Dáil Éireann Debate, Tuesday - 3 November 2020
402. Deputy Joe O'Brien asked the Minister for Finance his plans to take measures to ensure that insurance companies offer reasonably priced insurance policies to persons whose homes have been deemed at risk of flooding or coastal erosion (details supplied). [32465/20]
View answerI am conscious of the difficulties that the absence, or the withdrawal, of flood insurance cover can cause to homeowners and businesses.
However, you should be aware that the provision of insurance is a commercial matter for insurance companies, which is based on a proper assessment of the risks they are willing to accept. Consequently, neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products. This position is reinforced by the EU framework for insurance (Solvency II Directive).
Having said that, it is important to note that current Government policy in relation to increasing flood insurance coverage is targeted on the development of a sustainable, planned and risk-based approach to managing flooding problems. To achieve this aim there is a focus on:
- Investing almost €1 billion on flood relief measures over the lifetime of the National Development Plan 2018-2027;
- the implementation of the Office of Public Works (OPW) flood relief management plans; and
- maintaining channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in affected areas.
The above approach is complemented by a Memorandum of Understanding between the OPW and industry representatives Insurance Ireland. This provides for the exchange of data in relation to completed flood defence schemes which should in-turn provide a basis for the increased provision of flood cover in these areas by insurance firms. In this regard, the Insurance Ireland/OPW working group, which my Department attends, meets on a quarterly basis to support this information flow and improve the understanding of issues between both parties.
I acknowledge that while there has been an overall increase in the provision of flood insurance in affected areas between 2015 and 2019, many householders are still experiencing difficulties. This is particularly the case for households in areas with demountable flood defences.
My Department is reviewing the challenges of property insurance and flooding and indeed this is one of the action points for my Department under the Climate Action Plan. Over the last year it launched a public consultation on Climate Change and Insurance and subsequently met with interested parties. The key themes that arose from the consultation related to (i) the lack of data on flood insurance coverage and (ii) the challenges of obtaining flood cover in areas with demountable defences. My Department is now meeting with key stakeholders such as the OPW, Irish Public Bodies, the Central Bank of Ireland and the State Claims Agency to further review the issues raised and assess a feasible way forward. This review is in progress and my Department will continue to provide updates on this work stream to the Climate Action Delivery Board.
Finally, the Deputy should be assured that Minister of State Fleming and I will continue to be proactively engage on all aspects of insurance reform, including flood insurance matter.
