The Government has told insurance companies it wants them to change their stance on insuring homes and businesses protected by “demountable” or non-permanent flood defences or face the potential of alternative measures.

While yesterday’s meeting between Taoiseach Enda Kenny and the chief executives of major insurers at Government Buildings was described as “frank and very constructive”, Government sources said the industry’s approach to some flood insurance was “not credible”.

The key issue is demountable flood defences, said the sources, and the industry’s reluctance to treat them similarly to permanent defences.

Demountable defences are non-permanent structures installed when there is an imminent risk of flooding. The sources said they provided the only realistic engineering solution in some towns near flood- prone rivers.

Greater cost

It was also noted that in most cases, removable defences cost more than permanent defences such as walls.

However, they are treated differently by insurers. About 86 per cent cover is in place where there are fixed defences, but only 67 per cent where there are removable defences.

The Taoiseach met the chief executives of seven insurance companies – Aviva, Axa, AIG, FBD, Allianz, Zurich and RSA – and the head of the industry body Insurance Ireland. Also present were Minister for the Environment Alan Kelly, Minister for Agriculture Simon Coveney, and Minister of State for the Office of Public Works Simon Harris.

Ministers argued that elsewhere in Europe demountable defences are viewed as conforming to a similar standard as permanent defences.

The insurance companies were reassured by Government representatives that Government would ensure adequate protocols would be put in place, including regular drill exercises, to ensure demountable defences would always be in place in advance of any flooding incident. It was also pointed out such defences were only placed in towns with slow-moving rivers, allowing adequate warning time.

The Government has indicated it may introduce levies on insurance policies as part of its response to the crisis.

Pooling assets

The industry opposes any levy, while the Government is not thought to favour a levy but would be willing to explore an alternative such as “insurance pooling” if the industry refuses to budge.

Alone, the companies could not afford to take on high-risk accounts, but by pooling their assets, they could afford to extend such coverage.

Mr Kenny asked the companies to "reflect" on the level of cover provided in places where flood protection works had taken place.

Speaking afterwards, Mr Kenny said: “I’m glad to say today’s meeting was a constructive one, with all parties acknowledging the exceptional nature of recent events and the considerable distress for victims of flooding, and agreeing to work together to find the best ways to provide maximum insurance cover.”

Excessive premiums

Tánaiste Joan Burton said: “It is an extremely difficult situation for households in the affected areas to have to pay excessive premiums, or to be offered no cover at all. We want to see these issues addressed, particularly in areas where flood defences are being installed, but where cover is still not being provided.”

In a statement, Insurance Ireland said it was sensitive to the plight of those impacted by floods and was willing to review the situation regarding demountable defences.