Big Freeze insurance payouts likely to top €244m
THE insurance cost of the Big Freeze is likely to top the €244m payouts triggered by last year's catastrophic flooding, Irish Insurance Federation (IIF) boss Mike Kemp said yesterday.
Mr Kemp was speaking after an Oireachtas committee meeting where he staunchly defended insurers' policies on bad weather claims, insisting there was no widespread trend of refusing cover to householders in certain regions.
The €244m hit for last year's floods represents one of the biggest payouts ever made by the Irish insurance industry, and comes after insurers had suffered losses of €174m on their household books in 2008 thanks to €100m worth of weather claims that August.
Mr Kemp yesterday said that while the IIF had not finished compiling details of the Big Freeze's insurance tally, the figure would “probably be in excess of the flooding” costs.
This latest whammy of costs will put upward pressure on household insurance premiums. But, under persistent questioning from committee members, Mr Kemp insisted that household insurance was generally still available.
Properties The only instances where household insurance was not on offer were cases where the policies were “not economic” because there was a near certainty that properties would flood, he said.
Pressed by TDs about a system that would see insurers collectively guarantee that every household and business nationwide would get some form of cover, Mr Kemp insisted that any such arrangement would need government support.
Mr Kemp also used yesterday's committee meeting to air industry concerns about the upcoming Solvency 2 rules that will dictate the amount of capital EU insurers have to keep in their reserves.
“There is a serious concern in the light of the understandably conservative approach being adopted by the national regulators in the wake of the financial crisis that … the combined effect of a number of implementation recommendations by the EU Insurance and Pensions Committee will be to significantly increase capital requirements,” he said.
This burgeoning capital burden could see capacity withdrawn from the Irish market, ultimately leading to higher prices for consumers, Mr Kemp warned after the meeting.