Natural disasters have caused, and will continue to cause, significant losses in the EU Member States. Moreover, climate change is expected to amplify the frequency and intensity of most natural disasters. Governments step-in to cover the disasters-related costs such as emergency relief, recovery and reconstruction. Public authorities also act as insurer of last resort, in particular in those countries where insurance coverage is low. They make payments for legal commitments to cover the costs of disasters, and when there is a moral obligation to provide financial assistance. Natural disasters and climate change thus represent a real and increasing challenge for public finances, adding to fiscal sustainability issues such as a high debt level and an ageing population. There is little evidence on how EU Member States pre-arrange disaster financing and on past disasters financing. This discussion paper aims to provide an overview of relevant concepts for the design of a disaster risk financing strategy. It provides evidence from EU and Member States on disaster financing with a view to inform the debate on strengthening disaster financial resilience.