2026-02-10

164. Deputy Eoin Hayes asked the Tánaiste and Minister for Finance if he has reconsidered flood insurance-reinsurance models in light of recent flooding events across the country and if he will make a statement on the matter [10059/26]

In June of last year, I asked the Taoiseach for a Government policy on a flood reinsurance scheme. He said that insurance companies have to do more. The Minister of State, Deputy Troy, corresponded with me on the issue. I thank him very much for that. Essentially, he said a State-backed scheme was impossible in a market like Ireland. Imagine my surprise to read his announcement for businesses and not residential properties last week in the Business Post saying: "It's fair to say that it will require State backing". Will the Minister of State establish the Department's position on flood reinsurance schemes?

I thank the Deputy for raising this matter again. I acknowledge that he has engaged with me on this on a number of occasions. I reiterate my earlier acknowledgement regarding the serious damage caused by the recent flood events and the impact they have had on families, communities and businesses across Ireland. As previously stated, insurance reform, including increasing the affordability and accessibility of insurance, including for flood insurance, remains a key priority for the Government. Building on the work carried out by the Central Bank, the Action Plan for Insurance Reform 2025-2029 includes four specific actions on flood and climate protection. With respect to action 17 of the action plan, the Department of Finance is currently engaging with multiple stakeholders on the development of a long-term strategic approach to the provision of flood insurance to consider potential solutions specific to Ireland to increase the availability and affordability of flood insurance. An update on this work will be provided at the next Cabinet subgroup on insurance reform. This work builds on the extensive research undertaken by the Central Bank of Ireland into the nature and scale of the flood protection gap in Ireland, which I mentioned earlier identified a flood insurance protection gap of approximately 5% of buildings in Ireland that have limited access to flood insurance. Flood insurance alone cannot address the totality of the flood protection gap and current Government policy remains focused on the development of a sustainable, planned and risk-based approach to managing flooding. As such, the Government remains committed to protecting Ireland's present and future generations by investing in climate adaption measures to manage the impacts of extreme weather. Accordingly, €1.3 billion has been committed to the delivery of flood relief schemes over the lifetime of the national development plan to 2030. This will protect approximately 23,000 properties across various communities from river and coastal flood risk. My officials will continue to monitor developments at EU and international level and assess flood insurance matters, including through participation in the OPW and Insurance Ireland working group. These matters remain a priority for this Government and efforts continue to be made to encourage a responsive approach from the insurance industry.

Gabhaim buíochas leis an Aire Stáit. With respect, I am not asking about flood defences. I am asking about the reinsurance scheme and a State-backed reinsurance scheme. The article I referenced stated: "Businesses and homeowners within certain pockets of Dublin, such as along the River Dodder, where several flood defence schemes have been developed in recent years, remain unable to obtain insurance." This is a real issue. In the letter the Minister of State sent to me last year, he said: In terms of the provision of flood insurance, please be aware that this is a commercial matter for insurance companies based on an assessment of the risks they are willing to accept. Government cannot interfere with the provision or pricing of insurance or direct as to what cover is provided is reinforced by the EU framework for insurance solvency II directive. Apparently, the State can after all get involved in reinsurance schemes. From the outset, I had issues with the Government's position because the solvency II directive allows for general price controls. Many other countries have done it. Consorcio de Compensación de Seguros in Spain, Caisse Centrale de Réassurance, CCR, state insurance providers in France and even VHI here in Ireland are exempt from the directive. Is it Government evasion and a lack of ambition at play here and not regulatory constraints?

With due respect, flood defence measures are an important part-----

They are not working in my constituency.

-----of providing protection for households and businesses. Speaking to any of the unfortunate householder or businesses in areas where the schemes have been held up for a myriad of reasons over the past number of years, they eagerly await the roll-out of the flood defence mechanisms. It is fair to say that in many constituencies, such as in Athlone in my own constituency, where permanent flood defence measures have been introduced, they have brought a real sense of confidence and reassurance to people who have previously been affected by flooding. It is unfortunate that heretofore the insurance companies have not recognised in a meaningful way State investment in permanent flood defence mechanisms. That is why I met with my colleague, Minister of State, Deputy Moran and I am due to meet with my colleague, Minister of State, Deputy Cummins, next week in relation to outstanding issues with a service level agreement to ensure insurance companies step up to the plate in relation to areas where flood defences have been erected. I will come back in the next reply regarding areas where there are no flood prevention mechanisms in place.

The residents of Sandymount, Ringsend, Merrion and coastal communities across Dublin cannot afford another disaster and delayed action from the Government. A Financial Times article from last year and University of Galway's studies have noted that Ireland's coastal cities face huge risks during future storms. Sandymount would have been submerged in approximately 5 m in Storm Éowyn if a high tide occurred at the time. It is time for reinsurance models that include not just businesses but also people's homes to protect people's lives as well as their livelihoods. It is time the Government stopped using the excuses of EU regulation or the insurance companies not doing enough or flood defences having to take care of the risk and get on with the responsibility of protection for the coastal communities that need it in terms of reinsurance schemes. People know what climate change means. It was mostly riverside communities affected in recent weeks, but coastal communities know that they will face some of the most extreme challenges in the future. Will the Minister of State illuminate whether his comments to the Business Post were accurate, whether the Government is considering a State-backed scheme and whether that is something that it will be delivering over the coming weeks and months?

In terms of the reinsurance schemes, it is important when we are considering about flood insurance that we also consider thatch insurance. I have a constituent in Carlow who was flooded but does not have insurance for flooding. As he lives in a thatched house, he also does not have insurance for fire. I ask that when we are considering reinsurance that we might consider that too.

To reinforce what Deputy Hayes said, we have had this issue in Clontarf. The River Wad flooded in 2023. The city council got on with a scheme - the protection of the Wad phase 2 funded by the OPW. Work is more and less complete. It successively went into operation just before Storm Chandra, but there is a big question mark as to whether the insurers will come to the table and start insuring those areas again with the works done. I endorse what Deputy Hayes said. I encourage the Minister of State to proceed with this.

The Minister of State is entirely correct in that the best insurance is where we have the necessary flood protection and indeed coastal protection schemes. In some of the communities near where I live, such as Arklow, Aughrim and Enniscorthy, recently we have witnessed the dramatic impacts of floods. I wish to focus on Bunclody where they had floods for the first time in 60 years where people did have insurance, particularly along Ryland Road, on some of the properties. Now those businesses and homes do not expect to be able to get it into the future. I am certainly open in terms of the suggestion that has been made to exploring until we can guarantee that those flood protection schemes are put in place that we can guarantee those homeowners and business owners some degree of security until the necessary protections are in place.

I thank the Deputies for raising their points. I do not know whether Deputy Byrne was present earlier when I mentioned that the Cabinet committee on climate action, environment and energy is meeting tomorrow to examine what immediate measures can be taken to protect areas where there is a longer lead-in for permanent flood defence measures to be introduced. In relation to Deputy Callaghan's points on the thatched issue, that is something I am acutely aware of. It is a very niche part of the market. I have been in London meeting insurance companies to explore the possibility of seeing what level of appetite they might have in this regard. I have also met the representative body in relation to the thatched industry. I am happy to engage with the Deputy further in that regard. In relation to the main question, there is an acknowledgement that an intervention is needed. That is why it is one of the priority actions in the action plan for insurance reform. There are ten priority actions. This is one of the priority actions to develop a long-term strategic approach for the provision of flood insurance. That will require working with the Central Bank, insurance industry, Department of Finance and OPW. Today, I met with a representative of the insurance industry who sits on its flooding task force. I expect a proposal to come from the task force within a number of weeks. It might be in a month or so. The Government will explore that proposal and look at what support we can put in place to ensure flood insurance is something people can expect in the not too distant future. To clarify my remarks in the Business Post, such support will not be exclusively for businesses. Any scheme we look to introduce would be inclusive in supporting both residents and businesses.