I am conscious of the difficulties that the absence of flood insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has been prioritising investment in flood defences over the last number of years.
However, 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 Consequently neither the Government, nor the Central Bank can interfere in the provision or pricing of insurance. This position is reinforced by the EU framework for insurance (Solvency II directive).
The core strategy for addressing areas at risk from flooding is the OPW Catchment Flood Risk Assessment and Management ("CFRAM") Programme which focusses on 300 Areas for Further Assessment identified as being at potentially significant risk of flooding. The proposed feasible measures are outlined in Flood Risk Management Plans which sets out current flood relief schemes, including 118 proposed schemes that can protect a further 11,500 properties.
The Government believes that its existing policy in relation to flooding, which is focused on the development of a sustainable, planned and risk-based approach, is the best way forward. This commitment is underpinned by the OPW and Local Authorities capital investment programme, and complemented by a Memorandum of Understanding between the OPW and Insurance Ireland which provides for the exchange of data in relation to completed flood defence schemes.
This arrangement has led to a greater availability of flood cover in previously higher risk areas. For instance, the Insurance Ireland survey in March 2019 of approximately 87% of the property insurance market in Ireland, indicates that of the completed defence schemes, 95% of policies in areas benefitting from permanent flood defences include flood cover, while 74% of policies in areas benefitting from demountable defences include flood cover. In addition, it should be noted that an Insurance Ireland/OPW working group shares relevant data on completed flood defence schemes and a sub-group has been established to explore the technical arrangements that may allow for the further sharing of data.
In relation to demountable defences my Department is continuing to examine how to increase the level of cover in areas with demountable defences. One of the outcomes of these discussions is that the insurance industry has now acknowledged that they accept that the demountable defences meet the desired ‘1:100 year’ standard. However, while demountable defences are effective when correctly deployed they are dependent on human intervention which increases the risk of failure. This is a difficult and complex issue to resolve but every effort being made to get a more responsive approach from the insurance industry on this matter.