Michael McCarthy (Cork South West, Labour)
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The joint committee will discuss the difficulties in obtaining home insurance for properties in areas that have experienced extreme weather events. I welcome from the Irish Insurance Federation Mr. Kevin Thompson, chief executive officer, and Mr. Michael Horan, non-life insurance manager. I thank the witnesses for their attendance.

By virtue of section 17(2)(l) of the Defamation Act 2009, you are protected by absolute privilege in respect of the evidence you are to give this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise or make charges against any persons or entity by name or in such a way as to make him, her or it identifiable. The opening statement and other documents you have submitted to the committee will be published on the committee website this afternoon. Members are reminded of a long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or any official by name or in such a way as to make him or her identifiable.

The delegation last attended the committee on 25 September 2012. Since then the committee has met several groups in its ongoing consideration of the issues of flooding and its effects across the country. The significant issue of geocoding and insurance cover is causing some distress and discomfort to people. The blanket categorisation of whole areas as being at high risk of flooding has affected people's house insurance premia, as well as their chances of getting cover. The difficulty in getting insurance adds to the psychological burden for those affected by flooding. One can find that a house on a hill near houses which have flooded but which was not affected itself can be categorised as high risk. There is an unfairness in this system and those affected get exercised by it.

There are also home owners who have engaged in remedial works and developed flood defences but these have not improved their insurance premia or even their chances of being able to renew cover. People who may never be affected by flooding are suffering because of claims in other areas. Geocoding seems to be the central culprit in this and I would like to hear the delegation's views on this. I call on Mr. Kevin Thompson.

Mr. Kevin Thompson:

On behalf of the members of the Irish Insurance Federation I welcome the opportunity to address the joint committee on the problem of flooding, with particular reference to household insurance availability in areas that have experienced extreme weather events. The IIF is a representative body for insurance companies in Ireland. Collectively, IIF members write the vast majority of all life and non-life business in the State. In 2012 domestic non-life gross written premiums amounted to €2.4 billion. This figure incorporates motor, property and liability insurance. As the voice of insurance companies in Ireland, the key functions of the IIF include representing members' interests to Government, State agencies, regulatory bodies, public representatives, other national interest groups, the media and the public; representing the position of members at a European level, especially via Insurance Europe, the European association for national insurance company representative bodies; keeping members abreast of relevant policy and regulatory developments and providing a forum for member debate on such issues; and providing information to the Government and the wider policy-making community and the public about insurance.

We have experienced eight major floods in Ireland since 2000. The claims costs of these events stretch from June 2012 to November 2000. In June 2012 the cost was €54 million; in October 2011 it was €127 million; in November 2009 there was a large cost of €244 million; in August 2008 the cost was €96 million; in October 2004 it was €38 million; in November 2002 it was €50 million; in February 2002 it was €37 million; and in November 2000 it was €51 million. The cumulative cost of these eight flood events was €697 million. At the time, the November 2009 floods represented the single largest insured loss ever, at €244 million. However, the new record did not last long because it was closely followed by the December 2009 and January 2010 freeze, which cost €297 million. A further freeze in December 2010 cost €224 million. This provides a further insight into the cost of severe weather events.

The most serious floods have been during the past four years and the claims costs of these events are as follows. In June 2012 there was a cost of €54 million in the Cork region; in October 2011 there was a total cost was €127 million in the Dublin region; in November 2009 there was a cost of €244 million in the Cork and Shannon regions; and in August 2008 there was a cost of €96 million nationwide. These figures can be broken down between household and commercial property. In June 2012 the breakdown of the cost of the flood in Cork was €15 million for household and €38 million for commercial property. In October 2011 the breakdown in flood costs for Dublin was €58 million and €59 million for household and commercial property, respectively. The cost of the November 2009 floods in Cork and the mid-west for household and commercial property was €76 million and €160 million respectively. The worst-hit areas for household claims in the November 2009 floods were as follows: Cork, €21 million; Galway, €16 million; Clare, €9 million; and Dublin, €5 million. The worst-hit areas for commercial property claims following the November 2009 floods were Cork, Roscommon, Galway and Clare with costs totalling €119 million, €8 million, €8 million and €7 million, respectively. The response of insurers after all of these flood events was to provide 24-hour helplines, alternative accommodation and emergency funds where necessary. It was necessary to dry, clean, repair and restore properties. This process can take some months, particularly due to the time it takes properties to dry out.

The IFF's role as a representative body in the area of flooding is to collect statistical information, provide advice and comment to the media, the Government, politicians and the public and liaise with the OPW. The problems we see in the area of flooding include those of climate change, a legacy of poor planning decisions, under-investment in flood defences, under-resourcing, a lengthy planning process even for small flood defence projects, and the fact that too many agencies are involved in flood risk management.

Whatever side one takes in the climate change debate, there is no disputing the fact that in the past decade insurers have seen more frequent and costly weather-related losses not only in Ireland but globally. The fact that we have had so many of the largest ever weather-related losses in such close succession has put significant pressure on the property insurance market. However, insurers have repeatedly displayed their resilience and have protected people against financial loss. Unfortunately, one legacy of the building boom was that many houses were built on flood plains due to bad planning decisions. This reinforces the importance of taking flood risk into account when zoning and planning. The Government capital budget for flood risk management averaged €37 million per annum between 2005 and 2011. Capital spend on flood risk management averaged €27 million per annum over the same period. To put this in context, the claims cost of the last four major floods totalled €520 million.

Flood insurance is widely available in Ireland and we estimate a high penetration rate of approximately 98%. It is a standard peril in household insurance policies. All policyholders pay a contribution and low-risk areas subsidise high-risk areas. The household insurance market is competitive, with 12 insurers operating from offices in Ireland and others without an Irish office also offering insurance under EU Single Market rules. When assessing risk, insurers analyse the claims history of a property and flood prevention measures implemented by the OPW or local authority. Some people pay a higher premium or have a higher flood excess because the flood risk is higher. Exclusion of cover is a last resort. Insurance offers protection against a risk but not against a certainty. It is not tenable to ask policyholders in general to absorb the cost of losses, nor is it sustainable from an insurance business model perspective. Insurers spread risk throughout the world through the mechanism of reinsurance. Therefore, it is vital that insurers act prudently with regard to flooding risks to ensure that affordable reinsurance cover is maintained for all policyholders.

Among the goals of the IIF are to preserve as far as possible the widespread availability and affordability of insurance and to act as a partner with the Government, and especially the OPW, to achieve this end. The elements necessary for the sustainable provision of insurance are availability of flood mapping and accurate data to facilitate risk assessment, high penetration levels to prevent adverse selection, continued availability of reinsurance, investment by the Government in structural and non-structural measures, and the addressing of deficiencies in planning guidelines. Insurers need maps in GIS format showing likely flooding extent and benefit area maps showing the likely extent of protection offered by remedial works. They also need to know the status of remedial works, such as those deemed to be priorities, in progress, etc. They need to know the design standards to which flood defences are constructed; the minimum standard is a return period of one per 100 years.

The Irish Insurance Federation and the Office of Public Works have a common interest in ensuring that information on the completed flood defences is provided to insurers. Following our previous discussion with the committee the IIF invited the OPW to join a working group to accelerate the provision of flood defence information to insurers. The working group commenced its work in January 2013 and meets monthly. The objective of the working group is for the IIF and the OPW to work together on the provision of OPW information on completed flood defences in line with the IIF's requirements in order that household insurers can take this information into account when assessing risk in respect of private dwellings. The scope of the work of the group is to establish areas for which flood defence information will be provided, establish the format in which the information will be supplied, agree a delivery date for sets of completed flood defences and agree on how frequently the information will be updated. The Irish Insurance Federation believes that the 2009 planning guidelines are deficient and too complex. The future availability and affordability of flood insurance were not considered at the preparation stage. The guidelines are only advisory in nature and planning authorities are not obliged to follow them.

We believe there needs to be a focus on impact mitigation. A flood risk management plan is needed for all high-risk areas. All flood resources should be considered. Flood risk management plans need to be properly funded and resourced. We should also stop creating new flood risks. Insurers are major stakeholders. Insurers want to continue to offer affordable insurance to as many people as possible. Minimising the financial impact of the cost of floods is critical and we appreciate the engagement on the part of Minister of State at the Department of Finance, Deputy Brian Hayes, and the Office of Public Works in this regard. I would be glad to elaborate on any aspect of this presentation on which members have questions.

Billy Kelleher (Cork North Central, Fianna Fail)
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I thank the Chairman for allowing me to contribute. I represent the constituency of Cork North-Central. It covers the north side of the city and includes a large hinterland around the periphery of the city as well as the city centre. We have been devastated on several occasions and it is nothing new to the psychology of people in Cork city to have normal flooding or tidal flooding, which may come with a south-easterly. However, in November 2009 we had extensive flooding in the city. At the time I called for an independent investigation into the cause of the flooding and the contributory factors. At the time I held major concerns, along with other Deputies in Cork, about the behaviour of the ESB.

That issue has not been adequately addressed and investigated and no final conclusion has been reached. I do not expect the delegates from the Irish Insurance Federation, IIF, to comment on who was liable for the flooding, but I have grave concerns about the behaviour of the ESB on that fateful night. Only for the grace of God, nobody was drowned, but huge damage was done to property and people's lives. In the context of that flooding and other floods, does the IIF or its members ever consider taking actions against people who may have been responsible for or contributed to a flooding or does it just always pass the costs on to policyholders in general? I am concerned that the easy option in such circumstances, rather than take an action against those who may be culpable or negligent in addressing issues that allow certain areas to be flooded, is to hike up premiums throughout the country and ask the householder to pay.

In the context of the 2009 flooding, did the IIF or any of its members look at any State agency or the ESB with regard to whether they were either culpable or liable in any way or did they just decide to pay out and recoup the moneys from policyholders over a period of time? I am very concerned about this particular aspect of the 2009 flooding and I believe this committee has a fundamental role to play in ensuring some finality is brought to this issue. The ESB and others should be brought before the committee and held to account, as we tried to do previously without success.

On the issue of geocoding, in June 2011 Glanmire was flooded extensively as a result of an act of God, in the context of the amount of rain that fell. However, we are now getting evidence from constituents living in Glanmire and elsewhere whose properties were extensively flooded on that fateful night that they cannot get insurance because of geocoding. Glanmire and certain areas near the Glashaboy River have been highlighted as a high risk category. Therefore, when people from these areas apply for insurance or a quote, they are refused because of the geocoding system in use. Is that what is happening? I have had contact from people who live on the top of a hill in that area and the only way they would be affected by flooding would be if they were at sea level. Their house would certainly not be flooded. This situation must be examined.

Insurers are asking fewer people to carry a higher burden, but the theory behind insurance is to spread risk among a greater number of people. We now have situations in areas like Glanmire, which I accept are prone to flooding, where obtaining insurance is difficult. Some of these places had never been flooded previously until June 2011. Why are we allowing this to happen? Is there any appeals mechanism in place so that a person refused insurance by a number of insurers can get insurance? Can they approach the Irish Insurance Federation or to whom should they go to appeal a decision to refuse insurance or to at least be offered a quote?

I also want clarity on the issue of the value of a house whose owner is unable to acquire insurance for it. Effectively such a house is worthless, because the only person who could buy the house would be a cash buyer due to the fact that if the buyer applied for a mortgage, he or she would be obliged to obtain insurance. Most solicitors would advise a person not to purchase if insurance could not be obtained. The banks certainly would not release money for a mortgage for a house that could not be insured. This needs to be addressed. Hundreds of people in the Cork Harbour basin area, particularly the marsh area, will find it exceptionally difficult to dispose of their houses because new purchasers will be unable to get full protection and therefore will not be able to get a mortgage or buy the house.

In the context of local authorities, we have heard of cases where the authorities do not keep drains cleared, maintain flood defences or have proper alert systems in place. In view of the amount paid out by insurance companies, almost €500 million in the extensive flooding between November 2000 and June 2012 - my apologies for saying earlier the Glanmire flooding was in 2011, it was 2012 - how closely does the Irish Insurance Federation work with or monitor local authorities to ensure they carry out their obligations with regard to the maintenance of flood defences? It has been mentioned that some of the floods caused recently were due to the lack of maintenance of grilles and culverts. Does the federation do anything to ensure local authorities carry out their obligations in those areas?

The Irish Insurance Federation needs to carry out a review to ensure that people are at least given a quote from insurance companies in areas of high flood risk. I accept people may have to pay a premium, but the logic of insurance is that it carries those that have a high risk by spreading the load among those that have a low or no risk.

Mr. Kevin Thompson:

I will respond to some of those questions and will hand over to Mr. Horan to deal with the technicalities of geocoding. With regard to the potential increase in insurance premiums, our view is that the marketplace is quite competitive in terms of the 12 general providers in the market, not including foreign insurers which, under freedom of services, underwrite business here also. Premiums have decreased in the past 12 months by 4%. I believe insurers are acting prudently and fairly in terms of the application of premium rates across the marketplace.

In response to whether we take action against establishments such as the ESB, the federation has no knowledge of any of its members taking action against such parties. This would be the decision of each insurer to do that, but I believe they would not see it as their role to take legal action against such organisations. In respect of local authority maintenance of flood defences and clearing of drains, we would refer to the committee's previous report in July 2010 where such recommendations were made. I am aware membership of the committee has changed since then. As a representative body, the federation would urge that follow-up action be taken on the recommendations of the previous committee. One of the recommendations concerned ensuring drains and so forth were kept clear and that local authorities were followed up on in respect of their responsibilities in this area.

Our engagement on insurance of flooded areas has been with the Office of Public Works since January and it is the main conduit for us in understanding what remedial action has taken place, the standard of the action and considering whether that work can be incorporated into underwriting criteria within insurance companies to provide people in those affected areas. I agree the principle of insurance is based on spreading risk within a risk pool. However, there is a difference between insuring a certainty versus a might be and this must be taken into account.

In respect of geocoding, Mr. Horan our non-life insurance manager is probably best placed to comment on that.

Mr. Michael Horan:

Household insurance is a mass market product and insurance companies make their individual underwriting decisions on the basis of the information available to them, and geographical location is an important rating factor. Insurance companies use their own claims experience, secondary data and flood models, etc. The geodirectory gives exact geocodes for each building and pinpoints the property. Without geocoding, risks would be assessed on a blanket basis. It would be assumed that all properties within a geographical area are at equal risk of a flood.

In simple terms, geocoding enables insurers to see that, for example, one side of a street is within a flood hazard area and the other side is not. Rather than excluding all areas in a blanket manner, geocoding depicts graphically what buildings are within a flood hazard area and what buildings are not.

Billy Kelleher (Cork North Central, Fianna Fail)
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Does geocoding take account of elevation and altitude?

Mr. Michael Horan:

Insurance companies cannot physically survey every house when they are making their underwriting decisions. It is not feasible because of the number of houses that are insured. When we attended a meeting of this committee in September of last year, we were asked how a person in one of these areas can get out of it. We are working with the OPW through our flood working group. We are getting information from the OPW on digital files that show the areas which are protected by flood defences. Historically, insurance companies have not had that information when they examine at-risk areas. The new data coming from the OPW will enable them to amend their lists of at-risk areas to take account of flood defences that have been built.

The Deputy asked about elevation. I guess it is possible for somebody's house to be within a particular area but at a more elevated height. We recommend that a person in such circumstances should make representations to the insurance company, drawing its attention to the fact that the house is in an elevated position. He or she also has the option of using the Irish Insurance Federation's information service, which can liaise with the insurance company and bring its attention to the salient facts.

Jerry Buttimer (Cork South Central, Fine Gael)
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I welcome Mr. Horan and Mr. Thompson to this afternoon's meeting. Like Deputy Kelleher, I would like to impress on the joint committee the importance of reaching finality with regard to the Cork flooding of November 2009. As the first person to call for an independent investigation into that episode, I hold firm to the view that we have yet to get proper answers. Why has the federation not asked its members to go after the ESB? Like Deputy Kelleher, I have a view on that aspect of the matter. I am worried that an incident similar to the flooding that happened in the Middle Parish area of Cork could happen again. We have not yet received adequate answers from the ESB regarding its role in that event. I am aware that representatives of the ESB appeared before a committee in the previous Dáil. Some questions have yet to be answered. Why have they not been challenged on this matter by the insurance companies?

I was amused to hear the witnesses say that insurance has decreased by 4%. I would like to see real evidence of that. It is news to my ears. While I welcome what was said about affordable insurance, I do not see evidence of it in the cases of people in Cork who have suffered as a consequence of flooding. The gargantuan premium increases have been unacceptable. The people whose houses have been flooded are being asked to foot the bill. There has been no engagement with the ESB or the county councils. In the case of last summer's flooding in the Douglas area of Cork, it is clear that there was an issue with a grille. Perhaps I am speaking in a vacuum in that case because a report on it has not yet been published. There does not seem to be a link between the local authorities and the Irish Insurance Federation. It was mentioned that the federation did not start engaging with the OPW until January of this year. It does not make sense that it did not start before now.

We need more than negotiation. Surely there is an obligation on the insurers and those representing the insurers to talk to the county councils, the Minister for the Environment, Community and Local Government and the OPW regarding the clearing of drains and the operation of flood defence measures. It seems to me that the innocent victim is not recognised in all of this. I agree with what the witnesses said about some of the stuff that has been built on flood plains, but we cannot blame the home owner or the business person who bought a home or a business in such an area. They were merely trying to buy a home or a business. During the planning application process, did the members of the federation inform the local authority that these developments should not be allowed to go ahead because they were on flood plains? As a public representative, the system seems to be weighed against the home owner or the business person.

I would like to speak briefly about geo-coding. I have an office on Glasheen Road near University College Cork. I accept that the witnesses are probably not familiar with the area. I am 46 years of age and I have never seen a flood in the area. Letters have been sent to local residents telling them their houses are on flood plains. I do not buy that argument. I have never seen water lodge anywhere along the road. It is quite elevated. Similarly, people in the Bishopstown area of Cork, where I live, are being refused insurance or being given gargantuan insurance quotes because of subsidence. I appreciate that subsidence is not on today's agenda. Many people have been told to shop around, which is fine. People in their 70s might not have the computer skills to do so online. If they try to shop around by telephone, they are told to press line 2 or line 3 before they get to talk to an agent. People living in areas like Uam Var, Benvoirlich, The Rise and Curraheen Road have been told their quotes will be increased, or have not been given any quotes at all, because they live in high subsidence areas.

Deputy Kelleher was right when he suggested that a person's house is worthless if it is not insured. I do not know how we have arrived at a "one size fits all" situation with regard to subsidence. People who got their houses fixed, if I can use that term, and have not made any claims for the last 25 or 30 years are still being told they will not be given any quote unless they pay a certain cost. We should not victimise the person whose property has been flooded. I accept there might have to be an increased premium level if it is an ongoing issue. Do the insurers think they have treated the people of the Middle Parish and the people of Glanmire fairly? I honestly do not think fairness has been exhibited in some cases. I have seen evidence of this. Premiums have gone through the roof, people have been refused cover and claims have been questioned. I accept that insurers have a role in questioning claims. I will conclude by saying I hope we do not go down the road of saying to people that they cannot get insurance as a result of the only flood to have taken place in their area in the last 50 or 100 years. I thank the witnesses.

Mr. Kevin Thompson:

The federation and its members have the utmost sympathy for people who have been affected by floods, particularly in the Cork region. I think that is a given. There has been a 4% reduction in insurance premiums. That is an average across the marketplace. I accept that certain policy holders will have experienced premium increases because of the risks that have presented.

Jerry Buttimer (Cork South Central, Fine Gael)
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My insurance has gone up even though I have never had a flood. I apologise for interrupting.

Mr. Kevin Thompson:

That is fine.

Kevin Humphreys (Dublin South East, Labour)
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Does the average mentioned by Mr. Thompson include car insurance or is it confined to household insurance?

Mr. Kevin Thompson:

It is confined to household insurance.

Jerry Buttimer (Cork South Central, Fine Gael)
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Is Mr. Thompson saying the insurance costs of a person who is not in a flood plain or subsidence area and has never made a claim have decreased by 4%?

Mr. Kevin Thompson:

Yes. That is what has happened on average across the marketplace, according to the latest statistics we have.

Jerry Buttimer (Cork South Central, Fine Gael)
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Okay.

Mr. Kevin Thompson:

I will respond to the question that was asked about the ESB. The federation has not taken any specific action. I am not aware of any specific action having been taken by any of our members. It is debatable whether the role of an insurance company should be to take action, or whether other appropriate authorities should fulfil that role. We are insurance providers. We are here to assess risk and to try to provide coverage where we can.

Mr. Horan is probably the best person to deal with the issue of subsidence, which has different criteria.

Jerry Buttimer (Cork South Central, Fine Gael)
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I accept that.

Mr. Michael Horan:

The issue with subsidence, particularly in Cork city, where it has been a long-standing problem, is that it is due to the effect of naturally occurring water and leakage from the underground pipes on the limestone, which is characteristic of the area. The problem is exacerbated by the fact the underground pipes are made of clay and are susceptible to cracking when development takes place. This results in underground erosion, which causes downward movement of the ground supporting the existing properties. As I said, there is a particular problem in this regard in Cork.

In terms of remedial measures, with flooding, a flood defence can be put in that will protect a whole area, whereas with subsidence, the remedial measure is specific to the individual house. What needs to be done in general is to remove the cause of the damage, ideally, and then monitor for a period to make sure the movement of the property has stopped. Then, when one is sure the property has stabilised, underpinning work is carried out. Where subsidence has happened and underpinning work has been done, individual insurers would generally look favourably on this. As to whether the overall cause in Cork city can be removed, one of the issues there is the fact these clay pipes are cracking. In terms of removing the cause, I would have thought it would be a case of the local authority replacing the pipes, but I am not aware it has any plans to do that.

Jerry Buttimer (Cork South Central, Fine Gael)
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Is it a fact the cost of insurance goes up, even where people have never claimed in 30 years or more?

Mr. Michael Horan:

Insurance is about covering against the risk of something happening. There are one or two very small subsidence blackspots in the country. Subsidence is a standard part of the household insurance policy for the vast majority of household insurance policyholders. Unfortunately, there is this blackspot in Cork where the likelihood of subsidence is so great as to be tantamount to inevitability. Insurance cannot cover people against an inevitable event because the cost of premia would skyrocket for everybody.

Kevin Humphreys (Dublin South East, Labour)
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I welcome the witnesses and will begin with a positive point, namely, the working group has started to do its work. One of the points I made very strongly the last time this arose in the committee was the need for co-operation across Departments, the OPW and city councils in order to exchange data. The first question I would have is in regard to this point. At what stage is that process of co-operation? Is it just at the stage of exchanging data and when will we see concrete results from this co-operation?

Mr. Kevin Thompson:

It is fair to say we are at the early stages. Our first meeting was in the middle of January, we had a meeting in February and another meeting last week. The idea is to keep these monthly meetings going. We need to fully understand the technical data as presented to us by the OPW. That is the current position. It is an effort to get these technical data into a format that both parties can understand.

To be clear, we have not got all the data on every piece of work the OPW has carried out. We started with certain pieces of work and it is a matter of working through, the idea being that once we fully understand this, we will try to incorporate it into our members' underwriting criteria.

Kevin Humphreys (Dublin South East, Labour)
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It could be another year before we see concrete outcomes from this.

Mr. Kevin Thompson:

I cannot say it will be a year or six months as it is too soon to say. However, from our point of view, we welcome the engagement with the OPW, which has gone very well over the past three months. We see it as a positive and we are trying to push this along in terms of monthly meetings to try to get a result as quickly as we can.

Kevin Humphreys (Dublin South East, Labour)
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Would it be fair to call the Irish Insurance Federation a lobby group on behalf of the insurance companies? It has no regulation or code of practice for its members.

Mr. Kevin Thompson:

I would think we are a representative body for our members. We do provide other services to our members such as a statistical information service and we have a shared services centre within our organisation. We also provide an insurance information service to the public. Where a member of the public needs to understand an issue with a policy, we act as a meditator between that member of the public and our members.

Kevin Humphreys (Dublin South East, Labour)
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It would be fair to call the Irish Insurance Federation a lobby group on behalf of its members. One of its roles is-----

Mr. Kevin Thompson:

We look to represent our members' interests, yes.

Kevin Humphreys (Dublin South East, Labour)
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The witnesses gave us a figure for flood defence over the 12 years of approximately €697 million. Will Mr. Thompson give us an idea of the profit margins the Irish Insurance Federation's members have had over the past 20 years? This is really a case of spreading risk over a period of time and the insurers are always going to make some payments out. How does that work equate with the amount of money taken in?

Mr. Kevin Thompson:

That is a fair question. The only figures I have to hand at present relate to 2008, 2009 and 2010, and we are currently finalising the figures for 2011. In 2008, the industry suffered a loss of €161 million, in 2009 it suffered a further loss of €172 million and in 2010 the position marginally improved and it suffered a loss of €63 million. That is the information I have to hand.

Kevin Humphreys (Dublin South East, Labour)
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This is a question of risk over a long period of time, and that is really where we should be looking at the figures.

Mr. Kevin Thompson:

I agree. If one extends the period of time, one may get a more even result, but even to take that three-year period, there is a cumulative loss of €396 million. If we roll that forward to the next three years, 2011-13, it could be argued that for insurers to get to a break-even situation, that money has to be made back.

Kevin Humphreys (Dublin South East, Labour)
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That is why I am suggesting it would be normal to look at this over a 20-year period.

Mr. Kevin Thompson:

I do not have those figures to hand at the moment.

Kevin Humphreys (Dublin South East, Labour)
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It is not fair, then, just to say it paid out €697 million over the past 12 years. We would have to look at the profit margins over the past 12 years. Mr. Thompson is giving us a figure as to what the industry paid out on flood defence over the past 12 years but he is not able to give us the figure of the profit margins in all the insurance companies that are active in the Irish market over the previous 12 years. Is that fair enough?

Mr. Kevin Thompson:

What we have to hand is the losses which we have paid out in terms of flooding over that period. There would be other claims in other lines of business which we would have paid out. The aggregate figures I have given are the losses for the industry as a whole.

Kevin Humphreys (Dublin South East, Labour)
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Over a longer period, the insurance industry has been profitable.

Mr. Kevin Thompson:

I am just saying-----

Kevin Humphreys (Dublin South East, Labour)
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It is a fair comment, is it not?

Mr. Kevin Thompson:

I cannot comment on whether it is or not. All I have is the figures to hand for the last three years. We can report back to the committee in terms of-----

Kevin Humphreys (Dublin South East, Labour)
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I would appreciate that. By and large, insurance companies over a long period of time are profitable. It is not fair to look at one figure of a payout on flood defence without looking at the overall figures. That is the point I am making. Is that fair enough?

Mr. Kevin Thompson:

I take the point. The point we were also trying to reflect is the payments which the industry has made in respect of floods which have happened and to correlate that against spending on flood defences. When we stack one up against the other, there is definitely a disconnect.

Kevin Humphreys (Dublin South East, Labour)
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That is fine, but we also have to put in the third figure, which is the income of the insurance companies over that period. There are the costs of flood defence payments by the insurers and the costs paid by the OPW on flood defences over the 12 years but, in the other margin, is the insurers' income. To look at €697 million in isolation is probably the wrong manner for this committee to do it. It would be good if the Irish Insurance Federation could provide the profit margins of its members over those 12 years.

Mr. Kevin Thompson:

We can definitely provide that figure.

Kevin Humphreys (Dublin South East, Labour)
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If I can go back to the point the Chairman made at the start of the meeting, we have had other people before the committee referring to the insurance companies in Ireland operating as a cartel. I would have some concerns, given the examples they provided to us, and perhaps the witnesses could clarify those for the committee.

The first example given to us was of the person who gets a refusal from one insurance company and must notify that refusal to every other company. A person who gets a letter stating that renewal costs €300 may telephone around to get a cheaper quotation but if any of the insurance companies say "No" because the house is located on a flood plain, or for whatever reason, that person must then report the refusal to the first insurer, whereupon the premium skyrockets. That situation was mentioned.

Another element raised was that a person who has made an insurance claim cannot move to another insurance company for five years, even though he or she may have been 20 or 30 years with the company. There is also an element of price-fixing for specific areas, a pattern that becomes very clear when people telephone around to ask about prices. There is the spread of risk, which I heard mentioned on one occasion, meaning the allocation of customers within a risk area. Are the delegates aware of anybody operating in that manner?

Michael McCarthy (Cork South West, Labour)
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We have had witnesses speaking on this topic in recent weeks who reported very clear allegations and concerns. Last week clear allegations were made that some operators in the industry were operating as a cartel. Another aspect of that allegation was that some companies might exclude cover in an area, in the full knowledge their competitors might be doing the same, the result being a cartel. That view was expressed in great detail by a number of people in different areas who had been affected. As well as answering Deputy Humphreys's question, how would the witnesses respond to that specific allegation?

Mr. Kevin Thompson:

I have no knowledge of our members acting as a cartel. Within the actual federation, we have anti-competition guidelines, or a code of conduct, so when our members meet in a forum this is a guideline they must follow strictly.

Michael McCarthy (Cork South West, Labour)
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Who enforces that code of conduct?

Mr. Kevin Thompson:

We enforce it ourselves, within our membership. When our members sit around a table we have to be very careful that they do not enter any area of the anti-competitive remit.

Kevin Humphreys (Dublin South East, Labour)
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Has enforcement of the code of conduct ever had to be used on a company?

Mr. Kevin Thompson:

Not that I am aware of. Our code of conduct exists and all our members have it. Recently we revisited and updated it to ensure all our members are aware of it. It would be a standard aspect of compliance that we operate within the federation.

Kevin Humphreys (Dublin South East, Labour)
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In his presentation Mr. Thompson stated there is a high penetration of cover for flood risk. The Irish Brokers Association gives a figure of some 50,000 houses that cannot achieve flood insurance. Does that tie in with the statistics Mr. Thompson gave us today?

Mr. Michael Horan:

I am not sure how the figure of 50,000 was arrived at but at our end we think the 98% penetration rate is accurate, and is far higher than what exists in other European countries. Flood cover is a standard part of the package a customer gets in a household insurance policy in this country.

Kevin Humphreys (Dublin South East, Labour)
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I do not know how the association arrived at that figure but from the telephone calls received and the surveys I have carried out, I see a very large number of people who cannot get insurance for flood cover. This means they cannot sell their home or purchase the one they want to because they cannot get a mortgage for it. Judging by the calls we get, the figure of 98% does not seem realistic. The figure from the Irish Brokers Association is probably much more realistic. From what period was the figure of 98% taken?

Mr. Michael Horan:

It was taken some 12 months ago, from interface with our insurance company members and from our understanding of the level of flood risk cover that exists. The purpose of our engagement with the OPW in the flood working group is to try to improve that penetration rate even further. As I said, insurance companies are not aware of the flood defence information available to the OPW, nor of the standards to which those defences have been built. That is the main issue. We are trying to get past all the previous debates we have had, which go back and forth after every flood that occurs and in which a lot of mudslinging goes on, on all sides. We are trying to get past that to make concrete, practical progress within the flood working group.

Kevin Humphreys (Dublin South East, Labour)
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The committee is also trying to make concrete proposals on how to make this happen. I refer again to the 98% figure. Was that figure taken before geocoding was in wide operation? Other Deputies and Senators will have received the same telephone calls. A person will report being with the same company for the past ten years but then being told it will not give flood cover. That would be the normal telephone call we would receive in the office on a daily basis. Was the 98% figure taken prior to the companies operating geocoding, or has geocoding been rolled out?

Mr. Michael Horan:

The only thing I would say in response is that the insurance industry is not one monolithic organisation. It is individual insurance companies competing against each other for business. I am not privy to how each company makes its underwriting decisions. Some companies are probably more technologically advanced than others. From the Irish Insurance Federation's point of view, I am interested in the overall penetration rate. We believe the rate in Ireland for flood insurance is far higher than in most other European countries. In some countries the penetration rate for flooding is as low as 20%.

Kevin Humphreys (Dublin South East, Labour)
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Mr. Horan is saying he is not sure whether geocoding was taken into consideration when the figure of 98% was produced. We could be looking at a new phenomenon in people being refused flood cover.

Mr. Michael Horan:

I still believe the penetration rate is of the order of 98%, if one takes the country as a whole. The Deputy is focusing on his constituency, where there are particular problems-----

Kevin Humphreys (Dublin South East, Labour)
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I knew Mr. Horan would say that. I wish I was, but the telephone calls do not come only from my constituency. There was an earlier question Mr. Horan did not answer. I asked about the specific example of a person who seeks a quote and receives a refusal. If he or she does not declare the refusal to the next company tried how does that affect the policy?

Mr. Michael Horan:

People shop around all the time by telephone and over the Internet - it is very common. If one is just shopping around on different websites obviously one will be knocked back by some companies or on some websites. Those are not refusals in the terms one would ordinarily understand as a refusal. That is a regular thing that happens every day and people should not be worried about it.

Kevin Humphreys (Dublin South East, Labour)
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One example was given to the committee last week. Insurance company X sends a renewal notice. The person prices this against other companies and gets knocked back or refused for flood insurance by other companies. He or she must then go back to the first company, declare that refusal and is then refused flood cover. Is that acceptable practice?

Mr. Michael Horan:

If people are encountering individual problems like that we have an information service that will deal with complaints and queries from members of the public. We are happy to look into individual cases of that kind. In regard to talk of cartels, etc., we would refute that allegation in the strongest possible terms because the Irish household insurance market is very competitive. As we noted in our presentation there are at least 12 insurance companies offering household insurance cover, with many others writing into Ireland under EU Single Market rules. The market is very competitive and there is a huge range in quotation prices for a person looking for same. People bandy around allegations about cartels but nothing could be further from the truth.

Kevin Humphreys (Dublin South East, Labour)
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Perhaps Mr. Horan might come back on that point because it was mentioned specifically. He stated that people could make representations to the IIF if they were refused insurance cover. Will he explain the clear path of appeal to the IIF in these circumstances? How do people apply? What is the success rate for appeals?

Mr. Michael Horan:

Which appeals?

Kevin Humphreys (Dublin South East, Labour)
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I refer to representations to institutions. For example, a person who cannot get household flood cover insurance could make representations to the IIF. I ask how this is done and whether there is a clear appeals process in place. What is the success rate and the number of appeals received by the federation?

Mr. Michael Horan:

The federation has a working group which co-operates with the OPW. It is hoped that this will result in a clear picture of the flood defences in place in the areas protected by those flood defences. This will enable us to increase the penetration rate in the country. People who have a problem with flood insurance will be able to contact our information service-----

Kevin Humphreys (Dublin South East, Labour)
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The question was not answered. I wrote down what Mr. Horan said. He said that one could make representations to the federation. I asked how this could be done and how many people had done so. What is the success rate for those representations?

Mr. Kevin Thompson:

We have an insurance information services line which deals with all sorts of queries, such as the availability of cover or questions regarding claims which may have been accepted or rejected. We also receive letters from policyholders thanking us for intervening on their behalf or thanking the insurers for paying the claims. We cover motor insurance, household insurance and other lines of business. On average the federation receives approximately 2,000 calls. Our rate of successful mediation is approximately 60% to date. I am unable to provide a breakdown with regard to successes in motor or house insurance, but the general success rate is about 60%.

Caít Keane (Fine Gael)
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I thank the witnesses for their attendance. This discussion seems to be going around in circles. The use of computer technology has enabled much new information to be provided on existing flood plains and proposed flood plain management. Many of the county councils are doing magnificent work. I was a member of South Dublin County Council. The SEAFRAME study is available for consultation, as are the studies being conducted with reference to SEAFRAME. Computer imaging studies have been carried out on rivers. I will only speak with reference to the south Dublin area because it is the area I know best. South Dublin County Council did a computer study of the River Dodder under the auspices of the OPW and the Minister of State, Deputy Brian Hayes. However, the insurance companies are still working as if they were back in the Dark Ages. I acknowledge that the computer studies from around the country have not been collated.

Aerial surveys have been conducted. I refer to the LiDAR study of rivers carried out in south Dublin, which was commissioned by the OPW under the Minister of State, Deputy Brian Hayes. Elevation levels were investigated in the LiDAR aerial survey and a digital terrain model is available in South Dublin County Council. This is not rocket science. It is hoped all this information will be collated. RPS Consultants are working with the OPW and with county councils to collate information. Is it the case that the Irish Insurance Federation has not been consulted about this new information or is not aware of it?

The best way to make a point is to speak about something with which one is familiar. I live near the Dodder but I will not use that river as an example. When I was on the council in 2000 a huge body of work was carried out by South Dublin County Council, including a flood alleviation plan for estates in Lucan which had suffered flooding. That area is now free of flood risk. The senior engineer in South Dublin County Council provided the residents of those estates in Lucan with letters stating that this work had been carried out. This was because they were being refused insurance. There has been no flooding since the work was carried out; nor is there any prospect of flooding. The witness has stated that he has no knowledge of a cartel. Why can the people in those estates not get insurance? The letter received by residents was for the attention of insurance companies. The engineer was prepared to put his name on the line in signing that letter. I ask why the residents are unable to get insurance.

I refer to the regulations and code of practice for the insurance industry. How is the code policed? What knowledge, if any, is garnered from this policing? Other speakers referred to geocoding, so I will not speak about it. The county councils have very little money but they do the work when they have the money. This should be acknowledged by the insurance companies. It seems the situation is worse now even though more information is available to insurance companies than was the case four or five years ago.

On the question of claims and who is or is not making money, I refer to the figures provided by the delegates. I got the impression from figures provided by others that the insurance companies were cleaning up. I ask the committee to undertake research on the figures coming from both sides to determine the actual figures.

What percentage of insurance companies are members of the federation? I spent 20 years as a councillor. The GIS mapping system and computer technology supply information on roads and rivers. One does not have to be Mohammed to guess where flooding is likely to occur, because the information is available. The insurance companies should know this also. I acknowledge that it was wrong to allow building on flood plains and I hope this will never happen again. In my view, the cost of insurance should be coming down instead of going up; it should be more freely available.

Mr. Kevin Thompson:

The Senator's contribution has covered a lot of issues. I reiterate that our members do not act as a cartel. There is no evidence to suggest this. I refer to the earlier comment by my colleague. There are 12 domestic insurance providers in the marketplace, and also providers based outside this jurisdiction that passport in to sell their products. There is no evidence whatsoever of a cartel. Our members do not engage in cartel activity. We do have a code on anti-competitive behaviour, of which we remind our members.

The minutes of all our meetings are published and available for people to read. As an organisation and industry, we are fully transparent in the way we conduct our business, which I must emphasise very strongly.

In terms of our membership, 98% of insurance providers are members of the Irish Insurance Federation. Of those which are not members, the majority are international insurance companies, probably based in the IFSC, and do not currently feel a need to be members of the representative body. In terms of technology, it is for each of our members to use the technology available in the best way they can.

Again, I draw the committee's attention to the work we are doing with the OPW. We are starting to understand fully the good work it has done and the technicalities in order that our members can better understand and incorporate it into their underwriting assessment. This is an evolving process, on which we have taken a leadership position. In January, following the previous committee meeting in September last year, we invited the OPW to enter into face-to-face dialogue in order that we would better understand the remedial action which had taken place. We are open to such dialogue.

I am not sure if Mr. Horan has a further insight into the actual technicalities from an underwriting point of view. Again, I strongly emphasise that our members do not act as a cartel.

Mr. Michael Horan:

The work was done in the south County Dublin area and the senior engineer in Dublin City Council gave householders a letter. What we are trying to do in the working group-----

Caít Keane (Fine Gael)
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It was South Dublin County Council, not Dublin City Council.

Mr. Michael Horan:

I am sorry, it was South Dublin County Council. What we are trying to do in the working group is to understand clearly through the files from the OPW the areas which are protected by the flood defences which have been built and the standard to which those defences have been built. It goes beyond letters being given to individual households. It is about trying to understand, on a global basis, which areas are protected. That is a more efficient way of doing it because, as I said, household insurance is not the sort of product in repect of which one can survey every house. One needs to be able to understand which areas are protected.

Caít Keane (Fine Gael)
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Mr. Horan has said he needs to be able to understand. What are his competencies and qualifications? Areas are designated under the river basins management plan and in the water districts. The CFRAMS has designated areas, as Mr. Horan will know. The federation has been made aware that there are houses in the Old Forge, Grange Castle and John's Bridge estates which have not been flooded since the flood alleviation plan was put in place in 2001, yet their owners still cannot get insurance. What can the federation do about this because its members have refused to insure them? It could not involve those in the 2% which are not members of the federation. The federation has a code of conduct which members read, but they need not take notice of it. How does it know who takes notice of it and who does not? What follow-up action does it take? How many members have been struck off because they have broken the code of conduct, or has anyone been struck off?

Mr. Kevin Thompson:

It is not for the federation to tell its members how they should underwrite. If we were to start to do so, we would be entering some kind of cartel. It is for each of our members to work out its own-----

Caít Keane (Fine Gael)
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I did not ask that question.

Mr. Kevin Thompson:

The question was whether members followed the code of conduct and whether we policed it. The code is voluntary. It means that when our members meet, whether at board, council or working group level, they do not enter into conversations or practices which could be seen as anti-competitive. How we monitor it is through the minutes of meetings which are transparent and available for everyone to read. It is a transparent process.

On the work carried out in specific areas, again we are looking to the OPW to verify it. My colleague has highlighted the fact that it is not a question of receiving a letter from an engineer; we want to work through and fully understand the technicalities and make sure the defences are built to the required standard. If they are, we will look to our members to incorporate this as part of their underwriting criteria, but we admit it is early days in the process. We have momentum and are meeting the OPW once a month. As we evolve through this process, we may have to involve other agencies in the dialogue to ensure we adopt a holistic approach.

Insurance is only one element of the whole picture. I must again draw the committee's attention to the report produced in July 2010 in which numerous recommendations were made, including keeping drains clear, which is the local council's responsibility. This issue must be addressed as much as the work we are doing with the OPW. We will do our bit, but there are other pieces of the jigsaw which need to be addressed also.

Catherine Murphy (Kildare North, Independent)
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Most floods happen because following a lot of rain, there is an inadequate means of getting rid of the water quickly so. Mr. Thompson has said the federation meets the OPW and is trying to understand its processes. Getting a scheme up and running is a tall order because one goes through a painstaking process in allocating public funds.

What seems to be happening is that those living within 500 m of a watercourse are routinely refused. That did not happen before, or certainly I did not come across it until last year. It does not matter how much money the OPW spends from the public purse on remediation works, as one is routinely asked if one lives within 500 m of a watercourse. One may even be living above a river. Why are all of the insurance companies asking this question? Perhaps it is not a cartel in terms of pricing but it is in terms of shared information to ensure no company will incur a larger loss. I have come across situations where people have been refused insurance because they are living within 500 m of a watercourse, even though there is no evidence whatsoever of a risk of flooding. I have also come across people whose insurance premium last year was a few hundred euro but who were asked for €1,000 this year, even though there was no evidence whatsoever of a risk of flooding.

What is the point in entering into a process with the OPW when most mitigation or flood defence measures are taken beside watercourses? The people most likely to be affected are living within 500 m of where the remediation measures have been taken and the ones likely to have had a problem previously. The figure of 500 m is critical in terms of the new approach adopted to offering flood insurance.

The planning process needs to be assisted because there were mistakes made in the past.

There is no doubt that houses, businesses and so on have been built on flood plains. There has even been a problem in some areas during the construction of motorways because the planners did not adequately take note of the water table. The more information in the public arena the more of a problem that poses for the public with regard to adequate protection.

Will a certification process emerge from the federation's dealings with the Office of Public Works? The delegation referred to the letters sent by South Dublin County Council and Dublin City Council. Kildare County Council has also sent letters where there have been instances of flooding. Does the delegation intend to establish a certification process? What way will it feed the information to its affiliated insurance companies?

I wish to inquire about shared services. Does the federation have a blacklist of areas that are prone to flooding or another risk? Is the list shared with its insurance companies? Does it advise its companies that risk cover is inadvisable for reasons such as flooding, burglaries or whatever?

I can bear witness to the fact that local authorities do positive work, including in my area of Kildare. However, the positive work has not benefited people, from an insurance point of view, who have experienced flooding. Defences were put in place and they were tested by floods yet people still encounter difficulties when it comes to flood insurance cover. It would be quite useful for us to know what information the federation provides to its insurance companies.

It was stated in the presentation that the federation believes that "the 2009 planning guidelines are deficient and too complex" and were "only advisory". I, too, have sat on a local authority and was involved in the compilation of a county development plan from mid-2008 to 2009. The information that was used was advisory and also taken on board. What deficiencies does the federation see in the planning guidelines? I cannot see it and spoke of my experience. Perhaps Kildare County Council was good at preparing its plan. I would be pleased to hear any problems because if a problem is identified then it can be resolved.

The need for focus was also mentioned. I accept that there is a management issue when it comes to keeping drains and culverts clear and all of the rest of it. There is no point putting good systems in place if they will be blocked. The federation mentioned that all high risk areas need a risk management plan. There is risk assessment through the county development plans. Does the federation agree? Is more needed?

I wish to return to my key provision on the 500 m distance between a water course and a building. I only came across that provision in the past year. The provision has had a heavy impact on locations where there has never been evidence of flooding even after a number of instances of fairly severe weather. I know that such instances did not have an equal impact on all parts of the country. Since 2000 there have been more 100-year return floods in the area that I am talking about. There is ample evidence of floods and remediation systems have been put in place.

Mr. Michael Horan:

I shall respond to the question on the 500 m provision. A question on the proximity to the source of a possible flood, a river course or water course has been a standard feature of household proposal forms for a number of years.

Catherine Murphy (Kildare North, Independent)
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I have never come across it, not once.

Mr. Michael Horan:

It is a relevant question for insurance companies when they conduct an underwriting assessment. The next question that an insurance company would ask itself is whether the water course is defended.

Catherine Murphy (Kildare North, Independent)
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They do not ask people that question.

Mr. Michael Horan:

This is where our engagement with the OPW arises. We try to understand at a macro level what areas are protected by flood defences that have been established by the OPW. Over the years the OPW has done plenty of good work and installed good flood defences but there has been an information deficit in terms of communicating the information to insurance companies. The IIF and the OPW have a shared interest to ensure that the information is received by insurance companies so that the benefit gained from the flood defences is maximised by all of the people who live in the areas that are protected by them. It is more efficient to get the information from the OPW rather than to ask individuals whether their area is defended when one quotes for household insurance.

The Deputy also asked a question about certification.

Catherine Murphy (Kildare North, Independent)
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I wish to return to my question on the 500 m proximity to water. Insurance companies ask people whether they are within 500 m and immediately give a quote or refuse insurance. They never ask whether the premises is defended and they do not ask if there is evidence of flooding in the past. Most of the mitigation measures are on the perimeter of a review except where there is attenuation and things built into the middle of an estate. Insurance companies do not ask the question on proximity, they do not even get to the point of asking and that is when the refusal happens. Insurance companies do not want to insure anything that is within 500 m. It does not matter how much money that the OPW has spent on a riverbank because one is a goner in insurance terms if one lives within 500 m. That proviso is now applied more rigorously and all of the insurance companies ask the question.

Mr. Michael Horan:

Our desired outcome is that the insurers plug the OPW data on flood defences into their systems. Therefore, when one examines a proposal submitted by telephone, website or whatever one can see where a person lives, whether there is a river or other source of water in the neighbourhood and if flood defences of an acceptable standard have been built. That is the aim of our working group with the OPW.

Catherine Murphy (Kildare North, Independent)
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I have a question on the information provided by the federation to insurance companies. Does it compile a blacklist?

Mr. Kevin Thompson:

No, we do not.

Mr. Michael Horan:

No, we do not. The Irish Insurance Federation does not get involved in the underwriting decisions that individual members make. Underwriting decisions and pricing are matters for individual insurance companies and they compete with each other.

Catherine Murphy (Kildare North, Independent)
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Is information shared?

Mr. Michael Horan:

They do not share information with each other, no.

Catherine Murphy (Kildare North, Independent)
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Is information shared about areas that have experienced problems? Is there one location where the information is centralised?

Mr. Michael Horan:

Insurance companies examine a few things such as their claims experience or claims history of individual properties and flood models. They then make individual decisions and compete with each other for business and that is what the market is all about. Individual insurance companies operate in a very competitive market and compete with each other for business. That is why there is such a variety of quotes for household insurance.

Catherine Murphy (Kildare North, Independent)
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Except if one lives near a riverbank.

Michael McCarthy (Cork South West, Labour)
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Does Deputy Humphreys wish to make a final comment?

Kevin Humphreys (Dublin South East, Labour)
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It is not a comment but a question. Many members of the Irish Insurance Federation operate in international markets. Across Europe international standards apply and provision is made for events that happen perhaps at intervals of 100 years, 150 years and 200 years. There is an international certification for events that happen at those intervals, such as coastal flooding and the one-off weather event or what is known as monster rain. Has the Irish Insurance Federation conducted any research into the levels operating in Ireland? The OPW operates under the criteria of the international standards, the 100 year, the 150 and 200 year event. I notice insurance companies insure over a 100 year event. Is there an easier way of moving that certification? Time is an element that is causing many different problems. Is there a way of moving to the certification to which the local authorities and the OPW work? Some of the insurance companies work on an European wide basis to this standard of certification, but this does not apply in Ireland.

Mr. Michael Horan:

What we have said to the OPW is that the Irish Insurance Federation needs design standards to which the flood defences are constructed and the acceptable minimum standard is a return period of one in 100 years.

Kevin Humphreys (Dublin South East, Labour)
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If the OPW certifies the work to an international standard of one in 100 years, can that information be easily transferred to the members of the Irish Insurance Federation? I think the levels are taken on the east coast and they arrive at a mean and all the levels are graded from that, so they know exactly the height of the event level. If the local authority can state that the defences it has built meet the requirement of a one in a 200 year event and have certification for that level, will the insurance companies accept that certification, which gives them a significant margin for error? Under the current method, it will take quite a lengthy period to work through the process and in the meantime people cannot move homes or cannot get insurance cover.

Mr. Michael Horan:

We have engaged with the OPW and have been working together for the past three months. What we are doing is analysing the data from the OPW and trying to come to grips with issues such as those the Deputy raised. We might be able to give him a better answer to his question in a few months time, but right now I am not able to answer it.

Michael McCarthy (Cork South West, Labour)
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Ba mhaith liom buíochas a ghabháil leis na finnéithe, Mr. Thompson agus Mr. Horan, a tháinig anseo inniu agus a thug an-chabhair dúinn inár bpléití. Go raibh míle maith agaibh.

Tá an cruinniú curtha ar athló go dtí 26 Márta 2013.