Irish National Flood Forum Ltd.
Working for flooded communities in Ireland.
Mr. Chairman, Committee Members, members of the Oireachtas, we
thank you for inviting the Irish National Flood Forum here to Leinster
House to brief you on OUR issues, as home-owners and Communities
affected by flooding.
The Irish National Flood Forum is a voluntary organisation made up
of people and communities that have suffered from flooding and are at
risk from flooding.
In today’s presentation, I firstly intend to explain the situation as it is
at present for homes across the country.
Secondly, I discuss the question … are Insurance Providers in Ireland
acting as a cartel to increase their profits from the Irish market at the
expense of the Irish citizens.
And finally, I will develop what we expect, you, our elected
Oireachtas members to do for the citizens of Ireland.
The Situation at Present.
We know that people whose homes that have been flooded, are already
suffering in that they cannot get insurance, and also, as their homes
are no longer mortgageable, that the value of their houses have
plummeted.
Acknowledging this issue, the Revenue Commissioner, Ms. Josephine
Feehily has confirmed to the Public Accounts Committee on Thursday
21st of February, that flooding will impact on Property Tax valuations.
We hope that, with the Revenue Commissioners understanding the
issue, it will enable the OPW to get further funding to speed up the
Flood Relief programmes in Ireland.
My colleagues will give many instances from Bandon, Clonmel, Cork,
Dublin, Fermoy, Skibbereen where Irish Insurance providers are
treating the Irish public badly.
In a resent press release, the Irish Brokers Association, after analysing
and collating data from insurers, the IIF (Irish Insurance Federation)
and the IBA (Irish Brokers Association) own data from members all
over the country, estimate that up-to 50,000 households have, or are at
risk of no flood cover within the 26counties of the Republic of Ireland.
The IBA observe the following in relation to the insurance provider’s
use of Geo-coding:–
“Geo-coding, although handy for insurance companies is not
accurate and can leave vast swathes uninsurable, despite no
history of flooding in the area. It can also ignore remedial works
which have been put in place by the OPW and local authorities
rendering the area far less prone to flooding”
Even this committee understand, and are or the record stating that the
practice of geo-coding of area’s by insurance companies must be
reviewed.
Furthermore, those who have a claim and lose or do not renew their
cover, will never get cover again, under the current regime, as terms
imposed by the previous insurer must be declared to all future
insurers, plus a question on the proposal form asks – ‘are you in an
area that has EVER flooded or if there is a history of flooding in the
area’; and/or ‘is your house situated within 500metres of a river’.
While we acknowledge the work of the OPW is flood prevention
measures, which is, by it’s nature, slow, taking up-to 10years from
inception to completion.
We, the victims of flooding, CANNOT wait for the OPW. As Dr.
Juliana MacLeod, a principal clinical physchologist with the HSE
South has stated, the “long term issues/effects are influenced by both a
sense of security (likelihood of the event happening again) and
Insurance Issues ….. it is that important! It is as much a health issue as
a financial issue.
Are the Irish Insurance Providers (Companies) acting as a Cartel?
WE ask, why do the Insurance Providers in Ireland, whose head
offices are across Europe and America, threat the flooded public in
Ireland differently from the public in their home countries?
If you have a car crash of your home burns to the ground, are you
excluded from ever having insurance cover?
If your neighbour has a car crash or your neighbours home burns to
the ground, are you excluded from ever having insurance cover? …..
this is the case with flood insurance cover in Ireland! If your
neighbour has ever flooded, then the Irish Insurance providers will
exclude you FOREVER from being able to obtain flood insurance.
But was is more surprising, is all the Insurance Product Providers
seem to be singing from the same hymn-sheet ….. in a competitive
industry, they can all include the same exclusion safe in the
knowledge that their competitors will also exclude the same.
Just think, can you think of any other industry where every competitor
a Product Provider have the same clause?
What is another reason to believe that ALL the Insurance Providers
are acting as a cartel is if you have made a claim.
No provider will even quote you home insurance if you have made a
claim in the previous five years ….. thus proving that there is NO
COMPETITION in the provision of Insurance in Ireland.
Can you think of any other business in Ireland where the public (who
have mortgages) are required to buy Home Insurance but MUST buy
the Insurance, at an inflated premium, off a single provider, because
the providers “competitors” refuse to even quote for the business for a
period of five years!
A cartel is an explicit agreement among competing firms that agree to fix
prices or production. Cartels usually occur in an industry where there is a
small number of sellers. Cartel members may agree on such matters as
price fixing, market shares, allocation of customers, allocation of
territories, or combination of these. The aim of such collusion is to
increase individual members' profits by reducing competition.
We, also attach results of surveys which we have conducted in the
various locations. An unusual statistic compiled the Irish Brokers
Association, is that the majority of claimants who actually received a
payment, were actually UNHAPPY with the level of support given by
their Insurance company.
Other statistics of note include that event though respondents have
spent on average between €3,895 and €6,969 of their own money on
flood mitigation measures, not one insurance provider asked, or took
account of these mitigating measures when REFUSING flood
insurance cover! During a flood event, the public come together to
work for hours to protect property (mitigating any possible cost to
Insurance companies), yet the Insurance companies it appears would
prefer if you did nothing.
We are encouraged that this Joint Oireachtas Committee understand
this issue and have stated their objections, and I quote:“we have been told of instances where remedial work in tearms
building or improved flood defences have been undertaken, and
people in those areas still can’t get property insurance. This
should not happen.
This is not the forum to discuss the ‘aggressive position’ taken by
Insurance Providers in relations to claims. Individual claimants being
forced to employ ‘loss assessors or claims professionals’ to achieve
realistic settlements, and then find that 30% to 35% of agreed sums
are being retained.
What we expect from our Elected Oireachtas Members!
We ask you as legislators, to help the 50,000 homes, approximately
250,000 citizens of this state, who are being bullied by the insurance
industry, who in this state are acting as a cartel, not price fixing, but
agreeing to exclude 50,000 homes to increase their profits!
We ask you as legislators, to show leadership, stand up for your
constituents, and legislate for the insurance industry to abide by
certain protocols, or a certification process to enable household to
avail of private home insurance cover which includes flood cover!
At present the Insurance providers in Ireland do not have to explain
why they do not give cover, yet if your home is mortgaged, you are
required to pay for insurance, which is weighted because of goeprofiling
We need you as legislators to insist that if hydrologist calculate that an
area has probable return period, then we want the Insurance Industry
to be obliged to offer Flood Insurance cover.
Low risk
1:150+ return period
100% cover.
Moderate risk
1:75 – 1:150 return period.
Individual.
Significant risk Greater than 1:75 return period.
No cover.
This basic protocol would be transparent and helpful to the Insurance
Industry, the OPW and the general public.
We do not know where the current 5% Government levy on all general
insurance policies is going. Prior to the extra 2% being added for the
Quinn legacy in January 2013, all policies paid a 3% levy which went
straight to Government for the past 15years. We are not asking for the
Insurance Industry to subsidise the flood relief works of the OPW,
even when it is obvious that the insurance industry would gain if they
went into PPP on Flood Relief Schemes. We are asking for the
Insurance Industry to take responsibility to explain to the public why
they have not accepted the remedial works completed by the OPW that
are helping resolve flood risk in many areas.
We do not know where the current 5% Government levy on all general
insurance policies is going. Prior to the extra 2% being added for the
Quinn legacy in January 2013, all policies paid a 3% levy, which went
straight to Government for the past 15years.
What we are asking for, is could not a portion of this 5% Government
levy be set aside for a flood disaster fund, similar to the proposal of
Brendan Dempsey of the Saint Vincent de Paul for those flood
victims, who want to purchase, but are excluded from, flood insurance
cover.
See attached proposal ‘A’ for how this pilot project maybe rolled out.
Finally, I wish to introduce my collegues, Michael Thornhill –
Skibbereen Floods Committee; Cllr Joe Leahy from Clonmel; Gillian
Powell – Bandon Community Flood Group;
I also wish to thank the following for their help in this proposal,
namely Brendan Dempsey (Cork president of the Saint Vincent de
Paul) who is present here, and his interesting colleagues! My
colleagues, Skibbereen Floods Committee, and Anne Kelleher from
the Dodder Flooding Group.
Thank you for your time, and we now ask you for any questi ons, that
you may have?