Dáil Éireann Debate, Thursday - 1 February 2024
123. Deputy James O'Connor asked the Minister for Finance if he will investigate the many shortfalls of the insurance sector which has left both homes and businesses in the east Cork area making up the costs of damage following Storm Babet in October 2023; if he will consult the insurance sector on how to improve access for the public to get insurance quotes; and if he will make a statement on the matter. [4567/24]
Amharc ar fhreagraFirstly, I would like to acknowledge the enormous damage caused by the recent flood events as a result of Storm Babet, and the impact it has had on families, communities and businesses, particularly in counties Cork and Waterford. In recognition of this, an allocation of immediate humanitarian assistance was made available by Government to help families, businesses, clubs and voluntary organisations.
More widely, the Government’s current policy in relation to flooding and associated insurance coverage focusses on the development of a sustainable, planned and risk-based approach to dealing with such problems. This has resulted in a high level of flood cover in property policies nationally. This approach is accompanied by committed investment of €1.3 billion to the delivery of flood relief schemes over the lifetime of the National Development Plan to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk.
Specifically, with regard to East Cork, the OPW has already invested c. €80 million in flood defences in the region (Mallow €39.9m & Fermoy €38.4m) and Cork County Council is leading on a further flood relief scheme for Midleton that will protect 250 properties.
This investment is complemented by a Memorandum of Understanding (MoU) between the Office of Public Works (OPW) and industry representatives, Insurance Ireland. In the context of this, Insurance Ireland recently provided information to the Department of Finance on the level of claims and compensation provided by insurers arising from Storm Babet. This indicates that insurance companies have provided a significant level of financial compensation (covering 1,295 claims totalling €52.1m) for damage, comprising commercial, household and motor claims.
Data from both Industry representatives and the Central Bank of Ireland indicate that flood insurance coverage is relatively high, and has indeed increased since 2015. However, it is acknowledged that some households are still experiencing difficulties, particularly in some areas with demountable flood defences. These systems require human intervention in terms of their deployment. This issue is the subject of the MoU working group between the Office of Public Works (OPW) and Insurance Ireland. Officials from the Department of Finance and other stakeholders also engage constructively with this process.
Turning to such recent adverse weather events, I engaged with Insurance Ireland to outline Government’s clear expectation that insurers should deal with affected policyholders fairly and promptly. Furthermore, Minister of State Carroll MacNeill recently met with the CEOs of the major insurers and clearly reiterated this message and the necessity for customers to be treated in accordance with the Central Bank of Ireland’s Consumer Protection Code. Linked to this, the need for insurance providers to take a reasonable approach to the provision of cover where properties are proven to be in areas protected by flood defences was highlighted.
At EU and international level, the Department of Finance continues to monitor the analysis and recommendations of the European Commission, IMF, EIOPA and the OECD regarding climate risk impacts for insurance and the concept of insurance protection gaps. Domestically it continues to work closely with a range of stakeholders, including the Central Bank of Ireland across this policy area, including on the consumer protection aspect.
Finally, please be assured that both Minister of State Carroll MacNeill and I will engage on all aspects of insurance reform, including flood cover issues, and that every effort is being made to encourage a responsive approach from the insurance industry.
