Understanding disaster risk: Key concepts

Deterministic risk considers the impact of a single risk scenario, whereas probabilistic risk considers all possible scenarios, their likelihood and associated impacts.

Losses (the result of being deprived of something) are a measure (quantified or not) of the damage or destruction caused by a disaster. The impact of a disaster can, however, be much farther reaching.

Extensive risk is used to describe the risk associated with low-severity, high-frequency events, mainly but not exclusively associated with highly localized hazards. Intensive risk is used to describe the risk associated to high-severity, mid to low-frequency events, mainly associated with major hazards.

If the potential occurrence of a disaster is not taken into account in the government's budget and a disaster occurs, this could entail a deficit for the country and negatively impact the country’s creditworthiness. A sovereign risk financing strategy aims to strengthen the government's capacity to respond after a disaster while protecting its fiscal balance.

Systemic risks involve: multiple communities, cities, regions, or countries; risks that are interconnected; effects that move from one system or network to another and are uncertain or unpredictable; and they have potentially devastating outcomes – like the collapse of entire systems and threats to society as a whole.

Compound risk is the risk that two or more hazards or risk drivers interact, either simultaneously or consecutively, producing impacts greater than the sum of individual events, and complicating response and recovery.

Cascading risk is the probability of a chain reaction resulting from a hazard or failure which triggers interconnected impacts that may escalate across systems and sectors.