Inter-American Development Bank (IDB) will issue a $100m insurance policy in the Dominican Republic in partnership with Swiss Re, to protect the country against natural catastrophes like hurricanes and earthquakes.

IDB and Swiss Re have set up an insurance company exclusively to provide this five-year policy, reported Reuters.

The two firms plan to split the policy’s exposure in two, with $50m covering earthquake risk and $50m to protect against hurricanes.

According to Reuters, the policy will provide $100m of cover for the Dominican Republic for each of the five years.

Any payoff would be determined by the magnitude and location of a quake or hurricane.

Reuters quoted IDB senior financial sector specialist Guillermo Collich saying there are plans to extend the platform to cover other perils in the Dominican Republic — such as flooding and volcano risks as well as agricultural insurance and coverage for health-related risk and longevity.

We are currently working on a second facility being set up in Central America – most likely Costa Rica, he added.