Written answers

Thursday, 18 January 2018

Department of Public Expenditure and Reform

Flood Risk Insurance Cover Provision

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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37. To ask the Minister for Public Expenditure and Reform the proposals his Department is working on in conjunction with the OPW and the Department of Finance to strengthen the engagement with the insurance industry to improve the availability of flood insurance cover in view of the State's ongoing investment in flood defence schemes as per point 70 in the Action Plan for Rural Development; and if he will make a statement on the matter. [54713/17]

Photo of Kevin  MoranKevin Moran (Longford-Westmeath, Independent)
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The Minister for Finance has overall responsibility for the Government’s flood insurance policy.

The Office of Public Works is continuing to deliver a significant programme of capital investment to address existing flood risks to properties and infrastructure through major and minor flood relief projects, in partnership with local authorities.

To the end of 2017, the Government’s investment, since 1995 of €350m has delivered 42 major flood defence schemes that provide protection to 9,300 properties and the economic benefit to the State in damage and losses avoided estimated at €1.7 billion.

In addition, the Government has already invested a further €80m on eight other schemes currently at construction and 25 at design and planning.

The major flood defence schemes now completed by the OPW are to the standard required by the insurance industry – to protect against those 100 year significant flood events. They are also adaptable against any future impact from climate change.

The Government’s strategy is that in return to its investment on flood defence schemes in the most at risk communities, households and businesses should be able to access flood insurance.

The Office of Public Works has a very specific role in the exchange of information with the insurance industry in relation to completed flood defence schemes.

On 24th March 2014, the Office of Public Works agreed a Memorandum of Understanding with Insurance Ireland the representative body for the insurance companies in Ireland. This Memorandum of Understanding has a specific focus with agreeing a basis on which information can be provided to the insurance industry on flood relief schemes completed by the OPW to an agreed standard of protection desired by the industry.

The Memorandum accepts 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 of Understanding does not guarantee the availability of flood risk cover in the locations concerned.

The Memorandum came into effect on 1st June, 2014 with an initial tranche of data provided by the Office of Public Works to Insurance Ireland in respect of twelve completed flood defence schemes; showing the design, extent and nature of the protections offered by these works. Details of a further five schemes were provided in January 2015 and details of the Waterford Flood Defence Scheme were provided last year.

Under this Memorandum of Understanding, Insurance Ireland provides the OPW with details of the level of policies that include flood risk insurance within the benefitting areas of these schemes.

To date OPW has provided details to Insurance Ireland on 18 completed schemes nationally and Insurance Ireland surveys its members to ascertain the extent to which flood insurance cover is available in these areas. The results of the most recent survey indicated that 83% of property insurance policies in these areas include cover against flood risk.

The Department of Finance and the OPW meet with Insurance Ireland on a quarterly basis in order to address issues in relation to this transfer of data. The most recent of these meetings took place on December 8th 2017 and the next meeting is scheduled for early March.

The recent meetings, while not exclusively, have focused on the flood cover in areas protected by demountable defences. The insurance sector has acknowledged that demountable defences are designed and when properly erected meet the desired standard. The OPW has, in recent months given Insurance Ireland detailed information it sought to explain the protocols and procedures in place to maintain, test and erect demountable defences. Discussions are continuing with the Department of Finance to explore options to address the industry’s concerns about the ‘human element’ of demountable defences.

Separately the OPW and Department of Finance are working with the insurance sector to baseline flood cover ahead of schemes being completed. This will provide a ‘before and after’ of flood insurance cover for each community to be protected in the future; and give a baseline to be able to address any concerns about the levels of cover being reported.

Any person with an insurance-related query or complaint can contact Insurance Ireland's Insurance Information Service (01 676 1914 or iis@insuranceireland.eu). In addition, the Financial Services Ombudsman (1890 88 20 90) deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers.

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