Government policy in relation to flood insurance is focused on the development of a sustainable, planned, and risk-based approach to managing flooding. Flood prevention remains the best approach to reducing flood risk and increasing flood insurance capacity.
In terms of assessing flood risk, insurers use a variety of different flood data models (both internally developed models and flood models procured from third party vendors). Insurers will generally utilise (i) flood risk maps licenced from a third-party consultancy; (ii) bespoke flood maps based on individual historical claims experience/risk surveys undertaken of locations, and (iii) other information such as the flood defence benefit area data provided to Insurance Ireland by the OPW under the terms of the MOU, if applicable.
The decision on whether to offer insurance, level of premiums charged, and the policy terms applied are matters for individual insurers based on an actuarial assessment of the risks they are willing to accept. The Solvency II Directive restricts Member States in terms of intervening in insurers’ pricing or underwriting decisions.
The Government also recognises that the availability and affordability of flood insurance is an issue for many groups and communities and has therefore prioritised reform in this area under the Action Plan for Insurance Reform 2025 – 2029. However, there is no single solution. This is a multi-faceted policy area that cuts across the remit of a number of Departments and Agencies, that requires a coordinated response.
With respect to Action 17 of the action plan, following a meeting of Government on 21st of July 2026, it was agreed that a working group on the flood insurance protection gap should be established to progress a time bound work programme in relation to flooding and flood insurance. The Working Group will bring together Government Departments, agencies, insurers, and other key stakeholders to examine practical measures to reduce the flood insurance protection gap and improve access to insurance in areas at risk of flooding.
A range of policy options and potential solutions will be considered by the Working Group and any such solution needs to ensure that the market remains involved in the provision of cover while specifically addressing the nature of the insurance protection gap in Ireland, given the relatively high level of penetration and geographical concentration. It is also essential that any solution does not lead to a sharp increase in premiums, add significant costs to the Exchequer, lead to less risk reduction and risk awareness and fewer adaptation measures, or inadvertently widening the insurance protection gap over time.
My officials will also continue to monitor developments at EU and international level. The European Commission recently announced its intention to establish a Climate Insurance Alliance to address the growing climate protection gap at an EU level and will publish proposals on a European Climate Resilience and Risk Management Framework in Q4 this year.
