The cost of recent widespread flooding is unlikely to hurt insurers as much as Ireland’s last major flooding event in 2009, according to industry body Insurance Ireland.
Flooding in the winter of 2009 cost the industry €250m but that figure is likely to be much smaller this time around, the head of non-life insurance for Insurance Ireland said.
“As of now, I would not expect the cost to be of that magnitude,” said Michael Horan.
“The flooding of 2009 in the mid-west and south of the country cost the insurance industry €250m. One of the big factors there was a huge amount of damage in Cork city when the River Lee burst its banks.
“We don’t have that this time around, so the cost should be less. However, there is still the chance of further flooding in the next days and weeks, so that could change.”
Insurers are also entitled not to offer insurance to land once it has flooded, so landowners who had cover in 2009 may not have been insured when this year’s floods hit.
Flooding is one of the most costly weather events from an insurance perspective, Horan said.
“We have had about 15 major weather events in Ireland over the last 10 years, at a cost of around €1.5bn. That’s a mixture of flooding, freezing and winds. But about half of the total cost has come from floods.”
He declined to put a figure on the probable cost of this winter’s floods, stating that the total was too difficult to predict until claims start arriving.
“In terms of premiums, insurers prepare for bad weather events, so this won’t necessarily result in higher premiums next year.”
FBD, the country’s only indigenous insurance company, said it was too early to tell how much the flooding would cost it.
Jonathan Hehir, managing director of insurance broker businesses Insuremyhouse.ie and Insuremyshop.ie, criticised the Government for failing to establish a flood fund with part of the levy it charges insurers.
“We need action now,” said Mr Hehir. “A flood fund can still be established. We are not suggesting an increase in premiums, but instead that just 1pc of the hefty 5pc insurance levy is redirected to a special purpose fund.”
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