Expected asset losses �<sup><u>�Hazard� ∙ �Exposure� ∙ �Asset vulnerability�</u></sup> Risk to wellbeing � Socioeconomic resilience Socioeconomic resilience Socioeconomic resilience ( _resilience_ for short in this paper) measures the ability of an economy to minimize the impact of asset losses on wellbeing and is one part of the ability to _resist_ , _absorb_ , _accommodate_ and _recover in a timely and efficient manner_ to asset losses (the qualitative definition of resilience from the United Nations) _._ In an idealized case of perfect risk‐sharing across the population, no irreversible impacts on human capital, and no pre‐existing inequality, welfare losses are equal to asset losses. Socioeconomic resilience at 50% means that welfare losses are twice as large as asset losses, and could be reduced by half if inequality disappeared, losses were perfectly shared, and irreversible impacts were avoided.

We develop and use a model to estimate expected asset losses and expected welfare losses, and quantify socioeconomic resilience in 117 countries. The model builds on Hallegatte et al. (2016b), which only considered river floods and 90 countries. Here we add new countries thanks to new socioeconomic data, and we introduce additional hazards – coastal floods and storm surge, windstorm, earthquakes, and tsunamis – using the risk assessment provided in the Global Assessment Report (UN‐ISDR 2015). We also simplify the model – focusing on the factors that were found to have most influence on our previous assessment and disregarding other factors – and improve our modeling of insurance and social protection.

Like all models, ours is incomplete and our assessment provides a partial view of resilience. For instance, we do not include many non‐economic components such as the link between disasters, conflicts, and state fragility. Nevertheless, our quantification informs on the ability of economies to deal with natural disasters and on the prioritization of policy options to improve resilience.

We find that some policy options can reduce welfare losses by increasing socioeconomic resilience, from an unchanged amount of asset losses. Adaptive social protection is a particularly promising one. In all countries, every dollar spent on post‐disaster support yields at least $1.30 of increased welfare. In 11 countriesAngola, Bolivia, Botswana, Brazil, Central African Republic, Colombia, Honduras, Lesotho,  Panama, South Africa, and Zambia every $1 spent on post‐disaster transfers yields well‐being benefits of more than $4. Our simulations also suggest that uniform transfers may be preferable. Indeed, wealthier households may receive most of the available resources if transfers are proportional to losses, leaving little for those most in need. There is thus a complementarity between premium‐funded insurance programs for wealthier households who can afford the transaction costs, and publicly‐funded adaptive social protection for the poorer.

Resilience gains from poverty reduction can even offset increased asset losses. Increasing by 10 percentage points the share of income of the bottom 20 percent in the 117 countries would increase asset losses by 1%, since more wealth would be at risk. But it would also reduce the impact of income losses on wellbeing, increasing resilience by 0.6% on average, and ultimately reduce welfare losses by $500 million per year.

These findings suggest that the common practice of tracking only asset losses (IPCC, 2012) may give an overly pessimistic view of progress made by countries in terms of disaster risk management; and that 3