Tuesday 12 December 2017

Any new levy will be passed on to others, warns Insurance body

Alan Kelly: won’t rule out imposition of levy. Photo: Tom Burke
Alan Kelly: won’t rule out imposition of levy. Photo: Tom Burke

Niall O'Connor and Kevin Doyle

The insurance industry has issued a stark warning to the Government that any attempt to introduce a national levy - in order to assist those without flood cover - will result in higher premiums for all policyholders.

The representative body for the insurance industry last night warned that a new levy is "not the solution" and that the Government should instead focus on trying to "accelerate the construction of flood defences".

Michael Horan, the non-life insurance manager of Insurance Ireland, said industry officials are keen on "working constructively" with the Government but that years of under-investment in flood defences has led to the recent crisis.

"The most important element, and one of the things we have seen over the years in terms of the cause of flooding, is the inadequate investment in flood defences combined with building on flood plains. It is important we don't make those mistakes again," he told the Irish Independent.

Mr Horan added that the Government's should also include better maintenance of rivers and drains.

Representatives from industry have been called to a meeting with Taoiseach Enda Kenny and Environment Minister Alan Kelly in Government Buildings next week to discuss the ongoing response to the recent floods.

Last night, Taoiseach Enda Kenny last night said he expects the talks with the insurance industry to be "frank".

"We need to have a very frank discussion with the insurance companies who make very sizable profits from Ireland about what this situation is and how it can be addressed. I hope we can do that in a clear fashion or at least commence it on Tuesday, or at least explain what the nature of the problem is," he said.

"That's why we are having the meeting next week with the insurance companies to address the contradiction that I hear from insurance companies saying people are getting insurance and business proven to me that they are not," he added.

However, Mr Kenny is understood to be reluctant to push the idea of a levy, even though Alan Kelly has said it should not be ruled out.

Business groups and an Oireachtas committee have also raised the prospect of introducing a national insurance levy to allow all businesses, irrespective of their location, full access to flood insurance.

At present, two levies are in existence. One relates to the wind-up of the Insurance Corporation of Ireland in the eighties and the other stems from the demise of Quinn Insurance.

But in a clear warning ahead of Tuesday's meeting, Insurance Ireland said that any new levy would result in higher premiums for other policy holders.

"Ultimately levies are paid by policy holders," Mr Horan said, adding that insurance companies are commercial and cannot insure against "the inevitable".

Meanwhile, Mr Horan said it is still too early to estimate the full costs incurred by homes businesses as a result of Storms Desmond and Frank.

He said a flurry of claims are still being received and that it will likely take three weeks for insurance companies to "get a handle on the costs".

Irish Independent

Promoted Links

Today's news headlines, directly to your inbox every morning.

Promoted Links

Editor's Choice

Also in Irish News