Hurricane Ivan caused severe damage in Grenada in 2004.

Representatives from 18 countries in the region gathered at the headquarters of the World Bank, which is coordinating the programme, to appeal for donor support.

World bank officials say each Caribbean participating country will pay up $1 million in exchange for up to $30m in coverage.

The officials said that by pooling their risk, countries will be able to reduce individual premiums by some 40 percent.

One other advantage is that funds will likely be made available quickly in the event of a natural disaster.

Caroline Anstey, the World Bank director for the Caribbean, said: "One of the gaps in the current approach to natural disaster is after a hurricane or an earthquake hits, a government is dependent on trying to get support from donors.

"That period is an extremely important one, to allow the governments to carry on working to pay salaries," she said.

Next Hurricane Season

Since 1979, hurricanes have caused more than $16 billion in losses in Caribbean nations, according to World Bank data.

The International Development Association, the bank's low-interest lending arm, has pledged $27m in funding for the Caribbean Catastrophe Risk Insurance Facility, as the programme will be called.

But another $30m is needed to get the facility going in time for the next hurricane season, which starts in June.

Officials also said the scheme will serve as a model that could be used in other areas with small countries.

But it won't solve all problems.

"Countries still need to engage in mitigation and improve territorial building codes and emergency services," said Francis Ghesquiere, a senior World Bank urban specialist.