Social Vulnerability and Financial Risk Management in Natural Disasters: A Systematic Review

Abstract

Natural disasters disproportionately affect socially vulnerable populations, whose susceptibility is shaped by factors such as poverty, limited access to resources, and social inequality. Financial risk management strategies, including insurance schemes, emergency funds, contingent loans, and catastrophe bonds, are critical in mitigating economic losses. This systematic literature review synthesizes studies published between 2020 and 2023 to examine the interplay between social vulnerability and financial risk management in disaster contexts. Findings reveal that integrating social vulnerability assessments, such as Social Vulnerability Indices (SVIs), into financial risk management enhances the targeting and effectiveness of disaster interventions. Public-private partnerships and inclusive governance structures further support equitable disaster resilience. However, gaps remain in operationalizing these integrated approaches, particularly in regions with limited institutional capacity. Future research should focus on developing holistic frameworks that align social vulnerability metrics with innovative financial tools to promote inclusive and effective disaster resilience strategies.