Mr. Lawrence Owens:

I thank the Chairman for the opportunity to address the joint committee. Rather than going through the entire submission in detail, I will summarise some of its aspects. As the Chairman noted, the Cork Business Association, which is a not-for-profit organisation, represents more than 150 members across diverse sectors of business within the city. I will drill down to the association's concern in this regard. The Office of Public Works, OPW, scheme for flood defence for Cork has been identified as a viable flood risk management option in respect of riverine, fluvial and tidal sources in the Lee catchment flood risk management plan. As current estimates of the cost of this work are approximately €50 million to €60 million, it is a significant investment of taxpayers' money in the Cork area to provide flood relief. As a business organisation, the association has visited Fermoy, Clonmel, Waterford and other locations to see the standard and quality of work of the OPW, as well as its effectiveness. Cork is a different situation in that work has not started and the finance value has not yet been set in absolute terms. The projected dates for commencement of the work are 2016 or 2017 and the completion date will be up to 2020 and beyond. Naturally, the expectation among business owners is that once the OPW flood relief scheme is completed, realistic flood insurance cover then will follow. However, the commentary from the representative body for insurance companies, namely, Insurance Ireland, is somewhat different and this is a major concern. In its opinion, based on the plans it has seen for the flood relief scheme in Cork, the proposed work will not reduce the risk of flooding sufficiently to allow the industry to provide flood cover for businesses and householders in Cork city. Consequently, the ongoing difficulties faced by businesses and property owners in Cork city in respect of the lack of flood insurance are set to continue.

Therefore, it begs the question as to what investing in Cork's flood defences will achieve in terms of achieving a reasonable level of insurance cover and what the implications are for similar investment in flood defence schemes nationally.

The announcement in March 2014 of a memorandum of understanding between the OPW and Insurance Ireland allows for the exchange of flood defence data, which we welcome. Rather than any commitment to provide insurance cover, however, is this really the best we can expect from the insurance industry in light of significant State investment? We are very determined on one point, namely, that the Government must ensure that the investment in which the State is included delivers more than just an understanding.

I again stress that this is a national issue, but I am giving the Cork perspective. What does the future hold for our members who cannot currently get flood insurance? What do the next six years hold for our members while the flood defence works are underway, during which there is a very real possibility of being flooded again? The lack of clarity on this issue has massive implications for the future development of the city. How do we in the Cork Business Association encourage businesses affected by the lack of insurance cover to invest in their premises and to upgrade same if they cannot protect them? How do we encourage domestic and foreign inward investment if we cannot guarantee such investment is protected?

It is imperative that homes and businesses in Cork city and nationally can access flood insurance at a reasonable cost without delay. The status quois unsustainable, with many businesses and homeowners exposed to massive risk. We fully understand that insurance is not for inevitable loss. However, being able to transfer risk, which has been done traditionally through insurance, is critical to the economic success of any region as commercial operations simply will not start, develop and thrive without this mechanism. The concept of the premiums of the many paying for the losses of the few is one of the foundation stones of insurance when one considers the advances being made in the UK. For further clarification, I can provide information on the flood relief scheme in the UK. It is not in place just yet, but the insurance industry has taken some degree of ownership and has involved itself in developing a scheme which seems to have some potential. I respect that it will operate within the private sector in terms of domestic, and not commercial, insurance, but the framework has significant logic which could be examined. Essentially, it is a reinsurance scheme with a certain fund. Claims and policies are dealt with as normal, but if there is a fund claim, the insurance company can claim against the fund as a backup.

The nub of the question is the investment that is included for Cork, which is €50 million or €60 million. The soundbites from the insurance industry indicate that it is not good enough. The OPW, which has a superb standard and quality of work and has proved effective, is involved in a one in 100 year flood defence system. Is it the OPW or the insurance industry that decides on the quality of the work? If there is a question to be asked, it needs to be clarified before we invest a significant amount of ratepayers' money in a flood defence scheme and end up without any flood cover. We would then again be in a situation whereby we have a flood defence scheme, but no way to protect businesses and households in the area.