Vanuatu Can’t Get Insurance — and That Puts All of Us at Risk

February 23, 2026 10:56 pm | Posted in Business News | Share now TwitterFacebook

By Paul Vogelsberger.

I’ve been in Vanuatu since 2005. I’ve watched this country handle one hard hit after another — cyclones, earthquakes, global shocks, airline problems, shipping delays — and every time people just get on with it. We fix things, clean up, reopen, and keep working.

Right now there’s a problem building quietly in the background, and it’s bigger than a single resort or a single building.

A lot of commercial property owners in Vanuatu can’t get proper insurance anymore. Some can’t get insurance at all. Others are being offered cover that looks fine on paper but doesn’t really protect the building, or the premium is so high it doesn’t make business sense.

If you own a hotel, a shop, a warehouse, an apartment development, an office building — you’ll know exactly what I mean.

And here’s where it becomes a national issue: banks don’t like unsecured property. Every property loan comes with a requirement to keep the building insured. That’s standard banking. The building is the collateral.

So what happens when insurance can’t be purchased?

You can be paying your loan on time, running a healthy business, employing people, paying VAT and wages — and still end up in breach of your loan conditions because there’s no insurance available to buy.

That’s what we’re facing now.

If that problem spreads across the country — and it already has — then banks end up with a loan book full of “technical breaches”. It doesn’t matter if the businesses are sound. The paperwork says otherwise.

Once the banks tighten up, the whole economy feels it:

• refinancing becomes difficult
• development slows
• property values weaken
• investors sit on their hands
• jobs disappear quietly, one by one

Tourism is one of the first places you see it, because tourism relies on buildings. Resorts and hotels are physical assets. If a country can’t insure them, it becomes harder to finance them, and harder to attract new investment.

Nasama Resort is a strong building. During Cyclone Pam, when a lot of resorts were smashed and shut for years, Nasama stayed open. We didn’t close for one day. We ended up hosting NGOs and media because they needed somewhere that still worked.

After Pam, we had two more serious cyclones:

• Cyclone Judy (Category 4): no claim
• Cyclone Kevin (Category 5): no claim

Then the 2024 earthquake damaged a huge part of Port Vila and surrounding areas. Nasama had no structural damage. The insurance settlement was 500,000 vatu for room breakages.

Here are the actual settlements:

• Cyclone Pam (CAT 5) – McLarens (2016): 3,986,275 vatu
• Cyclone Judy (CAT 4): ZERO
• Cyclone Kevin (CAT 5): ZERO
• Earthquake 2024 – CBH: 500,000 vatu

That’s the track record of a building that has been tested repeatedly.

During this time we paid 37,900,000 vatu in premiums!

And still, we can’t secure full replacement insurance now.

That tells you this isn’t about “bad buildings”. It’s about Vanuatu being treated as a difficult place to insure after a major disaster. Once that happens, the ripple effects don’t stop at the insurance companies. They hit the banks, the investors, and the workforce.

I’m not writing this to complain. I’m writing it because we need a practical response fast.

There are solutions. They’re not perfect, but they’re workable:

• Banks and regulators can agree on a temporary approach so good loans aren’t thrown into technical default just because insurance isn’t available.
• Property owners can create ring-fenced catastrophe reserve funds (a self-insurance sinking fund) that sit in a trust account and are only used for cyclone, earthquake, fire.
• Bigger institutions like VNPF, banks, and government can look at a pooled national catastrophe fund while the insurance market is in retreat.

Personally, I’m willing to put AUD 50,000 to AUD 100,000 into a ring-fenced sinking fund to protect the bank and show good faith. I know other property owners would do the same, especially if it means they can keep loans stable and keep employing people. However, this was not accepted by my bank. Instead, they have hit me with a penalty even though I have never missed a payment.  Throughout Covid when we had zero visitors, we continued to pay the full interest charge. Our interest has increase by 33.3% and then on the 28th February it goes up by 75% and then the following month by 122.22%. This is an appalling action profiting from a natural disaster. Under CAP 254 the Reserve Bank may act where a bank conducts business “that is detrimental to the public or the economy.”

What we need now is leadership and coordination. This is nationwide. It affects the whole economy. If we sit on it and hope it sorts itself out, it won’t.

Vanuatu has always been resilient. But resilience isn’t just rebuilding after a cyclone. It’s also recognising a threat early — and fixing it before it turns into a crisis.

If you also have an insurance problem drop me a line to [email protected]. It will help to make the authorities aware of the magnitude of the problem.

Paul Vogelsberger is the owner and developer of Nasama Resort in Port Vila. He holds a Bachelor of Commerce from the University of Tasmania and the University of New South Wales.