Disaster risk glossary: hazards, insurance and EU terms

Disaster risk has two vocabularies that rarely meet. Scientists and civil-protection agencies talk about hazard, exposure and vulnerability. Insurers and finance ministries talk about attachment points, quota shares and basis risk. EU policy adds a third layer of named instruments, from the Solidarity Fund to rescEU. Most arguments about who should pay for a flood or a wildfire go wrong somewhere between the three.

This glossary collects the terms used across the site’s pages on national schemes, the protection gap, parametric insurance and the European case studies. Fifty of the entries start from the glossary that the ENHANCE research project (EU Seventh Framework Programme, 2012–2016) assembled for its partners, rewritten in plain English. The rest cover insurance mechanics and the EU and national instruments that decide where losses end up.

Where a definition follows an official source, it says so. The UN Office for Disaster Risk Reduction (UNDRR) published an agreed terminology in 2017, endorsed by the UN General Assembly, and the Intergovernmental Panel on Climate Change (IPCC) keeps a glossary for its assessment reports. Both are paraphrased here, not quoted at length. Where a term has its own page on the site, the definition links to it. Words have anchors, so a single entry can be linked directly, for example the entry on exposure.

A

Abrupt climate change

A change in the climate system that happens much faster than the process driving it, because the system crosses a threshold and responds in a non-linear way. The IPCC uses the term for large shifts that unfold over decades or less. The concern for disaster risk is that historical records, on which most loss models are calibrated, may stop describing the future quickly rather than gradually.

Acceptable risk

The level of potential loss that a society or community considers tolerable, given its social, economic, political and technical conditions. UNDRR treats it as a judgement, not a measurement: neighbouring countries facing the same rivers can build their defences to very different flood standards. Engineering standards, land-use rules and insurance pricing all depend on where that line is drawn, and on who drew it.

Adaptation

Adjustment of natural or human systems to actual or expected climate and its effects, so as to reduce harm or take advantage of new opportunities. The IPCC distinguishes adaptation from mitigation, which tackles the causes of climate change. Raising a flood defence, changing crop varieties in the Júcar basin or pricing insurance for future rather than past risk are all adaptation in this sense.

Avalanche

A mass of snow, sometimes with ice, rock and soil, that breaks loose on a slope and descends at high speed, often within seconds of release. Risk is highest on steep slopes after heavy fresh snowfall, wind loading or a sharp thaw. In Austria avalanches belong to the group of alpine hazards that close rail lines, as the Alpine railways case study documented.

B

Basis risk

The risk that a payout does not match the loss actually suffered. It is the central weakness of index and parametric insurance: a policy may pay when the trigger is met although the policyholder lost little, or pay nothing when the trigger is narrowly missed despite heavy damage. Good trigger design reduces basis risk but cannot remove it. The parametric insurance page discusses examples.

Bayesian analysis

A statistical approach that starts from a prior estimate and updates it as new evidence arrives. In disaster risk it is useful where loss records are short or incomplete, which is most of the time: an expert estimate of flood frequency can be combined with a few decades of gauge data, and revised after each new event instead of being rebuilt from scratch.

Build back better

UNDRR defines it as using recovery, rehabilitation and reconstruction after a disaster to increase resilience, by building risk reduction into rebuilt infrastructure, services, livelihoods and the environment. The Sendai Framework adopted it as a priority for action. In insurance terms, it means paying for a more resilient repair than the original, as Flood Re’s Build Back Better option does for eligible homes.

Building codes

Rules and standards governing the design, construction, materials and alteration of buildings, intended to protect occupants and the public. UNDRR counts them among the most effective non-structural measures for reducing disaster risk, particularly for earthquakes, wind and fire. Their weakness is that they apply mainly to new buildings, so the existing stock, where most of the risk sits, changes slowly.

C

Capacity

The combination of strengths, attributes and resources available within a community, organisation or society to manage and reduce disaster risk and strengthen resilience. UNDRR includes infrastructure, institutions, knowledge, skills and collective attributes such as social relationships and leadership. Capacity is the counterweight to vulnerability in most risk equations, and the hardest part to measure.

Catastrophe bond

A security that transfers a defined slice of catastrophe risk from an insurer, reinsurer or government to capital-market investors. Investors receive interest; if a qualifying event occurs, part or all of their principal is used to pay claims. UNDRR lists catastrophe bonds among formal risk transfer mechanisms. Flood Re placed its first catastrophe bond in 2025, according to its annual report.

Catastrophe model

Software that estimates the probable losses from natural hazards for a portfolio of properties. It combines a hazard module (thousands of simulated events), an exposure database, vulnerability functions linking hazard intensity to damage, and a financial module applying policy terms. Insurers, reinsurers and supervisors use the outputs to price cover and set capital. EIOPA’s protection-gap scores rely on modelled risk of this kind.

CatNat

Short name for France’s natural catastrophe compensation regime, created by the law of 13 July 1982. Every property insurance policy in France must include CatNat cover, financed by a surcharge on the premium, raised to 20% of the property premium from 1 January 2025. Cover applies once an inter-ministerial decree recognises a natural catastrophe in the commune. The CatNat scheme page explains the role of the state reinsurer CCR.

Climate

In the narrow sense, the average weather of a place, described statistically by the mean and variability of quantities such as temperature, rainfall and wind over a period; the IPCC gives 30 years, the period defined by the World Meteorological Organization, as the classical one. The IPCC also uses climate for the state of the whole climate system. The difference from weather is one of timescale: weather is what happens on a given day, climate is what can be expected.

Climate change

The IPCC uses the term for any change in the state of the climate that persists for decades or longer, whatever its cause. The UN Framework Convention on Climate Change (1992) uses a narrower meaning: change attributable directly or indirectly to human activity that alters the composition of the atmosphere, on top of natural variability. The two definitions are often confused in policy documents.

Climate change scenario

A plausible description of how the future climate may differ from today’s, built from assumptions about emissions and run through climate models. A scenario is not a forecast; it is an input for impact studies, such as how flood frequency on the Rhine or drought length in the Júcar basin might change. ENHANCE’s inventory of existing risk scenarios collected such inputs for its case studies.

Climate risk management

A systematic approach to climate-related decisions that aims to reduce the harm and increase the benefits of climate across activities and investments. It covers both today’s climate variability and longer-term change. In practice it joins risk assessment, adaptation planning and risk financing, so that a water utility or an insurer plans for the range of plausible conditions rather than the historical average.

Climate sensitivity

The IPCC uses equilibrium climate sensitivity for the eventual rise in global mean surface temperature after the concentration of carbon dioxide in the atmosphere doubles and the system settles. It is a single number summarising how strongly the climate responds to greenhouse gases, and its uncertainty range carries straight through into projections of floods, heat and drought.

Climate system

The interacting whole made up of the atmosphere, the oceans and other water bodies, the ice and snow (cryosphere), the land surface and living organisms. The IPCC describes it as evolving under its own internal dynamics and under external forcings such as volcanic eruptions, changes in solar output and human changes to the atmosphere and land use.

Climate variability

Variation in the mean state and other statistics of the climate, such as the frequency of extremes, on time and space scales beyond individual weather events. The IPCC separates internal variability, arising within the climate system, from external variability caused by natural or human forcing. A run of dry winters may be variability, a lasting shift in rainfall may be change; telling them apart takes long records.

Coastal erosion

The landward retreat of a shoreline as waves, currents and storms remove sediment faster than it is replaced. Sea-level rise and stronger storms are expected to speed it up on many European coasts. Erosion is a slow-onset hazard, which makes it awkward for insurance: losses are close to certain once a property is near the edge, which makes the risk very hard to insure.

Complex disaster

A disaster with several interacting causes rather than a single trigger, for example a drought combined with conflict, displacement and environmental degradation. The term also covers cascading events in which one hazard sets off another, as when the 2012 earthquake in Emilia damaged drainage works and raised flood risk in the Po basin. Such events break the assumption that hazards can be insured one at a time.

Consorcio de Compensación de Seguros

Spain’s public insurance compensation body, provisional from 1941 and permanent since 1954. It covers extraordinary risks, including floods, earthquakes, volcanic eruptions and atypical cyclonic storms, for anyone holding a qualifying private policy, funded by a compulsory surcharge and a stabilisation reserve. No disaster declaration is needed. The Consorcio scheme page and the Valencia case study show it at work.

Cost-benefit analysis

A method for comparing options by expressing their costs and benefits in money and checking which delivers the largest net benefit. For disaster risk the benefits are mostly avoided losses, which have to be estimated as probabilities over many years. ENHANCE argued that cost-benefit analysis alone misses effects that are hard to price, and used multi-criteria analysis alongside it, as its review of economic instruments explains.

Cost-effectiveness analysis

A method for finding the cheapest way to reach a fixed target, such as protecting a town to a flood standard written into law, without putting a money value on the benefits. It is useful where the goal is set by law or policy and the question is only how to reach it. Its limit is the mirror image of cost-benefit analysis: it never asks whether the target is right.

D

DANA

Spanish acronym for depresión aislada en niveles altos, an isolated upper-level low: a pocket of cold air cut off from the main jet stream. When it sits over warm Mediterranean water it can release extreme rainfall in a few hours over a small area. The DANA of 28 October to 4 November 2024 caused the floods around Valencia covered in the Valencia case study.

Deductible

The part of a loss the policyholder bears before the insurer pays, called the excess in UK usage. It keeps small claims out of the system and gives the insured a stake in preventing damage. National schemes set it by law: France’s CatNat deductible for homes is EUR 380, Spain’s Consorcio charges businesses 7% and homes nothing, and Flood Re applies a GBP 250 excess per claim.

Disaster

UNDRR defines a disaster as a serious disruption of the functioning of a community or society, due to hazardous events interacting with conditions of exposure, vulnerability and capacity, leading to human, material, economic or environmental losses and impacts. The point of the definition is that a hazard alone is not a disaster: a storm over an empty sea is weather.

Disaster preparedness

The knowledge and capacities built in advance by governments, response and recovery organisations, communities and individuals to anticipate, respond to and recover from likely hazardous events. UNDRR includes contingency planning, stockpiling, training, drills and public information. Iceland’s 2005 response plans and 2006 evacuation drills around Eyjafjallajökull are a textbook example, described in the Iceland volcano case study.

Disaster recovery and rehabilitation

UNDRR uses recovery for restoring or improving the livelihoods, health, economic, physical, social, cultural and environmental assets of an affected community, in line with the principle of build back better. Rehabilitation is the narrower step of restoring basic services and facilities so the community can function again. Both phases are when the question of who pays for rebuilding is settled.

Disaster risk

UNDRR defines disaster risk as the potential loss of life, injury, or destroyed or damaged assets that could occur to a system, society or community in a given period, determined as a function of hazard, exposure, vulnerability and capacity. It is a probability, not an event. Insurers express the same idea as an expected annual loss or a loss with a given return period.

Disaster risk management

UNDRR defines it as the application of disaster risk reduction policies and strategies to prevent new risk, reduce existing risk and manage residual risk. It is the operational side of disaster risk reduction: early warning, land-use control, building standards, emergency planning and risk financing, carried out by named organisations with budgets.

Disaster risk reduction

UNDRR describes it as the policy objective of preventing new and reducing existing disaster risk and managing residual risk, all of which contribute to strengthening resilience and to sustainable development. Disaster risk reduction is the goal; disaster risk management is the set of actions taken towards it. The Sendai Framework is the main international agreement on it.

Drought

A period of unusually low rainfall, long enough to cause shortages for people, farming, industry or ecosystems. Meteorological drought is about rainfall, agricultural drought about soil moisture, hydrological drought about rivers and reservoirs. Droughts recur in most climates and develop slowly. In France, clay soil shrinkage after drought is a large CatNat cost; in the Júcar basin drought is shared through water allocation rules.

E

Early warning system

UNDRR defines it as an integrated system of hazard monitoring, forecasting and prediction, risk assessment, communication and preparedness that lets individuals, communities, governments and businesses take timely action to reduce risk before a hazardous event. A warning that reaches no one, or reaches people with nowhere to go, is not a working system. Access to early warning is one of the seven Sendai targets.

El Niño Southern Oscillation

An irregular fluctuation of ocean temperatures and air pressure in the tropical Pacific, alternating between warm El Niño and cool La Niña phases every few years. It shifts rainfall and temperature patterns across much of the world. Its direct influence on European weather is modest, but it drives losses for global reinsurers, who price European cover from the same balance sheet.

Elemental damage insurance

The usual English rendering of the German Elementarschadenversicherung, an optional extension to building and contents insurance covering heavy rain, river flood, backwater and other natural perils. Storm and hail are normally in the basic policy. According to GDV, 57% of German homes had it in 2024. The Germany and Austria page covers the debate on making it standard.

EU Solidarity Fund

An EU instrument created in 2002 that grants money to Member States after major natural disasters and, more recently, health emergencies. According to DG REGIO it applies when direct damage exceeds EUR 3bn in 2011 prices or 0.6% of national income, or in a regional disaster 1.5% of regional GDP. It pays after the event and covers public emergency costs, not private losses. The EU solidarity page covers its largest grants.

Excess of loss reinsurance

A reinsurance contract that pays the part of a loss above a set amount (the retention or attachment point), up to a limit. The ceding insurer keeps everything below the retention. Catastrophe programmes are usually built in layers of excess of loss cover. Norway’s Natural Perils Pool, for example, buys an excess of loss layer above a NOK 2bn retention, according to its 2025 annual report.

Exposure

UNDRR defines exposure as the situation of people, infrastructure, housing, production capacities and other tangible human assets located in hazard-prone areas. It is the “what is in the way” part of risk. Exposure grows when towns expand onto floodplains or values rise, which is why European losses can increase even where hazards do not. The protection gap page shows how EIOPA combines it with insurance penetration.

Extraordinary circumstances

A term in EU Regulation (EC) No 261/2004 on air passenger rights for events outside an airline’s control that release it from paying fixed cash compensation for cancellations. The airspace closures of April 2010 were held to be such an event. In McDonagh v Ryanair (2013) the Court of Justice ruled that the airline’s duty to provide care still applied, without time or money limits. See the Iceland volcano case study.

Extreme weather event

The IPCC defines it as an event that is rare at a particular place and time of year, usually rarer than the 10th or 90th percentile of the observed distribution. What counts as extreme therefore differs by place: a summer temperature that is routine in Seville would be extreme in Bergen. When such conditions persist for a season, the IPCC speaks of an extreme climate event.

F

Flood

The overflow of water onto land that is normally dry. River (fluvial) floods follow prolonged rain or snowmelt upstream; surface-water (pluvial) floods occur when intense rain exceeds drainage capacity; flash floods rise within hours in steep or urban catchments; coastal floods come from storm surges. Floods caused 47% of EU climate-related losses from 1980 to 2024, according to the European Environment Agency.

Flood Re

A reinsurance scheme set up under the UK Water Act 2014 and launched in April 2016 to keep flood cover available and affordable for households at high risk. Insurers pass the flood element of eligible home policies to Flood Re at a price set by Council Tax band, funded partly by a levy on all home insurers. It covers homes built before 1 January 2009 and is due to end in 2039. See the Flood Re page.

Flood risk map

A map showing the likelihood or depth of flooding across an area, by source: rivers, the sea, surface water, reservoirs or groundwater. In England the Environment Agency’s national assessment underlies the official maps, which show risk for an area rather than an individual property. The flood risk maps guide covers the services in England, Wales, Scotland and Northern Ireland.

G

Global warming

The rise in global mean surface temperature relative to a baseline, usually the pre-industrial period of 1850–1900. The IPCC uses the term for the warming caused by human emissions, measured over a 30-year period or more to remove year-to-year noise. It is one aspect of climate change, which also includes changes in rainfall, sea level and extremes.

Greenhouse gas

A gas in the atmosphere that absorbs and re-emits infrared radiation, trapping heat near the earth’s surface. Water vapour, carbon dioxide, methane, nitrous oxide and ozone occur naturally; human activity has added large amounts of the last four and introduced synthetic gases such as some fluorinated compounds. Their rising concentration is the main driver of current global warming.

H

Hazard

UNDRR defines a hazard as a process, phenomenon or human activity that may cause loss of life, injury or other health impacts, property damage, social and economic disruption or environmental degradation. Hazards may be natural, human-induced or a combination, and are described by location, intensity, frequency and probability. A hazard becomes risk only when there is something exposed and vulnerable in its path.

Hyogo Framework for Action

The international plan adopted at the World Conference on Disaster Reduction in Kobe, Hyogo, in 2005, covering 2005–2015. It set priorities for building the resilience of nations and communities but no numerical targets. UNISDR monitored its implementation. Its successor, the Sendai Framework, added seven global targets, a change that ENHANCE partners followed closely at the 2015 conference.

I

Impact analysis

The study of what hazards, or climate change, do to people, assets, economies and ecosystems, using observed losses and modelled scenarios. It answers the question “what happens if”, and feeds recovery planning, risk assessment and the design of insurance and public funds. Good impact analysis needs consistent loss data, which in Europe is still scattered across agencies, insurers and countries.

Insurance penetration

The share of potential losses, properties or households covered by insurance for a given peril. EIOPA’s protection-gap dashboard groups it into bands of 0–25%, 25–50%, 50–75% and 75–100% and sets these against modelled risk to produce a score per country and peril. Low penetration in a high-risk country is the definition of a large gap. See the protection gap page.

Insured loss

The part of a disaster’s economic loss that is paid by insurers, as opposed to the total damage. The gap between the two is the protection gap. According to the European Environment Agency, less than 20% of climate-related losses in the EU from 1980 to 2024 were privately insured. Insured-loss figures are usually published by reinsurers such as Munich Re and Swiss Re or by PERILS.

J

Jökulhlaup

An Icelandic word, now used internationally, for a glacial outburst flood: a sudden release of meltwater from under or beside a glacier, often triggered by a volcanic eruption beneath the ice. Iceland’s Meteorological Office monitors rivers draining ice-covered volcanoes for this reason. Jökulhlaups were part of the local hazard around Eyjafjallajökull in 2010, alongside ash fall. See the Iceland volcano case study.

K

Katastrophenfonds

Austria’s federal disaster fund, first set up as a permanent fund in 1966 after the floods of 1965–66 and now governed by the Katastrophenfondsgesetz 1996. It is financed from a share of income and corporate tax revenue and pays for prevention, damage to municipal assets and, through the Länder, discretionary aid to private households. Victims have no legal claim to that aid. See the Germany and Austria page.

L

Land-use planning

The process by which public authorities decide how land may be used, including where and what may be built. UNDRR treats it as a key tool for preventing new risk, since a house never built on a floodplain needs no flood defence or insurance. It is also where the costs of decisions are least visible: the developer gains, while future owners and insurers inherit the risk.

Low-probability, high-impact event

A hazard that rarely occurs but causes very large losses when it does, such as an extreme river flood, a large earthquake or a major eruption. Such events are hard to plan for because there is little experience of them and the annual budget case for preparing is weak. ENHANCE built its work around improving how partnerships handle exactly this class of event.

M

Mitigation

In disaster risk, UNDRR uses mitigation for lessening or limiting the adverse impacts of a hazardous event, through structural measures such as dikes and non-structural ones such as building rules or awareness. In climate policy the same word means cutting greenhouse gas emissions. The double meaning regularly causes confusion when disaster and climate policy are discussed together.

Moral hazard

The tendency of people who are protected from a loss to take less care to avoid it. In disaster risk it appears when insurance or public aid is expected regardless of behaviour: a homeowner who knows the state will pay may skip flood-proofing, and a government expecting EU aid may underinvest in prevention. ENHANCE’s Romania case study examined the EU Solidarity Fund on this point.

Multi-sector partnership

An arrangement in which public authorities, private companies and civil-society organisations agree to manage a risk together, sharing goals, roles and often costs. The ENHANCE project described such partnerships as voluntary but enforceable, aimed at mutual benefit and lower risk, and studied ten of them across Europe. The case-study atlas introduces each one.

N

Natural Perils Pool

Norway’s industry pool for natural hazard insurance, in operation since 1 January 1980. Cover for storm, landslide, flood, storm surge, earthquake and volcanic eruption is included automatically in every fire insurance policy, at a single rate for the whole country, and member insurers share claims by market share. A separate state scheme covers what cannot be insured. See the Norway scheme page.

P

Parametric insurance

Insurance that pays a pre-agreed amount when a measured event parameter, such as wind speed, rainfall, earthquake magnitude or water depth, passes a set threshold, instead of paying for assessed damage. The FSI and IAIS describe it in these terms in their December 2024 paper. Payment is fast and loss adjustment is unnecessary, at the price of basis risk. See parametric insurance.

Parametric trigger

The measurable condition that releases a parametric payout, for example wind speed above a set value within a defined area, or flood depth at a sensor. A trigger must be objective, reported by a trusted independent source and closely correlated with the losses it is meant to cover. The choice of trigger decides how much basis risk the policyholder carries. Examples are on the parametric insurance page.

Prevention

UNDRR defines prevention as activities and measures to avoid existing and new disaster risks altogether, for example a dam that eliminates a flood risk or land-use rules that keep homes out of a hazard zone. Complete prevention is often impossible, which is why most measures are classed as mitigation. Funding for prevention has historically been small compared with spending on response and relief.

Protection gap

The part of economic losses from disasters that is not insured, and therefore falls on households, businesses and governments. EIOPA’s dashboard scores the insurance protection gap for natural catastrophes from 0 to 4 per peril and country, combining modelled risk with insurance penetration, and treats 3 or more as a relevant gap. The protection gap page sets out the 2025 scores.

Public-private partnership

A long-term arrangement in which a public body and private firms share the delivery, risk and financing of a service or asset. In disaster insurance, the term covers schemes such as Flood Re or the French CatNat regime, where private insurers sell and service policies while the state sets terms or stands behind the losses. It is one form of multi-sector partnership.

Q

Qualitative analysis

Risk assessment that uses descriptive categories, such as high, medium and low, rather than numbers. It is quicker and cheaper than quantitative modelling and is often used to screen many sites or hazards before choosing where detailed work is worthwhile. England’s long term flood risk categories are a public example; the long term flood risk guide explains how to read them.

Quota share

A reinsurance contract in which the reinsurer takes an agreed percentage of every policy in a portfolio, sharing premiums and losses in the same proportion. It is the simplest form of proportional reinsurance. France’s CCR, for example, offers insurers a 50% quota share on CatNat risks, combined with unlimited stop-loss protection, according to CCR.

R

Reinsurance

Insurance bought by insurers. A reinsurer takes over part of an insurer’s risks in return for a share of the premium, allowing the insurer to write more business and survive large events. Reinsurance comes in proportional forms such as quota share and non-proportional forms such as excess of loss. Several national schemes, including Flood Re and CCR, are themselves reinsurers.

rescEU

A reserve of response capacities under the Union Civil Protection Mechanism, created in 2019 and fully funded by the EU. According to DG ECHO it includes firefighting aircraft and helicopters, medical evacuation capacity and stockpiles for chemical, biological, radiological and nuclear emergencies, hosted by Member States and deployed where national resources are overwhelmed. It pays for response, not for damage. See the EU solidarity page.

Residual risk

UNDRR defines residual risk as the disaster risk that remains in unmanaged form even when effective risk reduction measures are in place, and for which emergency response and recovery capacities must be maintained. Every dike has a design standard and every standard can be exceeded. Insurance and public funds exist largely to deal with residual risk.

Resilience

UNDRR defines resilience as the ability of a system, community or society exposed to hazards to resist, absorb, accommodate, adapt to, transform and recover from their effects in a timely and efficient way, including by preserving and restoring its essential structures and functions. The word is used so widely that it often means little; it is most useful when attached to a measurable recovery time or service level.

Retrofitting

Reinforcing or upgrading existing buildings and infrastructure so that they withstand hazards better, for example raising electrical sockets, fitting flood doors, strengthening walls against earthquakes or replacing roofs to resist wind. UNDRR lists it as a mitigation measure. Because buildings last for decades, retrofitting reaches risk that new building codes do not.

Risk

In disaster science, the combination of the probability of an event and its negative consequences, often written as a function of hazard, exposure and vulnerability. ENHANCE’s glossary described it as the probability of harmful consequences or expected losses from the interaction of hazards with vulnerable conditions. In insurance, risk also refers to the insured object or peril itself.

Risk assessment

UNDRR describes disaster risk assessment as a qualitative or quantitative approach to determine the nature and extent of risk by analysing potential hazards and evaluating existing conditions of exposure and vulnerability. It is the starting point for every decision on defences, land use and insurance. ENHANCE catalogued the tools its partners used in its inventory of risk assessment methods.

Risk-based pricing

Setting insurance premiums according to the expected loss of each individual property, so that a home on a floodplain pays more than one on a hill. It gives a clear price signal and rewards risk reduction, but can make cover unaffordable where risk is highest. Several national schemes deliberately depart from it. The home insurance in flood risk areas guide shows how this works in the UK.

Risk layering

Matching different instruments to different layers of risk according to frequency and severity. Frequent small losses are best handled by households, local budgets or prevention; medium losses by insurance; rare extreme losses by reinsurance, catastrophe bonds or state guarantees. ENHANCE partners used the idea, citing Mechler and colleagues in Nature Climate Change (2014), to argue that no single tool fits all risks.

Risk modelling

The use of numerical methods to estimate the frequency and severity of potential disaster losses. Approaches range from statistical analysis of past losses to physical simulations of hazards combined with exposure and vulnerability data, as in a catastrophe model. The quality of any model is limited by its data, and European loss data remain incomplete for many perils and countries.

Risk perception

The way individuals and groups judge a hazard, which rarely matches the statistical risk. It is shaped by personal experience, culture, trust in authorities, media coverage and how recently the last disaster occurred. Risk perception explains much of why people under-insure. ENHANCE’s Wadden Sea case study compared risk cultures on the Dutch and German coasts.

Risk transfer

UNDRR defines risk transfer as shifting the financial consequences of particular risks, formally or informally, from one party to another, so that a household, community, company or state obtains resources from the other party after a disaster in exchange for ongoing or compensatory benefits. Insurance is the familiar form; reinsurance, catastrophe bonds, contingent credit and reserve funds are the formal mechanisms UNDRR lists.

S

Sendai Framework

The Sendai Framework for Disaster Risk Reduction 2015–2030, adopted at the Third UN World Conference on Disaster Risk Reduction in Sendai, Japan, in March 2015 and endorsed by the UN General Assembly. It sets seven global targets, including lower disaster mortality and economic losses, and four priorities for action. ENHANCE partners reported on its negotiation in a series of letters from Sendai.

Solidarity

In disaster policy, the principle that the costs of a disaster are shared beyond those directly hit, through taxation, uniform insurance premiums or cross-border aid. Uniform national rates in Spain or Norway are solidarity between low-risk and high-risk policyholders; the EU Solidarity Fund is solidarity between states. The importance of solidarity page explains the wider idea.

Stabilisation reserve

A reserve that a catastrophe insurer builds up in quiet years to pay claims in exceptional ones, smoothing results over time instead of within a single year. Spain’s Consorcio relies on one alongside its surcharges; its annual report gives the reserve available at the end of 2025 as EUR 7,518.7m. France’s CCR keeps an equalisation reserve for the same purpose.

State aid

Support from public resources that gives certain firms an advantage, generally prohibited under EU law. Article 107(2)(b) of the Treaty on the Functioning of the EU makes an exception for aid that makes good damage caused by natural disasters or exceptional occurrences. Several Member States used it to support airlines after the 2010 ash cloud, according to ASIL. See the Iceland volcano case study.

Stochastic optimisation

A decision technique that chooses the best option under uncertainty, using many random samples from an estimated loss distribution rather than a single expected value. In disaster finance it can help decide, for example, how large a reserve fund or how much reinsurance a government should hold given the range of possible losses. ENHANCE’s risk tools inventory listed it among partner methods.

Stochastic simulation

Running a model thousands of times with randomly varied inputs, as in Monte Carlo simulation, to produce a distribution of possible outcomes rather than one answer. It underlies catastrophe models, which simulate many years of synthetic events, and allows risk managers to compare options by their effect on rare but severe losses as well as on the average.

Storm surge

A rise in sea level caused by strong winds and low atmospheric pressure pushing water towards the coast, on top of the normal tide. On the shallow North Sea, surges caused the deadly floods of 1953 and 1962. Sea-level rise makes each surge more dangerous. The Wadden Sea case study looked at how Dutch and German coastal partnerships manage the hazard.

Surcharge

A fixed charge added to an insurance premium to fund a catastrophe scheme. France’s CatNat surcharge is a percentage of the property premium; Spain’s Consorcio surcharge is a rate on the sum insured, the same across the country. A flat surcharge makes cover near universal and affordable, but sends no price signal about local risk, which is the main criticism of both systems.

Sustainable development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, in the wording popularised by the 1987 report of the World Commission on Environment and Development. Disaster losses are a direct threat to it, which is why the Sendai Framework, the Sustainable Development Goals and the Paris Agreement were negotiated in the same year, 2015.

U

Uncertainty

The degree to which a value or outcome is unknown, because of missing data, natural variability, disagreement between experts or unclear definitions. The IPCC distinguishes it from risk, which can be quantified with probabilities. In disaster planning uncertainty is not a reason to wait; ENHANCE argued that partnerships must be flexible enough to work under it.

Union Civil Protection Mechanism

The EU framework, set up in October 2001, through which the EU and participating states coordinate help when a disaster overwhelms a country’s own capacities. According to DG ECHO it has been activated more than 880 times since 2002. It covers prevention, preparedness and response, and includes the rescEU reserve. See the EU solidarity page.

V

Volcanic Ash Advisory Centre

One of the centres designated by the International Civil Aviation Organization to track volcanic ash clouds and issue advisories to aviation. The London VAAC, run by the UK Met Office, covers the area including Iceland and the north-east Atlantic. During the 2010 eruption it received ash status reports from the Icelandic Meteorological Office every three hours, according to the IMO. See the Iceland volcano case study.

Volcano

An opening in the earth’s crust through which molten rock, gas and fragments erupt, and the landform built up around it. Eruptions range from gentle lava flows to explosive events that throw ash high into the atmosphere. Iceland’s ice-covered volcanoes add meltwater floods to the hazard. The 2010 eruption of Eyjafjallajökull, rated 3 on the Volcanic Explosivity Index by the IMO, was moderate in size but disrupted aviation across Europe.

Vulnerability

UNDRR defines vulnerability as the conditions, determined by physical, social, economic and environmental factors or processes, that increase the susceptibility of an individual, community, assets or systems to the impacts of hazards. The IPCC uses a related definition focused on climate change. Two towns with the same flood depth can suffer very different losses; vulnerability is the reason.

W

Wildfire

An uncontrolled fire burning in forest, scrub, grassland or other vegetation. It needs fuel, oxygen and a heat source, and spreads fastest in hot, dry and windy weather. EIOPA scores Portugal and Greece at 3 for wildfire, a relevant gap. The Chamusca case study examined forest insurance after the 2003 fires.