Homeowners seeking insurance cover in flood-prone areas could be priced out of the market unless insurance companies, State agencies, property developers, banks and local authorities share data about at-risk areas.
A report from the London School of Economics and University College Cork warns the way flood insurance is structured is "not fit for the future", with little transparency around how risk is assessed.
The 'Fit for the Future' report, published today, says there is a danger that overcoming the high cost of insurance is focused on "short-term, stop-gap efforts" despite risk increasing as climate change takes hold, coupled with increased use of land for development. It says the "only sustainable response" is that underlying risks are assessed, and information shared.
"There is much distrust among both consumers and the Government about the behaviour of insurance companies, which is unlikely to change without greater transparency from insurers about their understanding of flood risk, their underwriting practices and how they support flood risk management," it says.
"There is concern that if these issues are not addressed, the premiums associated with insuring flood risks will exceed consumers' ability or willingness to pay, or that the private sector may find flood insurance commercially unattractive and withdraw from the market."
The study is part of the 'Costing climate change impacts and adaptation in Ireland' research project conducted by UCC and the Grantham Research Institute on Climate Change and the Environment.
It is funded by the Environmental Protection Agency.
It comes after the Irish Independent last week revealed the State faced damages of more than €3bn over the coming years unless it invests €850m in flood defences to protect more than 25,000 homes and major pieces of infrastructure, including roads and airports.
While the Office of Public Works has completed in-depth assessments of 300 urban areas, insurance companies are not allowed to use this data to assess risk. The report says there needs to be a "radical shift" away from the current approach, and that sharing data could help both manage costs and help identify vulnerable areas.
It comes amid concern about the high cost of insurance, with companies accused of treating properties in large areas as being uninsurable, despite flood protections being in place.
It also says that while insurers and the Government are discussing the flood risk issues, underwriting decisions remain "far from transparent" to customers.
In 2011, the OPW identified 300 areas at potentially significant risk from flooding. Viable flood relief measures have now been identified to provide protection to almost all properties at risk from flooding within these areas.