I am conscious of the difficulties that the absence of flood cover can cause to householders. However, the provision of insurance is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and then ensuring that they have adequate provisioning to meet those risks.
Consequently, neither the Government nor the Central Bank can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to any specific individuals. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.
Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of and lower cost for flood insurance. To achieve this aim, there is a focus on:
- prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities,
- development and implementation of plans by the OPW to implement flood relief schemes, and
- improving channels of communication between the OPW and the insurance industry in order to reach a better understanding about the provision of flood cover in marginal areas.
The National Catchment Flood Risk Assessment & Management (CFRAM) Programme entailed a comprehensive assessment of flood risk throughout the country and the development of flood risk management plans for the areas most at risk. Under this Programme, 29 draft Flood Risk Management Plans were published for public consultation with feasible flood prevention measures identified to provide protection to at risk properties in 300 assessed areas. These draft Plans are expected to be finalised in the coming weeks when submissions from the public consultation process have been fully considered. The Government remains committed to funding this programme, as a core element of flood management strategy, over the next several years.
This commitment is underpinned by a significant capital works investment programme with in the region of €250 million spent on flood relief measures over a five year period from 2012 to 2016. The Capital Programme covering the period 2016 to 2021 will see the current annual allocation for flood risk schemes increased from €45 million to €100 million by 2021, representing a total investment of €430 million. These works will be completed on a prioritised basis.
This strategy is also complemented by the Memorandum of Understanding between the OPW and Insurance Ireland, the representative body for insurance companies in Ireland, which provides for the exchange of data in relation to completed flood defence schemes, which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties. A further meeting of this working group is scheduled this month.
The most recent Insurance Ireland survey of approximately 85% of the property insurance market in Ireland indicates that of the 16 completed defence schemes, 90% of policies in areas benefitting from permanent flood defences include flood cover, while there has been an increase from 66% to 77% of policies in areas benefitting from demountable defences including flood cover.
Finally, you should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance.