Written answers

Tuesday, 15 June 2021

Department of Finance

Insurance Coverage

Photo of Cathal CroweCathal Crowe (Clare, Fianna Fail)
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113. To ask the Minister for Finance his policy in relation to increasing flood insurance coverage and the provision of risk equalisation in this regard; and if he will make a statement on the matter. [31772/21]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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It is important at the outset to state that the provision of cover is a commercial matter for insurance companies, based on an assessment of the risks they are willing to accept. As such the Government cannot interfere in the provision or pricing of insurance, or direct as to what cover is provided on. Consequently, neither I nor the Central Bank of Ireland can interfere in this, as reinforced by the EU framework for insurance (Solvency II Directive).

Current Government policy in relation to increasing flood insurance coverage is primarily focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. Almost €1 billion in flood relief measures is being invested over the lifetime of the National Development Plan 2018-2027, with an expectation that insurers will provide cover where this has occurred. A key pillar of Government policy is the Memorandum of Understanding between the Office of Public Works (OPW) and industry representatives Insurance Ireland. This provides for the exchange of data in relation to the 18 completed flood defence schemes which should, in turn, provide a basis for the increased provision of flood insurance in these areas. While there has been an overall increase in the provision of flood insurance between 2015 and 2020, it is acknowledged that some households are still experiencing difficulties in areas with demountable flood defences. My officials are engaging with both Insurance Ireland, the OPW and other stakeholders regarding flood defence schemes and how the levels of insurance cover might be improved in areas where flood defence works have been completed.

Legislating for compulsory flood insurance was an option considered by my Department in its review of policy in relation to flood insurance in 2016, which formed part of the ‘Interdepartmental Flood Policy Coordination Group Interim Report’. It was found that such an approach would have limited impact on the availability of flood cover. More recently, in 2019 my Department published a discussion paper on flood insurance entitled ‘Public Consultation on Climate Change and Insurance in the context of the ‘Climate Action Plan 2019 to Tackle Climate Breakdown ’. My Department is continuing to review the challenges of property insurance and flooding as part of the action points for my Department under the Climate Action Plan.

Finally, the Deputy should be assured that Minister of State Fleming and I will also continue to engage on all aspects of insurance reform, including flood insurance issues, and that every effort is being made to encourage a responsive approach from the insurance industry.


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