Figures published today by the Irish Insurance Federation (IIF) reveal that the combined insured property cost of the November floods and the January freeze stand at €541 million. The January freeze, which was less visible to the public than the floods, will see insurers pay nearly €300m to customers whose homes were affected by burst pipes. To put the seriousness of this cost in some context, the insured cost of the two weather events has exceeded the total cost (€358 million) of all serious weather events that have occurred in the last decade  (listed below in notes to editors).  

Mike Kemp, IIF Chief Executive said: “The combined insurance cost of these two severe weather events, that happened in quick succession, is likely to be nearly 60 percent of annual turnover in the property insurance market.  In 2008 insurers saw a 29 percent increase in household claims and this upward trend continued in 2009, even before the flood and burst pipes claims hit.”

The November floods, the cost for which totalled €244m, had consequences mostly in Munster, the West and the Midlands. The three counties worst hit were Cork, Galway and Clare with property insurance claims between commercial and household property of over €141m, €23m and €16m respectively. (note: Cork figures impacted by significant commercial property claims). 

However, the freezing weather conditions from late December into the New Year affected the entire country.  Cork and Galway were again seriously affected by the freezing weather conditions and property insurance claims covering household and commercial property due to the freeze in Cork, Dublin and Galway currently stand at over €38m, €33m and €23m respectively.  While the damage caused by the November floods was very visible to all, in contrast, the damage caused by freeze primarily related to burst pipes in the home.

Mr Kemp continued:  “The insured cost of these two significant weather events is very stark, and while the cost has obvious implications for the Irish insurance sector, it is important to point out the resilience of our member companies in meeting the needs and requirements of over 30,000 customers during what has been a traumatic experience for so many people.  The insurance sector is a major contributor to the Irish economy in its own right (over 7% of GDP), and as a vital support to householders, motorists and large and small businesses throughout the country, insurers continue to deliver on their promises.  Our members have worked around the clock to get the country moving after the severest weather conditions in living memory.  While the costs have been huge, one consequence of the claims paid is the injection of over half a billion Euro directly back into the Irish economy, which will benefit many of the trades, especially in the construction sector, that have been hit hardest by the recession.”

Continuing he said: “Insurance is about protecting against risk and that is the essential vital role we will continue to play in Irish society.  However, with increasing frequency and severity of extreme weather conditions, questions inevitably arise as to the future cost and even insurability of some risks, particularly flood risk in some parts of the country.  Whilst we cannot prevent natural catastrophes and the impact of climate change may only be reversible in the very long term, if at all, there are measures that can be taken to minimise the damage caused by weather events in the future.  But there has to be a concerted, national approach, with clear ownership, to address issues such as improving planning and development rules to take greater account of flood risk, the priority attached to investment in flood defences, and even practical day-to-day measures such as effective and consistent management and maintenance of watercourses and drainage. 

With the knowledge and experience of the Irish insurance sector available to us, the IIF and its members are eager to play a meaningful and collaborative role with Government and public sector agencies in addressing these important issues.”