Dáil Éireann Debate, Tuesday - 19 July 2016
517. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform his progress in ensuring flood insurance cover is available to households in areas where remedial works have been carried out by the Office of Public Works; and if he will make a statement on the matter. [22559/16]
View answer519. Deputy Michael McGrath asked the Minister for Public Expenditure and Reform the status of the transfer of information between the insurance industry and the CFRAM programme; the timeframe on the future implementation of information exchanges; and if he will make a statement on the matter. [22561/16]
View answerI propose to take Questions Nos. 517 and 519 together.
The Office of Public Works (OPW) has no role or function in relation to the oversight or regulation of insurance matters. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks.
In March 2014, a Memorandum of Understanding was signed between Insurance Ireland (II), the representative body for the insurance industry in Ireland, and the Office of Public Works (OPW). This Memorandum sets out principles of how the two organisations will work together to ensure that appropriate and relevant information on completed OPW flood defence schemes is provided to insurers to facilitate, to the greatest extent possible, the availability to the public of insurance against the risk of flooding. II members have committed to take into account all information provided by OPW when assessing exposure to flood risk within these areas.
The Memorandum came into effect on 1 June, 2014 with an initial tranche of data provided by the OPW to II in respect of 12 completed flood defence schemes and showing the design, extent and nature of the protection offered by these works. A further tranche of data was provided to II in January 2015 covering a further 4 completed flood defence schemes. OPW will continue to provide data to II as flood defence schemes are completed.
There are no plans for transfer of information from the Catchment Flood Risk Assessment and Management (CFRAM) programme to the insurance industry. Under this Programme which is being undertaken by engineering consultants on behalf of the Office of Public Works (OPW) working in partnership with the local authorities, detailed draft flood maps have been produced for 300 communities at potentially significant risk from flooding. The insurance sector was informed that the draft flood maps cannot be relied upon to inform insurance premiums, policies or excesses. The maps are now being finalised following completion of a statutory public consultation, and finalised maps are being published together with draft Flood Risk Management Plans. Access to the finalised maps is subject to acknowledgement and acceptance that the maps may not be used for any commercial, business, professional or other income generating activity.
Insurance Ireland estimates that flood cover is included as standard in 98% of household insurance policies throughout the country. II has carried out a number of surveys among its members to ascertain the extent to which flood insurance cover is available in the areas for which OPW has provided data on completed flood defence schemes. The results of the most recent survey were provided in January of this year; they indicate that 83% of property insurance policies in these areas include cover against flood risk. Where the defences are permanent in nature the percentage is 89%; where demountable defences are used the percentage is 78%.
II has pointed out that the effective operation of demountable flood defences requires accurate forecasting systems and methods, flood alert systems and monitoring, efficient mobilisation of equipment, manpower and materials and the timely and correct operation of the demountable defences. It has identified a number of specific risks associated with the operation of demountable defences and has stated that, should a failure occur in the deployment of demountable flood defences, the financial impact for insurers would most likely be very significant. Because of this potential exposure, insurers have limited risk appetite for providing flood insurance in areas protected by demountable defences.
I met recently with Insurance Ireland to stress the need for flood victims to have the best possible chances to be able to obtain insurance cover at reasonable cost. I highlighted that OPW schemes using demountable defences are built to the required standard and to provide robust levels of flood protection to properties. I welcome a commitment given to me by II to assess the risk from the deployment protocols, warning systems and emergency response systems in place. II and OPW will begin work to share information on the performance and deployment procedures of these defences.
The subject of insurance against the risk of flooding is one of the matters which will be addressed in the forthcoming report to Government from the Inter-Departmental Flood Policy Co-Ordination Group. The Group is due to report to me with its recommendations shortly. I will then bring the Group’s report to Government for its consideration as soon as possible.
