James Bannon (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Finance the progress he is making with insurance companies to ensure that reasonably priced flood insurance is provided for families and businesses in high flood-risk areas; and if he will make a statement on the matter. [49023/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At the outset the Deputy should note that individual decisions on pricing and underwriting are a commercial matter for insurance companies and neither I, nor the Central Bank, has any influence over this matter. I have been informed that each application for flood cover is considered on a case by case basis, as this allows an insurance company to properly assess the risk it is accepting. The significance of these risks is reflected in the fact that the IIF has indicated that the cumulative cost of the eight major flood events since the year 2000 has been €697 million.

The State has made a significant contribution to reducing the threat of flooding through a very significant investment in major urban flood defence schemes since 1995 and this has been hugely beneficial in terms of properties protected and losses avoided. It is estimated that almost 8,000 properties have been protected to date and the value of the benefit deriving from that is of the order of €800 million.

The approach agreed by the Government in order to ensure reasonable priced flood insurance is provided is twofold and works to improve the availability of flood insurance cover by (a) continuing prioritising spending on flood relief measures by the OPW and relevant local authorities, and (b) improving channels of communication between the OPW and the insurance industry in order to reach better understanding about the provision of flood cover in marginal areas and how this can allow more effective insurance cover.

Continued communication between the insurance industry and the OPW is critical to ensure that individual underwriters are aware of what is being done in different parts of the country to address flooding problems including time scales, completion of flood prevention measures, level of expenditure and likely completion dates. In the same way a flow of information from the insurance industry will undoubtedly help the OPW and local authorities prioritise remedial works which in turn should provide greater reassurance to the industry that problem areas are being addressed in a structured way and this should lead to a greater willingness to provide cover in marginal areas.

As part of this, officials in the OPW have been working on developing a system for presenting information on flood defence schemes to the insurance industry to meet the technical requirements set out by the industry for risk assessment purposes. On 5 July 2012, the OPW made a presentation to the IIF and a number of the main insurance companies on a proposed template for providing the required information. The essential focus and objective of OPW's work has been in putting flood defence information on a GIS platform. This means that the information will be accessible and viewable in a mapping environment.

I understand that the IIF has indicated that it is in the process of collating the responses it has received from its members on the OPW information and it hopes to be in a position shortly to formally respond on this. I note that the Chief Executive of the IIF stated in a recent presentation to the Joint Oireachtas Committee on the Environment, Culture and the Gaeltacht that "one of the positive developments over the past couple of years is that there has been much more engagement on a bilateral basis with the OPW". He acknowledged that the flow of information is much improved and that the insurance industry is much more involved in the process.