom; hover for the values under the pointer; reset returns to the region.

Hazards now, framed on India.Satellite and model products as NASA publishes them, each with its own date. They are indicators, not assessments of any place.

Data: NASA GIBS · ASTER GDEM · Blue Marble · © OpenStreetMap contributors · Natural Earth · NASA EONET · U.S. Geological SurveySources and licences

  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • VIIRS near-real-time products (flood, land surface temperature, snow cover, corrected reflectance), NASA LANCE; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • NASA Fire Information for Resource Management System (FIRMS), VIIRS 375 m active fire product, NASA LANCE; vector tiles via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • GPM IMERG precipitation, NASA Precipitation Processing System; distributed by the NASA Goddard Earth Sciences Data and Information Services Center (GES DISC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • MODIS and VIIRS atmosphere products, NASA LANCE and LAADS DAAC; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Center for International Earth Science Information Network (CIESIN), Columbia University. 2018. Gridded Population of the World, Version 4 (GPWv4): Population Density, Revision 11. NASA Socioeconomic Data and Applications Center (SEDAC). Licensed under CC BY 4.0. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). doi:10.7927/H49C6VHW. CC BY 4.0
  • ASTER GDEM is a product of METI and NASA (ASTER Global Digital Elevation Model V003, NASA LP DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). Cite as: NASA/METI/AIST/Japan Spacesystems and U.S./Japan ASTER Science Team (2019). ASTER Global Digital Elevation Model V003. doi:10.5067/ASTER/ASTGTM.003. NASA open data
  • Made with Natural Earth. Free vector and raster map data @ naturalearthdata.com. Public domain
  • © OpenStreetMap contributors (ODbL), via NASA GIBS (coastlines, boundaries, roads and place names). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). ODbL
  • Blue Marble, NASA Earth Observatory; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Context on the globe and flat map: coastlines, boundaries, roads and place names from NASA GIBS reference layers (OpenStreetMap data, ODbL, © OpenStreetMap contributors); Blue Marble imagery as an optional base; 3D terrain and the elevation read-out from the ASTER GDEM elevation colour index (5 m to 200 m classes, exaggerated for legibility). Boundaries are drawn as published and imply no position on any territory.
  • Globe: MapLibre GL JS 6.9.1, BSD-3-Clause, © MapLibre contributors.
  • Live events: NASA Earth Observatory Natural Event Tracker (EONET); events are indicative and keep their original source links.
  • Live: NASA EONET Events are indicative, not authority warnings.
  • Live: U.S. Geological Survey Events are indicative, not authority warnings.
  • NASA GIBS: We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS).
  • River discharge forecast, 30 days with range (GloFAS via Open-Meteo): Contains modified Copernicus Emergency Management Service information 2026; not a flood warning.
  • Weather data by Open-Meteo.com (https://open-meteo.com/), licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/).
  • Optional layers (20 sources in the layer list: live, forecast, observed and context) print their provider credit on the map and here when switched on; forecasts are model output and derived indices are estimates.

Layers and dates

  • Flood water, 3-day composite: VIIRS Global Flood Product, NASA LANCE · 14 Oct 2026
  • Active fires and thermal anomalies: VIIRS NOAA-20 375 m (FIRMS), NASA LANCE FIRMS · 13 Oct 2026
  • Precipitation rate, daily mean: GPM IMERG, NASA GES DISC · 12 Oct 2026
  • Aerosol optical depth, daily: VIIRS NOAA-20 Deep Blue AOD, NASA LANCE · 13 Oct 2026
  • Population density, 2020: Population: CIESIN, Columbia University, Gridded Population of the World v4.11 (2018), NASA SEDAC, CC BY 4.0 · static

04The subject

The subject, methods and measures and debates and bodies

The field and its scope

For finance ministry, disaster management, development bank and insurance staff who need to arrange in advance how the cost of a disaster will be paid and by whom.

05The method

Layering disaster risk: reserves for the frequent, insurance for the rare, and the cost of what is left

A government faces frequent small disaster losses and rare large ones; each layer is cheapest to finance with a different instrument, and the retention level where reserves end and insurance begins sets the yearly cost of the whole strategy.

Sources: Ghesquiere and Mahul, Financial protection of the state against natural disasters: a primer (2010); Clarke and Dercon, Dull disasters? How planning ahead will make a difference (2016); Cummins, CAT bonds and other risk-linked securities: state of the market and recent developments (2008).

06At a glance

At a glance, standards and evidence, research and evidence, what is changing and learning

Disaster risk finance at a glance

risksacademy.comfinance-economicsdiscipline

Disaster risk finance: 0 primary courses open, 0 in preparation and 3 also taught here, across 8 subtopics and 3 connected disciplines. Courses: RAN-301 L2 also taught here, RAN-323 L2 also taught here, RAT-226 L2 also taught here.20L1L2L3L40
Disaster risk finance at a glance
  • Open, 0
  • In preparation, 0
  • Also taught here, 3
  • Subtopics, 8
Course codes from the curriculum; study levels L1 to L4.
Twin builderBuild a twin of any placeWorked example: Houston and the Ship Channel · 5 generators · 11 layers · 3 instruments
07Console

How Disaster risk finance is taught, as a process you can run

Press Play to run this process from this page's own data.

08Practice

Practice, learning and connections

How technology helps and what risk it brings

09Take part

Take part in Finance and Economics

Start from who you are.

10References

Core references and where to begin

Start with Clarke, then Ghesquiere, then Cummins.

11Questions

Questions, answers and key terms

Is study here free?
Yes. Every course and learning material of Risk Academy, led by the Nexus Consortium, is free to study, self-paced or with a cohort. Ordinary participation has no fee; paid work, internships and fellowships are separate arrangements.
What does completing a course give me?
A completion record: the course, its version, the date and what was assessed, private by default and shared by you. It stacks into discipline, department and programme achievements. A record states what was studied and assessed and does not certify competence; it is not a licence, a professional title or an employment status.
Where do the data and the places come from?
Every faculty teaches on a twin of a real place built from open data; each layer carries its provider, licence and date, and every result on the Academy states its source. Maps and figures are indicators for teaching, never an assessment of a place.
How do I take part beyond the courses in disaster risk finance?
Form a competence cell of three to seven people, study a shared pathway, take a supervised assignment in the National Working Groups, or bring a cohort from your institution. For organisations.

Key terms

Term

Risk layering

Matching financing instruments to events of different frequency and severity.

Term

Parametric trigger

A payout rule based on a measured hazard parameter rather than assessed loss.

Term

Basis risk

The mismatch between a parametric payout and the actual loss.

Term

Catastrophe bond

A security that transfers defined catastrophe risk to investors.

ReportsContribute

Contribute evidence from this page.

Reports is the Consortium's quarterly publication. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work.

Risk Academy
Disaster risk finance

Start with an open course

The catalogue lists each course with its outcomes, labs, hours and level.

Risk Academy

Courses · practice · credentials

Not for profit

Our articles, maps and twins are free to read and free to republish. Readers and partners keep it that way.

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Who funds us

Risk Academy is a not-for-profit institution. To ask who funds a piece of work, use the funding questions form.

Independence

Editors and the expert reviewers named on each article decide what we publish. Funders and partners do not review or approve articles before publication.

Licence

Articles: CC BY 4.0. Figures, maps, twins and data: CC BY 4.0. Other uses: ask through the permissions form.