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The weather risk market makes it possible to manage the financial impact of weather through risk transfer instruments based on a defined weather element, such as temperature, rain, snow, wind, etc. Weather risk management is a way for organizations to limit their financial exposure to disruptive weather events.
Risk is subcategory of uncertainty that is considered to make potential issues and problems more manageable. [12]: 11–12 [13] Risk is a term used widely across different management practice areas. Examples are business, economics, environment, finance, information technology, health, insurance, safety, and security.
Risk management is the identification, evaluation, and prioritization of risks, [1] followed by the minimization, monitoring, and control of the impact or probability of those risks occurring. [2]
Parametric insurance (also called index-based insurance) is a non-traditional insurance product that offers pre-specified payouts based upon a trigger event. [1] Trigger events depend on the nature of the parametric policy and can include environmental triggers such as wind speed and rainfall measurements, business-related triggers such as foot traffic, [2] and more.
Weather derivatives are financial instruments that can be used by organizations or individuals as part of a risk management strategy to reduce risk associated with adverse or unexpected weather conditions. Weather derivatives are index-based instruments that usually use observed weather data at a weather station to create an index on which a ...
ISO 31000 is a set of international standards for risk management.It was developed in November 2009 by International Organization for Standardization. [1] The goal of these standards is to provide a consistent vocabulary and methodology for assessing and managing risk, resolving the historic ambiguities and differences in the ways risk are described.
Disaster risk results from the interaction of three factors: hazard(s), vulnerability and exposure. [2]: 14 This is illustrated in the risk equation. Disaster risk reduction is extensive: Its scope is much broader and deeper than conventional emergency management. The objectives of DRR align with many sectors of development and humanitarian work.
Climate risk management is a generic term referring to an approach to climate-sensitive decision making. The approach seeks to promote sustainable development by reducing the vulnerability associated with climate risk.