Deirdre O’Sullivan-Winks from Centre for Disaster Protection highlights 7 habits of Highly Effective Disaster Risk Financing (DRF):

1. DRF should focus on those risks that are impacting on those most vulnerable – We need to specifically target poor households and target poverty
2. Timeliness – It is important that the financing is triggered at the right time and have to be well aligned with the early actions it finances
3. Financing should improve constantly – We have to be in a constant learning mode. We need to closely involve the recipients of the early financing in a constant process of monitoring and evaluation.
4. Risk management needs to be locally installed – Those exposed and vulnerable to disaster risk need to be at the centre of the risk management and involved in all phases of the anticipatory humanitarian action cycle. 
5. DRF needs to be a trustable guarantee to vulnerable communities – Clear payout terms allow vulnerable households to make decisions on their livelihoods in the face of an approaching hazard risk.  
6. Effective DRF offers good value - There are lots of different instruments and approaches that could be used for DRF and it makes sense to use financial products that provide the most cost-effective protection, taking into account costs for maintenance and development.
7. Last but not least, DRF needs to align with the bigger picture – anticipatory financing should align with existing financing systems in a country, building as much as possible on what exists before innovating.
   

Have a look a closer look at the seven principles here.