Mr. Tony Smyth:

I welcome the opportunity to address the joint committee on the important issue of the provision of flood insurance and the difficulty in providing insurance to people who live in areas most at risk of flooding and subsidence. The Office of Public Works has a specific role in the exchange of information with the insurance industry on flood risk and flood defence matters. The OPW has no responsibility for the oversight or regulation of the insurance industry, insurance matters generally or for issues of subsidence.

I will outline for committee members the OPW's responsibilities in the area of flood risk management to be helpful. Following the strategic review of flood risk policy in 2004, the OPW was assigned the lead co-ordinating role for flood risk management in Ireland. At the core of the OPW's work is the objective of reducing, to the greatest extent possible, the level of flood risk to people, property, infrastructure and the environment. In the context of its role and responsibilities in respect of flood risk management, the OPW delivers services through the following four key areas: strategic planning to manage flood risk in future under the catchment flood risk assessment and management, CFRAM, programme, which also ensures that Ireland is in compliance with the EU floods directive; a programme of capital investment to address existing flood risk to properties and infrastructure through major and minor flood relief projects, which are delivered largely in partnership with local authorities; programmed maintenance of arterial drainage and urban flood relief schemes completed by the OPW under the Arterial Drainage Acts; and an advisory role to the Department of the Environment, Community and Local Government as well as assisting the public to prepare and recover from flooding. In carrying out its functions, the OPW works in close co-operation with other State bodies, principally the local authorities, which have key responsibilities in the area of flood risk management in the country as well.

I am keen to discuss the memorandum of understanding with Insurance Ireland as part of the agenda for today's meeting. The Government has agreed that the current strategy of the OPW investing in flood defences and flood defence schemes in the worst-affected areas as well as the CFRAM programme represent the most cost-effective solution to the difficulties faced by people from flood risk, including the difficulty of obtaining insurance cover. To support the regular exchange of information between the insurance industry and the OPW in respect of flood defence works, a memorandum of understanding between Insurance Ireland, the representative body for insurance companies in Ireland, and the Office of Public Works was signed on 24 March 2014 following some 14 months of work, including detailed technical work on the format of the data to be provided by the OPW to Insurance Ireland.

As I indicated earlier, the OPW has no role or responsibility regarding the oversight or regulation of the insurance industry. The memorandum of understanding between the OPW and Insurance Ireland has a specific focus to agree a basis on which information can be provided to the insurance industry on flood relief schemes completed by the OPW and the standard of protection offered by those schemes. While it is accepted that the provision of cover, the level of premiums charged, and the policy terms applied are a matter for individual insurers, the memorandum notes the OPW requirement that, when assessing exposure to flood risk, insurers take full account of information provided by the OPW on completed flood defence schemes.

The memorandum is also focused on the provision of data by Insurance Ireland to the OPW about areas impacted by flood loss. The memorandum of understanding will not guarantee the availability of flood risk cover in the locations concerned. The memorandum came into effect on 1 June 2014 with an initial tranche of data provided by the OPW to Insurance Ireland in respect of 12 completed flood defence schemes, showing the design, extent and nature of the protections offered by these works. A list of these schemes has been provided to the committee.

Insurance Ireland in early 2015 provided some general and provisional data to the OPW about current levels of flood cover for households and businesses affected by these 12 schemes. The provisional data provide early indications that flood risk insurance is widely available in areas where flood relief schemes have been completed by the OPW. A more definitive breakdown on the provision of flood insurance risk will not be available from Insurance Ireland until after June, when a full renewal cycle has been completed following the coming into effect of the memorandum.

Following receipt of these provisional data, the Insurance Ireland-OPW flood working group met, with the Department of Finance joining the group for that meeting. A meeting took place on 3 March 2015 and the next meeting is scheduled for later this month. The OPW expects metrics on the additional insurance coverage that results from the construction of flood defence works will become available as part of the ongoing exchange of information with Insurance Ireland. Since the last meeting, the OPW and the Department of Finance have been in consultation on the subject of required clarification in relation to these initial data and further information we wish to have included in the data gathering work undertaken by Insurance Ireland. We will write to Insurance Ireland to set out some of those issues.

The arrangements set out in the memorandum represent an ongoing process. In January 2015, data on a further four flood relief schemes, provided to the committee in an appendix to the statement, was communicated by the OPW to Insurance Ireland in the agreed format and data on further completed schemes will be provided in due course.

Ultimately, it is a matter for the insurance companies to decide how they will use the information provided on completed flood defence schemes. As part of the process, they are committed to taking the information into account in their assessment of risk and it is hoped that this will facilitate the provision of flood insurance cover in areas that are protected by completed schemes.

In conclusion, the OPW is committed to doing all it can across its four key areas of activity within available resources to identify and prioritise the measures necessary to manage the risks from significant floods. Our work is towards the core objective of reducing, to the greatest extent possible, the level of flood risk to people, property, infrastructure and the environment. The data exchange between the OPW and Insurance Ireland, through the memorandum, is a means of measuring the outcome and the impact of the Government's current policy and investment in this area. I am happy to take any questions from committee members.