Seán Connick (Wexford, Fianna Fail)

It must be stated at the outset that the decision to provide new cover or renew existing cover in any insurance situation is a commercial matter for insurance companies, as it allows insurance companies to properly assess the risk they are accepting. These are often considered on a case-by-case basis and, as such, the Government does not have any influence over this matter. That being said, the Government is fully aware of the difficulties currently being experienced by householders in certain areas in accessing flood insurance. The Minister for Finance is completing a memorandum for the Government which is expected to go to Government very shortly on the options available to address these difficulties. Care has to be taken that the State responds in an appropriate and cost-effective manner and in a way that allows it to provide flood relief measures which allow the insurance companies to continue providing cover in those areas.

While it must be acknowledged that there have been instances where insurance companies have refused to cover some property owners who made claims on their policies in the aftermath of last year's flooding, the Irish Insurance Federation, IIF, has informed the Department of Finance that the insurance industry is very reluctant to discontinue flood cover for existing policyholders, and would generally only do so in exceptional cases, such as where there have been repeated flooding claims. The IIF has also indicated that approximately 98% of householders who have household insurance currently have flood cover. It points out that insurers look at the claims history of the individual risk when deciding what underwriting action to take. They also look at any flood protection measures implemented by the local authority or OPW in the area. It states that where the flood risk is higher than normal, people will generally pay a higher premium or have a higher flood excess on their policy.

It is clear that the structured engagement between the IIF and the OPW is critical if progress is to be made on this issue so that underwriters are aware of what is being done in different parts of the country to address flooding problems. Such an arrangement would also help the OPW prioritise its remedial works which in turn would provide greater reassurance to the industry that the problem areas were being addressed in a structured way and this should lead to a greater willingness to offer cover in marginal areas.

Work has already begun on this and as part of this structured engagement the OPW has provided the IIF with a list of its capital projects and their current status. It has also provided it with another list of other flood mitigation works and studies on a county-by county basis. Furthermore, the OPW met industry underwriters at the end of October in order to give them a greater understanding of how they are addressing the flooding problems in different parts of the country. This type and level of engagement between the agency having the lead role in flood prevention measures and those providing insurance is part of the Government's response to this issue in flood prevention measures.

Another key part of the response I wish to draw to the attention of the House is the fact that the Government allocated €50 million for flood risk management activities for 2010, which is administered by the Office of Public Works. This increased allocation allows for delivery of a range of capital works schemes throughout the country. A concerted effort to roll out schemes, taking account of the seriousness of the underlying flooding problem in the different localities, is currently underway.

In February of this year, the Minister of State responsible for the OPW, Deputy Mansergh, launched the River Lee flood risk management plan, which is the result of three years work by the OPW and its partners, Cork city and county councils. This sets out a range of measures to manage effectively and efficiently the flood risk for the whole Lee catchment, which, when implemented, should significantly reduce the likelihood of the severe flooding witnessed in Cork city and elsewhere in the catchment of last year.

The OPW, in association with the city and county councils, is currently progressing the lower Lee flood risk management scheme, one of the key recommendations in the Lee catchment flood risk management plan. This scheme seeks to manage the flood risk from the River Lee and has been developed to protect against river and tidal flooding in and around Cork city. The scheme will involve works downstream of Inniscarra and through Cork city, permitting greater discharges to be made from the ESB reservoirs without causing flooding of properties and will provide protection against flooding from the river and during periods of high tide or storm surge. Based on extensive analysis, undertaken between 2006 and 2009, of river flows and tidal-surge levels, this scheme is considered the most cost effective means of managing these flood risks in Cork city.

While it is likely be some time into 2012 before construction works begin on the scheme, should interim measures be identified to reduce the existing level of risk in the course of the consultant's work, these will be considered by the OPW and its partners on the steering group. Furthermore, the OPW has sanctioned €0.9 million for Cork City Council to undertake the repair of quay walls breached last November and contract works for this are currently at tender stage by Cork City Council. I can confirm that the cost of undertaking the development work and the eventual construction works has been included in the OPW's budget profiles for flood relief activities for the coming years. The Minister of State is confident that the scheme to be developed will lead to a significant reduction in the risk of flooding as experienced last November.

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