CORK BUSINESS ASSOCIATION

Transcription

1 Mr. Lawrence Owens - CEO CORK BUSINESS ASSOCIATION The Cork Business Association founded in 1957 is a not for profit organisation which represents the interests of over 150 businesses in Cork city. Our membership is a mix of local indigenous businesses plus Irish and multinational retailers. We have a wide sectoral base representing Retail, Hospitality, Financial, Property, Insurance, Catering & Service companies. A significant proportion of our members are located in the City centre and many of them located on the city centre island. (As seen below) It is well documented that Cork City is prone to flooding from tidal, fluvial, and pluvial sources. The OPW Cork City Flood relief Scheme (including Blackpool) will consist of: Flood defences along the River Lee downstream of Inniscarra

2 dam and through Cork city Changes to the operating procedures for the Carrigadrohid and Inniscarra reservoirs for the purposes of flood risk management, as may be facilitated by the above flood defences A flood forecasting system to help guide decision-making on dam discharges and, if necessary, the erection of temporary / demountable defences downstream and in Cork City. Flood defence measures in the Blackpool and Ballyvolane areas. This Scheme was identified as a viable flood risk management option with respect to flooding from both riverine (fluvial) and tidal sources in the Lee Catchment Flood Risk Management Plan. Current estimates for this work are in the region of 50m to 60m. This is a significant investment of taxpayer s money to resolve this problem. However we can take confidence from the effectiveness of the recent flood defence works carried out in Fermoy, Clonmel, and Waterford. It is still unclear as to when these works will commence in Cork City but certainly not before 2016 and possibly As to completion dates we are looking at 2020 and beyond. Consequently the ongoing difficulties business & property owners in Cork City face in respect of the lack of flood insurance looks set to continue. However the expectation amongst business owners was once the OPW flood relief scheme was completed then realistic flood insurance cover would follow. The commentary from the representative body for insurance companies (Insurance Ireland) is somewhat different. In their opinion and based on the plans they had seen for the Cork flood relief scheme, the proposed works would not reduce the risk of flooding sufficiently to allow them provide flood cover to business and households in Cork City. What will the investment in Corks flood defences achieve in terms of

3 insurance cover? What will the investment nationally deliver in terms of flood insurance cover? It appears the March 2014 announcement of a memorandum of understanding on the exchange of flood defence data between the OPW and Insurance Ireland is the best we can aspire to. Government has to ensure that the considerable amount of state investment delivers more than an understanding What does the future hold for our members who cannot get flood insurance now? What does the next six years hold for our members while the flood defence works are underway? During which the possibility being flooded again is very real and which will put several more out of business. How do we encourage businesses that are affected by no insurance cover to invest in the upgrading of their premises? How do we encourage inward investment both domestic and foreign into Cork City if we cannot guarantee that investment is protected? It is imperative that homes and businesses in Cork City and nationally can access flood insurance cove at a reasonable cost as soon as possible. The existing status quo is unsustainable with many businesses and home owners still exposed to massive risk. Lawrence Owens Chief Executive Cork Business Association Waterfront Business Centre 5 Lapps Quay Cork

4 Niall Garvey - CEO, Muintir na Tíre. Saving Rural Ireland is something that needs to be written into national policy, Muintir na Tíre CEO Niall Garvey stressed at a launch in Buswell s Hotel in Dublin yesterday afternoon which saw six national bodies join forces. Muintir na Tíre, the Irish Cattle and Sheep Farmers Association, the Irish Countrywomen s Association, the Irish Postmasters Union, Macra na Feirme, and the Irish National Flood Forum have come together to try and halt what is seen by many as the gradual decline of rural Ireland, and the message was clear from all bodies that the government has to act soon to ensure the survival of rural Ireland. We need a national policy for rural Ireland; there isn t an overall policy at present said Niall Garvey. The association s President, Paddy Byrne, urged everyone present to use every available form of networking to try and help the cause of those most affected in rural Ireland. The issues that need to be tackled are wide and varied but the organisations have identified the following initial issues: rural broadband, post office viability, control of scrap metal, insurance in flood areas and GP cover. In their policy document they have identified practical solutions to each of these issues. The department of finance can t be allowing cherry-picking when it comes to insuring homes against floods, voiced Jer Buckley, Irish National Flood Forum PRO. Insurance companies are refusing to provide flood insurance in many towns. This situation needs to be tackled, he added. Liz Wall, President of the ICA said that of the association s 10,000 members, there was a strong feeling that rural Ireland was being totally destroyed. When the post office goes, then so does the shop. And now the number of buses are being reduced. There have been over 1,100 post office closures nationwide, but only 22 of those closures have occurred since However, Ned O Hara, General Secretary of the Irish Postmasters Union, feels there was no concrete decisions taken at government level to safeguard the future of rural post offices. Every TD and politician

5 will tell us that they love the post office and that they love rural Ireland but few seem capable of ensuring there aren t further closures, Ned O Hara noted. The slow speeds, or complete lack, of broadband in many rural areas is something that needs to be addressed, and ICSA President Patrick Kent felt that the long-term plan is too far away for many people. The broadband is not up to stand in many places and this is simply not good enough. It needs to be brought up to speed. Regulating the scrap metal industry and ensuring that the cuts in the GP Rural Practice Allowance are reversed were other areas that Muintir na Tire s CEO Niall Garvey said also require action from government level. A number of rural based TDs and senators voiced their support for the initiative at the launch and in the coming weeks the associations involved will be pressing ministers to implement these cost-effective and practical solutions and to develop a national policy for rural Ireland. For further information contact: Niall Garvey, Muintir na Tíre, ngarvey@muintir.ie,

6 Mr. Eamon Downey - President of the Irish Claims Consultants ICCA AT PRESS CONFERENCE 25 MARCH 2015 BUSWELLS HOTEL 500M SPENT AND STILL NO FLOOD INSURANCE! CLAIMS CONSULTANTS /PUBLIC LOSS ASSESSORS SPECIALISE IN REPRESENTING POLICYHOLDERS, BOTH HOMEOWNERS AND BUSINESS OWNERS, IN THEIR DEALINGS WITH AN INSURANCE COMPANY AT THE TIME OF A CLAIM. FROM MAJOR INCIDENTS, SUCH AS CLEARYS CLOSURE DUE TO STORM DAMAGE, TO A SMALL WATER DAMAGE CLAIM IN A HOME, PEOPLE NEED OUR SERVICES. MANY OF OUR MEMBERS PREVIOUSLY WORKED AS LOSS ADJUSTERS REPRESENTING THE INSURANCE COMPANIES, BUT SIGNIFICANT CHANGES IN THE INSURANCE COMPANIES APPROACH TO CLAIMS AND INDEED TO THEIR RELATIONSHIP WITH LOSS ADJUSTERS, AND OTHER FACTORS LED TO A GROWTH IN DEMAND FOR PUBLIC LOSS ASSESSORS. TODAY, YOUR INSURANCE COMPANY WILL STRIVE TO MINIMISE WHAT THEY PAY OUT THROUGH MEANS NEVER ENVISAGED PREVIOUSLY AND SOME OF THE CHANGES THAT EFECT THE INSURING PUBLIC INCLUDE:. THE FACT THAT INSURANCE COMPANIES RATE AND COMPARE THEIR LOSS ADJUSTERS RESULTS ON PARTICULAR TYPES OF CLAIMS; THIS LEADS TO PRESSURE TO ACHIEVE LOWER AVERAGE PAY OUT COSTS, HOWEVER THAT IS ACHIEVED, TO ENSURE THAT THE LOSS ADJUSTER CONTINUES TO RECEIVE BUSINESS FROM THE INSURER;. THEY AUDIT THEIR LOSS ADJUSTERS AND CHARGE THEM FOR WHAT INSURANCE COMPANIES CONSIDER TO BE LEAKAGE ; WE HAVE EVIDENCE OF RIDIULOUS EXAMPLES OF THIS AND THE EFFECT IS AN ABSOLUTE FEAR AMONGST LOSS ADJUSTERS TO MAKE DECISIONS IN THE MANNER THEY WOULD HAVE DONE HERETOFORE AND A REFUSAL TO SETTLE EVEN THE MOST

7 STRAIGHFORWARD OF CLAIMS IN A TIMELY MANNER;.THEY RETAIN 30% OF THE AGREED LOSS UNTIL YOU HAVE INCURRED ALL COSTS AND VOUCHED SAME; THE PERSON WHO HAS SUFFERRED THE LOSS MUST FUND THE 30% AND THERE IS NO REQUIREMENT TO PAY THIS IN A TIMELY MANNER, DESPITE US POINTING OUT THE FLAW TO THE CENTRAL BANK;.THEY INSTRUCT BUILDERS, WHO ARE NEITHER QUALIFIED OR TRAINED IN INSURANCE WORDINGS TO CONFIRM LIABILITY AND DECIDE ON THE SCOPE OF REPAIR WORK NECESSARY, WITHOUT THE AGREEMENT OF THE POLICYHOLDER TO THE WORKS PROPOSED;. THEY UTILISE THE LOWEST AND OFTEN UNREALISTIC RATES FOR BUILDING REPAIRS WHILST, AT THE SAME TIME, USE THE HIGHEST RATES THEY CAN WHEN EVALUATING THE ADEQUACY OF SUMS INSURED; IN OTHER WORDS, THEY WANT YOU TO INSURE AT ONE PRICE LEVEL AND ACCEPT REPAIRS AT A LOWER PRICE LEVEL;.THEY OPERATE IN A CULTURE WHERE THEY DO NOT ENCOURAGE EMPATHY IN ANY FORM WITH THE PERSON WHOS HOME OR BUSINESS HAS BEEN DESTROYED; THE LENGTH OF TIME YOU ARE A CUSTOMER, ILL HEALTH, EXTENUATING CIRCUMSTANCES, AN OMMISSION OF A SMALL, FORGOTTEN AND IRRELEVANT CLAIM, WHATEVER. IF THEY CAN AVOID OR REDUCE THEIR PAY OUT THEY WILL DO SO. ALL OF THESE FACTORS CAN IMPACT ON FLOOD CLAIMS ALSO. THE CENTRAL BANK HAVE AN ENORMOUS TASK IN THEIR REGULATION OF A SIGNIFICANT FINANCIAL SERVICES INDUSTRY AND WORK IN A MANNER THAT IS NOT INCLUSIVE AND APPEAR TO NOT WANT ASSISTANCE FROM PEOPLE WORKING AT THE COAL FACE. WE HAVE SYMPATHY WITH AN UNDERWRITER ASKED TO GIVE FLOOD COVER IN A HIGH RISK AREA. INSURANCE MAY NOT BE A SOLUTION FOR INEVITABLE OR ALMOST CERTAIN LOSS. GOVERNMENT MAY INTERVENE TO SET UP A RISK TRANSFER MECHANISM FOR OUR CITIZENS OR MAY LEGISLATE FOR THE INSURANCE INDUSTRY TO BECOME INVOLVED IN A SOLUTION. WHERE IT APPEARS THAT AN INDUSTRY SECTOR, IN THIS INSTANCE THE INSURANCE SECTOR, CHOOSES TO IGNORE THE GOVERNMENTS ATTEMPTS TO EFFECT CHANGE THROUGH THE

8 OFFICE OF PUBLIC WORKS, WE CONSIDER THAT A SOLUTION THAT INVOLVES THE INSURANCE SECTOR,WITHOUT PASSING ON THE COST TO THE CONSUMER, MUST BE INVESTIGATED. THE IRISH CLAIMS CONSULTANTS ASSOCIATION WOULD GLADLY PARTAKE IN TRYING TO FIND A SOLUTION.WHAT IS EVIDENT IS THE FACT THAT HOMEOWNERS AND BUSINESS OWNERS IN CERTAIN FLOOD ZONES FEEL ABANDONED BY THE INSURANCE INDUSTRY. EAMONN R DOWNEY CIP PRESIDENT IRISH CLAIMS CONSULTANTS ASSOCIATION

9 Cathal O Donavan Flood Forum Skibbereen (Founder member of The Irish National Flood Forum) The 2009 flood,hit many parts of Ireland and caused severe damage nationally to private residences and businesses. We in Skibbereen suffered in the same way as many other flooded communities throughout the country. In the aftermath of this flood we felt adrift and realised that every other flooded community in the country was, at the same time experiencing the same sense of isolation, helplessness and fear. Members of our local Floods committee began to question the then current situation nationally. With over 400 flooded communities spread across the country, we felt that there was a great need for cohesion, for communities to be better organised, to become more pro-active,to engage in more joined- up thinking, the need for information and knowledge, a need to empower people to better help themselves. With this in mind we incorporated and organised the first one-day Irish National Flood Forum in Skibbereen on Sat Nov. 20th 2010.The programme included an impressive range of speakers with the key-note address being given by Dr.Martin Mansergh T.D Minister with responsibility for the O.P.W. This was followed in 2011 with a second Forum at the University of Limerick with the keynote address being given by Brian Hayes T.D Minister with responsibility for the O.P.W. The Irish National Flood Forum is a voluntary community based organisation with no funding to date. The aim and purpose of the Irish National Flood Forum is to highlight the plight of flooded communities in Ireland, to form a nationwide community based organisation that will work on behalf of flooded communities and assist in dealing with the causes, effects and consequences of flooding and equally to liase with the various governmental, intergovernmental and European agencies

10 to effect solutions through flood relief measures. There are many problems which have to be considered in time of flood.if you were to ask any flooded community in the country, after the flood damage is done, what is their next greatest fear?the resounding chorus would be insurance!-the fear of facing into the insurance broker and the reality of being cut off from future coverflood damage to the tune of be it 5000, 50,000 or 5000,000 -how do you cope with that without flood cover? It is that, and other insurance problems, which currently greatly concerns the Irish National Flood Forum and which has brought us here to-day. Brian Mc Neils Director General Services : IBA

11 Press Release Summary The Irish Brokers Association are the primary broker/intermediary representative body in Ireland whose members include large multinational brokers, large indigenous brokers and small and medium size brokerages throughout the length and breadth of the country. We are also members of the European Federation of Insurance Intermediaries BIPAR. Our members facilitate the transaction of insurance and financial services for the majority of Irish Citizens. Irish Broker Association view on Flood Inaction Whilst we accept we cannot entirely eliminate the risk of flooding, greater efforts must be made to ensure that the public and their property is protected and that insurance cover to some degree can be made available to all. Key Issues The completion of the CFRAM plan by the OPW by December 2015 Greater coordination, under the direction of the OPW, between all parties -the OPW, Insurance Industry, Councils, Relevant Parties e.g. Fisheries Boards and the local communities. Agreement between the insurance industry & the OPW on standards of work, repair and maintenance in the implementation of the CFRAM plans so that where remedial work is carried out it is done to a standard acceptable to the industry to allow a level of insurance risk cover for the public and businesses. The involvement of the local communities through flood awareness committees and education is essential to a solution. This is where we feel the insurance industry could have a significant role for e.g. local education programmes. The initiative by DEFRA in the UK is worth reviewing. As most of the Insurers operating in the Irish market have parent companies as members of the Association of British Insurers, we would encourage that greater liaison takes place to replicate solutions agreed in the UK.

12 Irish Brokers Association on Flood Insurance inaction Key issues for Irish Brokers Association Members A rough estimate of the number of buildings where flood cover is excluded is about #. There are key areas of exclusion; Cork city, Dublin Basin, Clonakilty, Bandon, Fermoy, Clonmel, Waterford, Carlow and the Shannon river area. Our members face issues with their customers when: Either they are already in one of the above locations If they live in any new area of flooding (or spot flooding) Geo-coding by insurers has created many problems for policy holders particularly when their property is in a location within the geo-coded land where the chances of flooding are extremely remote. Brokers have been successful in procuring cover for members through expert advice and surveys in these areas but significant challenges remain. It is impossible to get flood cover in any area which has had recurrent flood problems. The best members have been able to achieve is policy cover excluding flood. NB - Similar issues exist for subsidence cover, particularly in the Cork area. Members are now also facing significant issues from customers who have left brokers to join schemes... e.g. AIB, Bank of Ireland or who have gone direct. Whether inadvertently or deliberately these customers who may have had previous claims are (following recent flood damage): 1 Being asked to go back to their broker to research previous claims history 2 Requesting brokers to assist them in dealing with policies being cancelled from inception because of this misinformation These customers will find it extremely difficult to get any cover as a result! # (IIF Stats 2% of policies exclude flood cover. Circa 2m homes and 350k commercial premises. 2% of premises = ) Attitude of Insurers The current attitude of Insurers in any area where flooding (whether river, tidal or spot flooding) has occurred is that insurance

13 cover will not be supplied. Insurance Ireland say 2% of policies have flood excluded (circa 40-50,000 homes/business premises). Insurers are as we know commercial entities and they have a responsibility to two key parties for their performance in business: 1 Shareholders who expect a profit thus will not accept results based on accepting risks which will lose them money 2 Existing policyholders in other words the other 98% of policyholder who do not live in a flood zone. The insurer must protect their interests in ensuring that they do not accept any risk where a claim is certain to occur. Insurers have in recent years used geo-coding to protect their interests in flood areas. This exercise maps any known or possible flood regions in the country. Unfortunately geo-coding is not entirely accurate and can include areas or premises where flooding may never occur. Over the past 12 years there have been 8 serious flooding incidents costing insurers c.700million euro. EU Directive The effect of the EU Directive is to bring a European plan together by effectively forcing each country to draw up a plan to protect the public against flood within timeframes. EU Floods Directive came into being in November 2007 Transported into law in Republic of Ireland (Martin Mansaragh) - 19 th October 2010 OPW appointed to coordinate plans. CFRAM (Catchment Flood Risk Assessment & Management) set up: To identify and map existing and potential future flood hazard and risk areas Identify viable structural & non-structural options for managing flood risks Prepare CFRAM plans for the area that sets out prioritised measures & policies for stakeholders to achieve in the most cost effective way. Public consultation to finalise by December The overall CFRAM plan to be finalised by December Implementation of plans to be concluded by December Government Action

14 In addition to the EU Directive Activity, many local councils are continuing with interim and in some cases (Clonmel) long term remedial solutions. The perception from members on the ground in the areas affected, whilst acknowledging the efforts being made, is that action is simply not happening quickly enough and it would seem not in a concerted manner. There have been various reports of conflicts of interest between councils and other parties e.g. Inland Fisheries Board, and certainly a lack of funding to complete necessary works. Where work has been done e.g. Douglas & Blackpool in Cork, a significant issue has been the lack of maintenance of culverts & waterways to a sufficiently high standard. The mapping of areas by the CFRAM initiative, which may be affected by future climatic changes, e.g. Clifton in Galway, is causing some concern. These areas are still not geo-coded by Insurers but obviously may have to be, resulting in stricter underwriting of risks in these areas. The area of education of local communities by government does not seem to be as coordinated as that outlined by DEFRA (Department for Environment, Food & Rural Areas) in the UK. The lack of co-ordination of local groups and the general education of local communities has been highlighted as an issue by members. The Solution IBA Member View Whilst we accept we cannot entirely eliminate the risk of flooding, greater efforts must be made to ensure that the public and their property is protected and that insurance cover to some degree can be made available to all. Key Issues The completion of the CFRAM plan by the OPW by December 2015 Greater coordination, under the direction of the OPW, between all parties -the OPW, Insurance Industry, Councils, Relevant Parties e.g. Fisheries Boards and the local communities. Better use by the OPW and the Insurance Industry of the experience gained by countries who have significantly greater issues than we have e.g. Holland & the UK.

15 Better use of and better communication between the OPW and the Insurance Industry of specialised information accumulated by parent insurance companies of those Insurers operating in Ireland ( e.g. Aviva, Allianz, RSA, Axa, Zurich) of claims information on flooding issues in Ireland and in Europe. Agreement between the insurance industry & the OPW on standards of work, repair and maintenance in the implementation of the CFRAM plans so that where remedial work is carried out it is done to a standard acceptable to the industry to allow a level of insurance risk cover for the public and businesses. The involvement of the local communities through flood awareness committees and education is essential to a solution. This is where we feel the insurance industry could have a significant role for e.g. local education programmes. The initiative by DEFRA in the UK is worth reviewing. The Association is prepared to actively encourage and use our broker network around Ireland to assist in advising local community groups on risk and product matters in relation to Flood and Subsidence cover. As most of the Insurers operating in the Irish market have parent companies as members of the Association of British Insurers, we would encourage that greater liason takes place to replicate solutions agreed in the UK. BMCN Jer Buckley : P.R.O. - Irish National Flood Forum.

16 Insurance in Flood Areas Recent years have seen many communities drastically affected by coastal and river flooding. As well as the trauma of the initial damage, this has ongoing effects on householders and business people as they become unable to obtain affordable, or even any, insurance cover. The Office of Public Works has carried out extensive flood relief works in many affected areas, spending over 500 million to date with over 200 million committed to. Despite this huge investment of taxpayers money to rectify problems, people are still being refused insurance cover in those areas. For example people in Mallow and Fermoy are still being refused cover, despite completed flood relief works costing 57 million in those areas. This policy of adverse selection is allowed under the current Memorandum of Understanding with the Insurance industry and does not reflect the reduced risk resulting from the huge state investment. The OPW is currently nearing completion of the CFRAM (Catchment Flood Risk Assessment and Management) mapping project. The reason for this mapping is three fold: To comply with EU directives; to help plan for and alleviate flooding in communities; and to highlight areas which should not be built on or developed. 300 communities have been identified as threatened by flooding under this programme. As this data is available to insurance companies, we are concerned it will be used to discriminate against homes and businesses in these communities, denying them access to affordable, or perhaps any, insurance. Other countries employ various risk equalisation policies to ensure buildings insurance is available to all. This can be achieved for example through a community rating scheme (as used for health insurance) or a central fund (as used for uninsured drivers). We request the Minister firstly to replace the current Memorandum of Understanding with the Insurance industry to reflect the huge state investment and subsequent lowering of risk. This will help to ensure people can continue to live in their homes and businesses can continue to operate. Otherwise communities

17 with a history, or even a slight future risk, of flooding face extinction. This has obvious implications for homelessness, economic decline, and infrastructure planning. Summary Solutions: Replace the current Memorandum of Understanding with an agreement which ensures that once flood prevention schemes have been completed by the OPW to the international standard of 1:100 year event ALL property owners in these areas can avail of competitive insurance.