But now a dedicated Pacific insurance company has been set up in the Cook Islands to do just that.
The Pacific Catastrophe Risk Insurance Company is a World Bank-led initiative, with financial support from Japan, Germany, the United Kingdom, and the United States of America.
The company recently paid-out $4.84 million to help Tonga with response for Cyclone Gita.
“A big part of the philosophy is around being able to be proactive and doing what a country needs to do to be able to be there for its people” says chief executive officer David Traill.
“A lot of our technical assistance work is both working with the disaster risk management team and also the ministries of finance around their planning for events like these… so when it does happen, we can release the funds and they’re then able to act as quickly as possible”.
Traill says the premiums are based on “how susceptible buildings are to damage”.
They use a model to explore the costs of damage caused at various wind speeds.
“Then we basically take a portion of that, called emergency losses, which are the costs for a government to (be able to) respond and help its people… we can give them the money upfront, as quickly as possible, so they can get out on the ground and start doing something.
“Tonga is paying a little bit themselves, but they’ve also had help from international development grants and things like that. There are a lot of very small countries in the Pacific that actually do qualify for these grants because of either their GDP per capita or the fact that they are so small”.
Traill says the company is aiming to extend its offering to a wider Pacific base and is looking beyond the current cover offered only for climate and seismic events.
“It’s important that governments have options. Each country is exposed to natural perils in different ways. “
Countries registered with company are the Cook Islands, Tonga, Samoa, Vanuatu and the Marshall Islands,