Mr. Enda O'Donovan:

Mr. Chairman and Members of the Oireachtas, we thank you for inviting the Irish National Flood Forum to appear before you to brief you on our issues as home owners and communities affected by flooding.

The Irish National Flood Forum is a voluntary organisation comprising people and communities who have suffered from flooding and are at risk from flooding. In our presentation we will explain the situation as it at present for our members in their homes across the country. We will discuss the question of whether insurance providers in Ireland are acting as a cartel to increase their profits from the Irish market at the expense of Irish citizens and finally we will develop what we expect the elected Oireachtas Members to do for the citizens of Ireland.

We know that people whose homes have been flooded are already suffering in that they cannot get insurance and also that their homes are no longer mortgageable and their value has plummeted. The Chairman of the Revenue Commissioners, Ms Josephine Feehily, has confirmed to the Committee of Public Accounts at its meeting on Thursday, 21 February that flooding will impact on property tax valuations. We hope that the Revenue Commissioners, understanding of this issue will enable the OPW to get further funding to speed up the flood relief programmes across Ireland.

My colleagues will give many instances from Bandon, Cork, Dublin and Skibbereen where insurance providers are treating the public very badly. In a recent press release the Irish Brokers Association, after analysing and collating data from insurers, the Irish Insurance Federation and the Irish Brokers Association's own data from members across the country, has estimated that up to 50,000 households have no flood risk insurance or are at risk of losing flood risk cover across the Twenty-six Counties. The Irish Brokers Association observed the following in regard to the insurance providers, use of geo-coding: "Geo-coding, although handy for insurance companies is not accurate and can leave vast swathes uninsurable, despite no history of flooding in the area". It can also ignore remedial works which have been put in place by the OPW and local authorities rendering their areas far less prone to flooding. Even this committee understands this and is on record stating the practice of geo-coding of areas by insurance companies must be reviewed.

Furthermore, those who have a claim or lose or do not renew their cover will never get cover again under the current regime. The terms imposed by previous insurers must be declared to all future insurers. There must also be a question on the proposal forms which asks: "Are you in an area that has ever flooded or is there a history of flooding in the area or is your house situated within 500 metres of a river?".

While we acknowledge the work of the OPW in flood prevention measures which is by its nature slow, taking up to ten years from inception to completion, we the victims of flooding cannot wait for the OPW. As Dr. Juliana MacLeod, a principal clinical psychologist with the HSE South has stated, "The long-term issues and effects are influenced by both the sense of security (likelihood of an event happening again) and insurance issues. That is how important it is. It is as much a health issue as a financial issue".

It must now be asked if the insurance companies are acting as a cartel. We also ask why the insurance providers in Ireland whose head offices are across Europe and America treat the flooded public in Ireland differently from the public in their home countries. If one has a car crash or one's home burns to the ground, is one excluded from ever having insurance cover ? If one's neighbour has a car crash or a neighbour's home burns to the ground, is one excluded from ever having insurance cover? This is the case with flood insurance cover in Ireland. If one's neighbour has been flooded, no Irish insurance company will provide one with flood cover. A person is forever unable to obtain flood insurance cover. What is more surprising is that the insurance product providers seems to be singing from the same hymn sheet. It is supposed to be a competitive industry but they can all include the same exclusions safe in the knowledge that their competitors will also exclude the same thing. Can one think of any other industry in which every competitor will have a product that has the same exclusion clauses?

There is another reason to believe that all insurance providers are acting as a cartel.

No provider will even quote for home insurance if a person has made a claim in the previous five years. Thus there is no competition in the provision of insurance in Ireland. Can members of the committee think of any other business in Ireland where members of the public, who have mortgages, are required to buy home insurance but must buy that insurance at an inflated premium from a single provider? That is because the provider's so-called competitors refuse even to quote for the business for the next five years. A cartel is an explicit agreement among competing firms to fix prices or production. Cartels usually occur in an industry where there is a small number of sellers. The aim of such collusion is to increase individual members' profits by reducing competition.

We also attach the results of surveys which we have conducted in various locations. An unusual statistic compiled by the Irish Brokers Association, is that the majority of claimants who actually received a payment are usually unhappy with the level of support given by their insurance company. That means that people who have made a claim and received money are still unhappy with the way their insurance provider dealt with them.

Other statistics of note include that even though respondents have spent on average between €3,895 and €6,969 of their own money on flood mitigation measures, not one insurance provider asked about, or took account of, these measures when refusing flood cover. During a flood event, the public comes together to work for hours to protect property, mitigating any possible cost to insurance companies, yet it appears that the insurance companies would prefer if people did nothing.

We are encouraged that this committee understands this issue and has stated the objections. This was after the meeting last September with the insurance industry. I quote:

We have been told of instances where remedial work in terms of building or improved flood defences have been undertaken, and people in those areas still cannot get property insurance. This should not happen.

We find that encouraging. This is not the forum to discuss the aggressive position taken by insurance providers concerning claims. Individual claimants are being forced to employ loss assessors or claims professionals in order to achieve realistic settlements, and then find that 30% to 35% of the agreed sums are being retained.

I wish to talk about what we expect from our elected Oireachtas Members. We ask legislators to help the 50,000 households, comprising approximately 250,000 citizens of this State, who are being bullied by the insurance industry. The industry in this State is acting as a cartel, not by fixing prices but by agreeing to exclude 50,000 homes to increase its profits. We ask members of this committee, as legislators, to show leadership, stand up for constituents and legislate for the insurance industry to abide by certain protocols, or by a certification process to enable households to avail of private home insurance cover which includes flood cover. At present, insurance providers in Ireland do not have to explain why they do not give cover, yet if one's home is mortgaged, one is required to pay for insurance which is weighted because of geo-profiling. We need legislators to insist that if hydrologists calculate that an area has a probability of flood return, then the insurance industry must be obliged to offer flood insurance cover.

For a low-risk area, which is one which has a chance of flooding recurring once in every 150 years or more, we require 100% flood cover. If there is a moderate risk, let us say a chance of flooding recurring once in every 75 to 150 years, then it is on an individual basis. If there is a significant risk of flooding, where there is a chance of flooding recurring more often than once in every 75 years, we can understand the insurance industry's problems. This basic protocol would be transparent and helpful to the insurance industry, the OPW and the public. We do not know where the current 5% Government levy on all insurance policies is going. Prior to the extra 2% being added for the Quinn legacy in January 2013, all policies paid a 3% levy which went straight to the Government for the past 15 years.

We are not asking for the insurance industry to subsidise flood relief works for the OPW, even when it is obvious that the industry would gain if it went into a public private partnership on flood relief schemes. However, we are asking the insurance industry to take responsibility to explain to the public why it has not accepted remedial works completed by the OPW that are helping to resolve flood risk in many areas. We are asking for a proportion of this 5% Government levy be set aside for a flood disaster fund - similar to the proposal of Mr. Brendan Dempsey of the Society of St. Vincent de Paul - for flood victims who want to purchase flood insurance cover but are excluded from doing so. I am providing the committee with a hand-out of a pilot scheme we intend to roll out. It would be a good scheme and we hope the committee will support it.

I wish to introduce my colleagues: Michael Thornhill, Skibbereen Floods Committee, Ms Gillian Powell, Bandon Community Flood Group, Mr. Brendan Dempsey, Cork president of the Society of St. Vincent de Paul, and Ms Seosaimhín Ní Bheaglaoich of the Dodder Community Group. Unfortunately, my colleagues, Mr. Joe Leahy from Clonmel and Mr. Mick Tully, have been unable to attend this meeting.

I thank Mr. Dempsey and his colleagues for their help with this proposal. I thank the committee members for their time and if they have any questions, I hope my colleagues will be able to answer them.